On 25th January, the UK Institute of Export and International Trade published a short briefing that explains 9 key things you need to know about how WTO rules work and their potential impact on the UK’s trading position.
WHAT WOULD ‘TRADING ON WTO TERMS’ MEAN?
The Institute has also produced this short briefing paper. It concludes by saying that WTO terms provide a basic floor for world trade. Most obviously, there are the schedules describing the market access all members receive in terms of the tariffs they pay on goods, the conditions under which they can provide services in other territories, along with measures to limit barriers at borders. Taken together, these provide a basic level of predictability and non-discrimination. Members cannot discriminate against others by charging them higher tariffs or putting in place specific measures, for example discriminating against UK foodstuffs, without specific grounds to justify this behaviour. However, it says, the inadequacies of these arrangements provide incentives for countries to go further and seek preferential access to tackle issues inadequately covered through WTO rules. The UK will, as other members do, want to seek the closest relationship possible with the EU given political constraints. The WTO option alone would have a significantly disruptive impact on trade between the UK and the EU, and even on some UK trade with other parts of the world. Falling back on WTO terms would be, to say the least, suboptimal politically, economically and socially.