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WTO is NOT an option

(19 Posts)
jura2 Tue 28-May-19 20:50:59

The UK will be unable to have frictionless, tariff-free trade under World Trade Organization rules for up to seven years in the event of a no-deal Brexit, according to two leading European Union law specialists.

The ensuing chaos could double food prices and plunge Britain into a recession that could last up to 30 years, claim the lawyers who acted for Gina Miller in the historic case that forced the government to seek parliament’s approval to leave the EU.

It has been claimed that the UK could simply move to WTO terms if there is no deal with the EU. But Anneli Howard, a specialist in EU and competition law at Monckton Chambers and a member of the bar’s Brexit working group, believes this isn’t true.
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“No deal means leaving with nothing,” she said. “The anticipated recession will be worse than the 1930s, let alone 2008. It is impossible to say how long it would go on for. Some economists say 10 years, others say the effects could be felt for 20 or even 30 years: even ardent Brexiters agree it could be decades.”

The government’s own statistics have estimated that under the worst case no-deal scenario, GDP would be 10.7% lower than if the UK stays in the EU, in 15 years.

GabriellaG54 Tue 28-May-19 21:04:51

Haha. He said she said...

Joelsnan Tue 28-May-19 21:05:14

Ate our markets entirely EU based?
I understand that we currently have a reasonably high level of trade within the EU, but is this purely because of our membership to the same.
How much of our current trade could not be sourced from elsewhere in the world?...I imagine most could be sourced from outside EU, potentially at fairer rates.
Of course the EU will threaten, its brinkmanship. They recognise that few of their goods and services are unique and UK is a valuable customer. If UK takes its trade elsewhere and achieves better prices and services then this will impact badly on the union.

petra Tue 28-May-19 21:15:33

I prefer to listen to the head of the WTO who stated:
the UKs transition out of the eu will be fast and smooth and there will be no disruption to trade

Mycatisahacker Tue 28-May-19 21:18:03

I think anything is better for business than uncertainty.

This present state of affairs is far worse for the economy than WTO would be.

Clarity on our position finally and then start making trade deals.

David0205 Tue 28-May-19 21:39:59

If there is “no deal” there has to be a deal on everything.

I know that’s a difficult concept, without a customs union each commodity has to be renegotiated, but there will have to be transition agreements for some commodities, particularly perishable products.

With “no deal” the customs tariffs on one commodity will affect another, so a trade off will be made and not until the whole package is agreed will the deal be done. All that is not just with the EU but with every other country

WTO rules will apply to some commodities which may be better or worse than any later deal

Anyone who thinks that is going to be quick and easy is deluded, nobody has the faintest idea what the outcome will be.

jura2 Tue 28-May-19 21:44:52

WTO is NOT about trade with the EU, but the whole world.

jura2 Tue 28-May-19 21:48:00

'There are two apparently insurmountable hurdles to the UK trading on current WTO tariffs in the event of Britain crashing out in March, said Howard.

Firstly, the UK must produce its own schedule covering both services and each of the 5,000-plus product lines covered in the WTO agreement and get it agreed by all the 163 WTO states in the 32 remaining parliamentary sitting days until 29 March 2019. A number of states have already raised objections to the UK’s draft schedule: 20 over goods and three over services.

To make it more complicated, there are no “default terms” Britain can crash out on, Howard said, while at the same time, the UK has been blocked by WTO members from simply relying on the EU’s “schedule” – its existing tariffs and tariff-free trade quotas.

The second hurdle is the sheer volume of domestic legislation that would need to be passed before being able to trade under WTO rules: there are nine statutes and 600 statutory instruments that would need to be adopted.

The government cannot simply cut and paste the 120,000 EU statutes into UK law and then make changes to them gradually, Howard said. “The UK will need to set up new enforcement bodies and transfer new powers to regulators to create our own domestic regimes,” she said.

“Basic maths shows that we will run out of time but any gap in our system will create uncertainty or conflict,” said Howard. “Some of these regimes carry penalties such as fines – even criminal offences in some sectors.”

Unless there is an extension to article 50, both these hurdles will need to be crossed by 29 March. This, said Howard, was an impossible task. “Negotiating and ratifying the international free trade deals with the rest of the world alone could take over seven years,” she said.

“A no-deal Brexit could double prices for some products like meat and dairy. There is also a greater risk of trade disputes and sanctions, resulting in reduced market access for UK businesses.

“It’s not just about money,” she said. “We are dependent on imports for a lot of things that we don’t make any more or don’t make enough of, or simply cannot make as they are patented or subject to rules of origin – like lifesaving drugs, radioactive isotopes, chemicals (such as helium for MRI scans), medical equipment, chemicals, electricity, petrol, even milk. Shortages and delays could cause panic buying or even civil unrest.”
The Brexiteers’ idea of how WTO rules would work is pure fantasy
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Rhodri Thompson QC, a specialist in competition and EU law at Matrix Chambers, agreed. He said: “The truth is that this would be extremely difficult and would not cover much of the UK economy at all.”

