No Deal Brexit – what does the WTO rules option mean and how would it work?

08.07.2019 22:00

TheSun.co.uk

IF the UK leaves the European Union without a deal, it will fall back into the World Trade Organisation (WTO) rules.

But what does this mean and how would it work? Here’s the latest.

The UK will fall under WTO rules if they cannot reach a deal with the EU

Reuters

What are the WTO rules?

The WTO is where countries negotiate the rules of international trade.

There are 164 members.

If they do not make any free trade agreements they will trade under WTO rules.

Every member of the WTO has a list of tariffs and quotas that they apply to other countries – which is known as WTO schedules.

The average EU tariff is about 2.8 per cent for non-agricultural products, but in other sectors tariffs can be much higher.

After Brexit cars would be taxed 10 per cent when they cross the UK-EU border and agricultural tariffs would increase under the WTO rules.

Under the WTOs “most favoured nation” rules, the UK can’t just lower tariffs for the EU, or any specific country unless a trade deal was agreed.

Liam Fox listens to speeches delivered at the World Trade Organisation WTO Public Forum in 2016

EPA

What are non-tariff barriers?

The non-tariff barriers include things such as product standards, sanitary checks and safety regulations.

After the UK leaves the EU, there needs to be a system to recognise each other’s non-tariff barriers.

Does the UK already trade with other countries on WTO rules?

The UK does trade with other countries as part of the EU.

In the event of a No Deal Brexit the UK would have to forge trade deals that the EU already has with other countries – which is being done now.

The UK has not signed any free trade deals yet but a deal with Switzerland is close and a more limited deal with Australia and New Zealand has been agreed.

What happens in a No Deal Brexit?

The UK will have to agree to a new list of tariffs and quotas once it is no longer part of the EU.

Many who support leaving without a deal reference the Trade Facilitation Agreement (TFA), which obliges to treat the UK fairly.

However, the TFA is aimed and less developed countries and even though it cannot discriminate against the UK, it cannot expect to be treated the same.