One of the pieces of misinformation we’re all being fed about the position of Britain post-Brexit, after we leave the European Union, is that we’re all going to have some terrible problem with the World Trade Organisation. The argument goes like this. After we’re out of the EU then we need to have some sort of system which regulates trade. As I’ve already said I’d prefer unilateral free trade but understand that many don’t. But what people then say is that as we won’t have a WTO deal, or perhaps not the right kind of paperwork filled out, then we’re not going to be able to trade at all.
This is of course ridiculous. Firstly, on purely pragmatic grounds. Britain is the world’s 5th largest economy (depends who is counting, maybe 6th) and it’s just not true that the rest of the world is going to stop trade just because there’s a jot or tittle missing on a document or two. The more anally retentive among the bureaucracy may believe that the world dances to their whim, to the rules that they put on their pieces of paper, but the truth is that we humour them more than anything else. No one is going to stop getting maintenance for their Rolls Royce jet engines (yes, that’s a British export) because 192 nations haven’t signed off on some schedule. Nor are the farmers of Normandy going to stop sending us cheese for the same reason.
The real world just doesn’t work that way. When push comes to shove it’ll be shove the paperwork and push the trade.
But rather more than that there is no need or requirement to gain some new deal. I’ve checked this by actually talking to the WTO itself when I enquired about the insistences of Nick Clegg on the matter. I was greeted with gales of laughter on the point and a gentle pointing out that Britain was currently a member of the WTO. We were a founding member, we are a member today and we’ll be a member after Brexit.
As such we will face tariffs that other countries impose upon imports just the same as any other WTO member. We will also have Most Favoured Nation status (which is essentially synonymous with being a WTO member) and so will face the same tariffs in any one country as any other MFN does. If the US charges 5% (or whatever) on French camembert then Somerset camembert will pay 5% on import into the US. That’s just how the system works. Further, whatever duties we wish to impose on imports into the UK are entirely up to us. We cannot charge more than the WTO ceilings, and we must charge the same for the same goods from different sources under the MFN clauses, but charging a duty of 0%, 0.1%, or that ceiling, is all equally allowed.
Me, I say charge 0% so that we get to enjoy all those lovely things J. Foreigner makes better than we do and who gives a damn what they deny their own citizens among our production?
And today we have confirmation of this, how the
WTO works:
Last week there was a welcome confirmation from the Head of the WTO that Leave were correct. He said “The UK is a member of the WTO today, it will be a member tomorrow. There will be no discontinuity in its membership…” (when we leave the EU). “Trade will not stop. It will continue and members negotiate the legal basis under which that trade is going to happen”.
I also consulted a WTO legal expert. He confirmed that whilst the EU exercises the votes and voice for all EU states, the individual member states are not just members in their own right as well, but each member state pays its own membership subscription. This shows just how wrong it was to say we would have a long process to rejoin. We are full paying club members who will get our vote and voice back when we leave the EU.
We simply do not have a WTO problem post-Brexit. So can we stop that continuation of Project Fear that keeps insisting that we do?
Found that on Forbes. I'm not an expert either.
