Deep and Not Comprehensive? What the WTO Rules Permit for a UK–EU FTA

WTO rules prohibit Free Trade Areas (FTAs) that provide tariff-free access or services liberalization in only one or a few sectors. In this sense, a narrow, sectoral approach to concluding an FTA between the EU and the UK would contravene WTO law. However, assuming the EU and the UK were able to agr...

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Bibliographic Details
Published inWorld trade review Vol. 18; no. 3; pp. 451 - 479
Main Authors LYDGATE, EMILY, WINTERS, L. ALAN
Format Journal Article
LanguageEnglish
Published Cambridge, UK Cambridge University Press 01.07.2019
Subjects
Access
Commercial policy
Commercial treaties
Coordination
Customs unions
Decision making
EU membership
European Economic Area
Free trade
International law
Law and legislation
Liberalization
Markets
Most favored nation clause
Tariff
Tariffs
Trade agreements
Trade policy
World Trade Organization
EUROPEAN UNION
GREAT BRITAIN
United Kingdom > UK
Canada
Switzerland
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Summary:WTO rules prohibit Free Trade Areas (FTAs) that provide tariff-free access or services liberalization in only one or a few sectors. In this sense, a narrow, sectoral approach to concluding an FTA between the EU and the UK would contravene WTO law. However, assuming the EU and the UK were able to agree a substantially broad tariff-free FTA, WTO rules would not prevent them from moving further to maintain the bulk of the benefits of the Customs Union and the Single Market in a few key sectors. They could establish customs union-like conditions by coordinating external tariffs in some sectors and agreeing on relaxed Rules of Origin (RoOs) administered lightly and Single Market-like access could be approximated through sectoral Mutual Recognition Agreements. Such an approach would enable continued deep integration, whose desirability has been signalled on both sides. It would fall short of current market access levels even in the selected sectors, and, in the case of tariff coordination, re-create some of the limits to an independent trade policy that Brexit aimed to remove. If the trade-off were deemed desirable, however, the approach could be reconciled with WTO rules including the ‘Most Favoured Nation’ requirement that equal treatment be awarded to all WTO Member States.
Bibliography:WORLD TRADE REVIEW, Vol. 18, No. 3, Jul 2019, 451-479
Informit, Melbourne (Vic)
ISSN:1474-7456
1475-3138
DOI:10.1017/S1474745618000186