WTO sees ‘devilishly complicated’ Brexit challenge

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The World Trade Organisation has told Sky News that Brexit has created “unprecedented” challenges but that the UK could become a prominent voice in shaping the future of world trade.

The WTO, based in Geneva, creates the rules used to shape much of global trade.

Once the UK leaves the free trade area of the European Union, it is likely to lean heavily on WTO regulations.

In the event of a no-deal Brexit, the WTO’s regulations would cover almost all of British international trade.

Keith Rockwell, the organisation’s chief spokesman, told me that “the circumstances involving Brexit are without any precedent at all in this organisation”.

He said: “Everyone is being pragmatic and wants to see trade to move as freely as it can as we get through this rather tricky stretch that might await us.

“We’ve never had a member, let alone a founding member, be in this position before, of having to renegotiate their position.

“When you examine this, it becomes devilishly complicated. Nobody expects this to be without complication.

“Let’s wait and see – there is a huge reservoir of goodwill for the UK within this organisation.

“There are countries that have traded with Britain for decades, if not centuries.

“But they are trade negotiators and they are looking out for the best interests of their people.”

Representing the UK in those talks will be Julian Braithwaite, the ambassador and permanent representative to no fewer than 37 organisations in Geneva – including the WTO.

When he came to Geneva four years ago, the WTO took up a small fraction of his time – after Brexit it will be his focus.

He told me that he still hoped that the government would achieve its withdrawal agreement, but conceded that his team had worked on contingency plans for everything from joining a customs union all the way through to Britain leaving without a deal on 29 March.

And it is the prospect of a no-deal Brexit that increasingly preoccupies him, and many others at the WTO.

“The sort of issues we’re look at is how could we use the power we would have in the WTO to regulate our tariffs to minimise impact on consumers, supply chains and mitigate implications of leaving the EU without a deal – those are the sort of issues that are being considered,” he said.

Tariffs are discussed constantly in Geneva.

Each member country has a huge document, known as a schedule, that details the tax that will be charged on products that are exported between one nation and another.

The WTO’s members agree a maximum rate, and individual countries can impose a lower rate if they wish.

British trade negotiators have spent months preparing a bespoke set of tariffs that the UK would use after Brexit, largely based upon the existing schedule inherited from the European Union.

Sky News understands that the UK’s proposals are likely to be presented in the coming weeks.

Senior Brexiteers, including the International Trade Secretary Liam Fox, nd the former Brexit Secretary David Davis, have flagged the possibility of reducing some tariffs to zero in order to cut the price of imports and stimulate the economy.

It’s a suggestion that has been met by some raised eyebrows here in Geneva.

Dimitry Grozoubinski, a former trade negotiator for the Australian government, told Sky News that such a move “will have very real winners and losers”.

He told me: “Under WTO rules you can’t just reduce tariffs to help the European Union in the absence of a free trade, you have to throw open the doors to everyone.

“Are the UK public and business really prepared to compete, one-on-one, with Chinese manufacturing, or US agriculture, or Australian beef and lamb?

“It would be an unprecedentedly sharp step to take.”

(c) Sky News 2019: WTO sees ‘devilishly complicated’ Brexit challenge

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