It will take up to seven years for the UK to have frictionless, tariff-free trade should the UK leave the EU without a deal, two EU law specialists have told The Guardian.
Anneli Howard, a specialist in EU and competition law at Monckton Chambers, and Rhodri Thompson QC, a specialist in competition and EU law at Matrix Chambers, have both spoken of the difficulties involved in negotiating and ratifying international trade deals and the prospect of a deep recession in the event of a no-deal.
Howard has then claimed that it will take up to 7 years for the UK to negotiate and ratify independent trade deals with partners outside of the EU.
Two hurdles to trading on current WTO tariffs
In the meantime, there are two major hurdles to the UK trading on current WTO tariffs in the event of a no-deal.
- The UK will need to produce its own schedules covering services and all of the 5,000-plus product lines covered in the WTO agreement with the EU. This would have to be agreed by all 163 WTO states by the date of the UK’s exit from the EU - currently set at 29 March 2019. The UK had tried to replicate the EU schedule for its existing tariffs and tariff-free trade quotas but has since been blocked from doing so.
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Domestic legislation would also need to be passed - nine statutes and 600 statutory instruments would need to be adopted in UK law. According to Howard, the UK cannot cut and paste EU statutes into UK law and then make changes gradually.
The government itself has stated that in the worst case no-deal scenario, UK GDP would end up being 10.7% lower in 15 years compared to if the UK were to remain in the EU.
It has also been widely reported , however, that until new schedules are ratified, the UK will be able to continue trading internationally using uncertified schedules - something the EU has done in the past while negotiating its own schedules, which it has had to do whenever a country has newly joined the trade bloc.
Further information
To read more of Howard and Thompson’s legal analysis, read The Guardian’s report: ‘UK cannot simply trade on WTO terms after no-deal Brexit, say experts'
You can read more about some of the implications of a no-deal Brexit in our ‘What you need to know about the WTO’ blog.
We also have a Bitesize Chunk explaining:
- what the WTO does
- the General System Preference Donor countries and the different types of GSP categories
- the mechanics of Preferential Trade Agreements
- Rules of Origin
- cumulation in relation to Preferential Trade
- distinguish between Free Trade Agreement and Preferential Trade Agreement
- identify why companies use trade agreements