Part 11) It is unlikely that British chocolate will be prohibited within the EU after Brexit because British companies do not violate major EU quality standards. The only controversial issue which caused chocolate war was largely about labeling. The European Commission and the majority of Euro-MPs believe that trade restrictions because of improper labeling were caused by competition rather than quality concerns (BBC News, 1997, n/p). The European Court found it groundless to ban imports of chocolate containing vegetable fat and imposed labeling standards for products that are different from the traditional chocolate (CNN World, 2003, n/p). When adhering to these standards, Britain has the right to join free trade within the EU.

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2) There will be no tariffs for the UK chocolate producers if Britain becomes a part of the European Economic Area (free trade zone). If Britain does not enter the free trade zone, trade duties will be imposed on both imports and exports. Britain will also have no access to the coordinated VAT collection of the EU. Thus, 20% VAT will be required to pay at the border (Dhingra, 2016, n/p).

3) In any case, there is no option to avoid customs formalities, so major hindrances would include customs-related costs and delays in delivery. Besides, in a complex system of EU trade restrictions, the origin of raw materials also matters. Another negative consequence of Brexit is sterling depreciation: as it was predicted, sterling fell to 30-year lows (Oxford Review of Economic Affairs, p. 1). Nevertheless, it could as well increase competitiveness of British exporters provided that customs-related costs will be less than currency-related benefit.

4) Recent EU regulations for vacuum cleaners manufacturers have already reduced the amount of sales of British manufacturers. Most vacuum cleaners of the lowest price range are now prohibited within the EU. After Brexit, however, British manufacturers will be able to sell prohibited items on the domestic market. The future trade negotiations between EU and UK will include energy efficiency considerations and other regulatory aspects (Smithers, 2017, n/p). All imported products will still be required to pass the tests and receive a proper quality rating. According to the new regulations, the life expectancy of the vacuum cleaners will be reduced, which means more items will be bought and sold in a shorter period of time Gallego-Schmid, Mendoza, Jeswani, Azapagic, 2016, p. 197).

5) European countries and the United States are major trading partners for Britain. Therefore, when access to the EU market is limited for UK chocolate producers, US market will be the major alternative. Because of different pricing and production strategies, US producers are likely to win competition with European rivals because 1) their production capacities are allocated in different parts of the world in order to achieve minimum production costs while UK companies have all capacities allocated in their home countries, and 2) US prices for chocolate are lower (Ramli, 2017, n/p). Therefore, UK chocolate industry is expected to suffer significant losses.

Part 2
1) It was interesting to learn how such minor issues as 5% of vegetable fat in a chocolate product could influence the future of the whole industry. Every party involved in this conflict (which lasted for almost 40 years!) was aware of its absurdity, and yet it was settled shortly before Brexit.

2) When imposing too strict quality regulations, the EU government should always consider how these could be used by some country to promote its own interests. Just like in this case, some countries may use these regulations to protect their own markets and improve competitiveness of their producers.

3) The EU system of free trade is based on mutual interests. It eliminates the possibility of unilaterally unjustified regulations.

    References
  • “Britain Wins EU Chocolate Battle.” CNN World (January 16, 2003). http://edition.cnn.com/2003/WORLD/europe/01/16/chocolate.war (accessed October 12, 2017).
  • Dhingra, Swati. “EU Referendum: How would Brexit Change VAT and Import Duties?” The Guardian (March 22, 2016). https://www.theguardian.com/small-business-network/2016/mar/22/eu-referendum-brexit-change-vat-import-duties#img-1 (accessed October 12, 2017).
  • Doyle, Mark. “Africa Cocoa Slavery ‘Exaggerated.” BBC News (August 20, 2002). http://news.bbc.co.uk/2/hi/africa/2205741.stm (accessed October 12, 2017).
  • Gallego-Schmid, A., Mendoza, J.M., Jeswani, H.K., and Azapagic, A. “Life Cycle Environmental Impacts of Vacuum Cleaners and the Effects of European Regulation.” Science of the Total Environment 559, no. 15 (July 2016): 192-203.
  • Hur, T., Lee, J., Ryu, J., and Kwon, E. “Simplified LCA and Matrix Methods in Identifying the Environmental Aspects of a Product System.” Journal of Environmental Management 75, no. 3 (May 2005): 229-237.
  • Ramli, Knur Sohaila. “A Review of Marketing Strategies of the European Chocolate Industry.” Journal of Global Entrepreneurship (May 12, 2017). https://doi.org/10.1186/s40497-017-0068-0 (accessed October 12, 2017).
  • Roberts, Rachel. “Brexit: UK won’t Leave the EU and will one Day join the Euro, Says Lord Heseltine.” Independent (September 22, 2017). https://www.independent.co.uk (accessed October 12, 2017).
  • Smithers, Rebecca. “Noisy Vacuum Cleaners will Bite the Dust under New UE Rules.” The Guardian (August 12, 2017). https://www.theguardian.com/money/2017/aug/12/noisy-vacuum-cleaners-eu-rules-brexit (accessed October 12, 2017).
  • “The Economics of Brexit: What is at Stake?” Oxford Review of Economic Affairs, 33, no. 1 (March 2017): 1-3.
  • “UK Loses Battle in Chocolate War.” BBC News (October 24, 1997). http://news.bbc.co.uk/2/hi/uk_news/14930.stm (accessed October 12, 2017).