- set its own import tariffs
- win the right to offer any trade-distorting subsidies
- work out with the EU the British share of any duty-free import quotas to which the 28-nation bloc is committed
Theresa May Faces WTO Trade Tangle as Brexit Lift-Off Nears: Q&A
By: Jonathan Stearns | Jan 25 2017 at 07:00 PM | International Trade
As U.K. Prime Minister Theresa May prepares to trigger negotiations on leaving the European Union in 2019, she’s also laying the groundwork for British talks with non-EU countries including the U.S. and China on post-Brexit trade pacts. All this will take place in the framework of the World Trade Organization, where what the U.K. plans to do is unprecedented, and in the wake of a protectionist tilt under President Donald Trump.
Here’s a guide to the central political and policy questions.
1. Does post-Brexit Britain need to reapply for WTO membership?
No. The U.K. is a member of the WTO independent of European Union membership. As a result, after leaving the EU, Britain won’t join the likes of Belarus, North Korea and Turkmenistan outside the WTO.
2. Will some new trade arrangements be easier for Britain?
Yes, in theory. After Brexit, the U.K. may be able to establish new trade arrangements relatively quickly with more than 60 countries and territories such as South Korea that have special commercial agreements with the EU.
That’s because the market-access accords between the EU and these partners go beyond what the WTO requires, enabling the U.K. simply to copy and paste the deals and notify the Geneva-based global trade arbiter.
This scenario assumes a country such as South Korea that has a special trade accord with the EU wouldn’t seek to re-open the pact as a result of Brexit. Canada is due to join this group of nations imminently.
3. What about new U.K. trade tries with other non-EU countries?
It’ll probably be trickier for Britain to work out new commercial relationships with countries such as the U.S., China, Japan, New Zealand and Brazil that have no free-trade accords with the EU. In these cases, some of the commitments that the EU has made to those nations under WTO rules may need to be renegotiated with the U.K., which would then have to win approval for those changes in Geneva.
“First, there’s a pitfall in all this within the EU during the Brexit negotiations,” said Jacques Bourgeois, a senior adviser at law firm Sidley Austin LLP in Brussels. “Then, in Geneva, there are bound to be cases in which WTO partners will unearth old grievances. That’s unavoidable.”
Generally, post-Brexit Britain will have to produce “schedules of commitments” regarding domestic-market access in the areas of goods and services for WTO partners that have no trade deals with the EU.
4. Is agriculture affected?
Yes. And farm policy is always politically thorny in Geneva. In coming up with commitments on agriculture for the WTO, the U.K. will have to: