W.T.O Part 1

If you had not given this one neuron of brain space until a few weeks ago then ..same here. I have lots of other more entertaining things to think about.

However, we are now looking down a barrel of a gun. Theresa May has said it is either Chequers ‘agreement’ type deal or No Deal.

What the heck does that mean?

I’ll leave Chequers deal for now other than to say it does not look hopeful that the EU – 27 are going to agree to it because we are cherry picking – we want to be in some aspects of the EU but not in others which would break agreed ratified positions of the EU. (I have described this in more detail in my second letter to Sheryll Murray MP here).

How about a No Deal? What happens in a No Deal?

This is where the W.T.O comes in.

My understanding is that the WTO (of which we are a member) has set the bottom line/ bare minimum requirements for trade and it involves tariffs. These tariffs are high and therefore detrimental to trade and so countries spend years and years negotiating better ‘Free Trade Agreements’. They take years to make because they are complicated involving lots of goods and services and everyone involved picks over them and there are always compromises.

At the moment, the negotiations with the EU-27 are about agreeing the terms of exit including a transition period. If we leave without a deal then we do not have this period and that is where all the news about stock piling is coming from. I have just googled ‘stockpiling food and medicine’…lots of articles but at the bottom there is a company selling food that lasts 25 years – so good for their business I suppose!

So assuming we survive that, we then start trading on W.T.O. and start negotiating with EU-27 and the rest of the world to build up trade deals again from scratch…that will take years.

Worth noting that we already trade under WTO rules but the EU has negotiated trade agreements with Canada, Japan and so on. We are already trading with the rest of the world and we have more power in future negotiations as part of the EU because the EU is bigger and wealthier (and so has more leverage) than the UK on its own. If we leave on WTO terms then these agreements also stop. We will not just be able to copy and paste those agreements into bilateral agreements with the UK – we will have to start again.

My next question is what is motivating those people driving this act of self harm?

I will leave that as an open question for now…

References/ Links:

James Hardy has a really good blog on WTO but I could not work out how to link to it. You can find him on Twitter @MrWeeble / google:

who actually trades under WTO rules? James Hardy

This is a useful articles from FFS:

https://theferret.scot/explainer-european-union-trade-uk-brexit/

Look up Jason Hunter on Twitter @JasonJHunter

He is one of the Three Blokes in a Pub and Episode 2 is about WTO