Howard dismissed ideas of a transition period enabling a “gradual transition” to WTO rules as “unicorns”. “The UK will have to start negotiating over 50 free trade agreements from scratch once we leave the EU. In the meantime we will have to pay tariffs.”

Economists for Free Trade, a group with links to Jacob Rees-Mogg and David Davis, claims there is “nothing to fear” from leaving the EU without reaching an agreement.

David Collins, a professor of international economic law at City University of London, said: “The UK can trade quite easily on an uncertified schedule.”

However, Collins conceded that an uncertified schedule “might be an indication of that complaining member’s intention to initiate a dispute against the member,” and that “the WTO dispute settlement process can take several years to resolve”.

• This article was amended on 30 January 2019. Radioactive isotopes are not used in MRI scans, as an earlier version quoted Anneli Howard as saying. After publication, Howard corrected this to refer to chemicals such as helium in MRI scans, and her quote as been updated accordingly. '

This article is from The Guardian.

MaizieD Tue 28-May-19 22:16:36

Jeez, petra. He said that in October 2016. I don't think he was visualising a 'no deal' situation. No-body at that time was visualising a 'no deal' situation. NOBODY

jura2 Wed 29-May-19 16:59:58

It is amazing that most of those who say 'out, No Deal and WTO' not only have not a clue as to what the reality is- but even worse, refuse to listen to experts in the field- and still go on about 'oh have faith, be positive, it will be ok on the day' etc, etc, etc.

Nonnie Wed 29-May-19 18:01:40

With due respect to all that surely common sense is enough.

We currently trade with the EU and 70+ countries the EU has agreements with. All that will be lost under WTO. We will have a bad reputation and there will be a lack of trust, we will have no bargaining power as a single small island. How could we be worse off? I really think it may be as simple as that.

Joelsnan Wed 29-May-19 19:15:00

We currently trade with the EU and 70+ countries the EU has agreements with. All that will be lost under WTO. We will have a bad reputation and there will be a lack of trust

Please elaborate on your assertion.

jura2 Wed 29-May-19 20:11:55

Oh my ... she sad common is.

Unless you live in a sealed cave, you must be aware that the whle world has been watching the antics ... and the EU more than most. And that has led to a) bad reputation b) lack of trust ...for sure.

As for the agreements we have with WTO being effective only with us as part of the EU, the article above makes it very clear- did you read it?

jura2 Wed 29-May-19 20:12:10

she said ...

Joelsnan Wed 29-May-19 22:08:13

Do you really think the rest of the World are sat on the edge of their chairs watching the Brexit soap opera. Most are unaware of or care little of what is going on in this little group of Islands. They are getting on with their own lives and business. Those countries who currently trade with us on EU terms are probably looking at new direct deals, those who don’t currently trade may be looking at opportunities for direct trade. Business is opportunistic.

Please can you give actual examples of bad reputation and lack of trust.
BTW I did read the article. For every cry of WTO Armageddon there is a counter claim of ‘It will be fine’. You are evidently of the Armageddon camp with little or no faith in the U.K. or its people.
I look for truth and truth is confirmed by evidential actualisation. There has been no actualisation with regard to the outcome of Brexit, only supposition.

Nonnie Thu 30-May-19 12:43:07

Joelsnan what do you want me to elaborate on? It is a welll known fact that the EU has trade agreements with more than 70 countries so obviously we will lose those agreements if we leave.

I know the rest of the world is watching us. On recent travels outside the EU I heard it over and over again. They thought I would be able to explain why we were doing this disastrous thing and thought they were missing some point I could enlighten them on. I could only agree with them.

"Those countries who currently trade with us on EU terms are probably looking at new direct deals, those who don’t currently trade may be looking at opportunities for direct trade. Business is opportunistic." you are correct, I'm sure they all want deals but on their terms. We would be very vulnerable because they would know we had to agree with whatever they wanted, we would hold no cards.

If you think WTO is a good idea can you give an example of any country that trades only on WTO rules>

MaizieD Thu 30-May-19 17:52:08

If you think WTO is a good idea can you give an example of any country that trades only on WTO rules

I don't think there are any. Mauritania has been cited as one but even they benefit from the EU EBA agreement for least developed countries.

This might be helpful:

On this thread, Rory Stewart explains why WTO only is not a good idea.

jura2 Thu 30-May-19 18:56:28

I certainly know that the whole of the EU is watching us, very closely. But so are other parts of the world too, for sure.

It has little to do with having faith or no faith in the UK and/or its people ... but the realities of WTO. Won't repeat, as I have given a lot of info already- and so has Maizie above.

jura2 Thu 30-May-19 19:03:26

Rory Stewart is very clear in that video- I so hope you will take time to watch it. But sadly, that is the issue with people who say 'trust, believe and jump' - is that they rarely are prepared to listen to the reality. This is not Armageddon - it is FACT.