WTO Warns U.K. About Global Impact of No-Deal Brexit
(Bloomberg) -- The head of the World Trade Organization said the U.K. risks trade disruption in the event of a no-deal Brexit because it is “very unlikely” to have agreed tariffs and quotas with the other WTO members in time.
“The moment that other countries begin to sense an opportunity to increase their market share or increase a quota here or there, they are going to go for that,” WTO Director General Roberto Azevedo told BBC Radio 4 on Friday. “It is very unlikely that you’re going to have a 100 percent agreed outcome for all WTO members between now and March.”
Azevedo’s comments are a potential blow to the British government, which is proposing to replicate the U.K.’s current WTO trade terms after it leaves the European Union. But the U.S. and six other countries are opposed to that approach, and have said they expect Britain and the EU to make sure countries entitled to access rights are left no worse off than they currently are.
In some sensitive areas such as agriculture, both Britain and the EU have proposed to split their joint trade quotas based on historical averages.
If any WTO member registers their formal objection, Britain must negotiate an acceptable agreement or be forced to trade on uncertified tariffs and quota levels. That would affect not only current trade, but the government’s ability to quickly negotiate new trade deals after Brexit -- a key rallying cry among Brexiters pushing for maximum distance from the EU.
British officials have been talking up the likelihood of a no-deal Brexit in recent weeks, with International Trade Secretary Liam Fox putting the chances as high as 60 percent. The government on Thursday published its first guidance for businesses on how to cope with that outcome, warning of everything from higher prices to more red tape and the need to stockpile drugs.
That scenario is “not going to be the end of the world, in the sense that trade is going to stop and that everything is going to fall down -- no,” Azevedo said. “But it’s not going to be a walk in the park, either.”
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