Law and Lawyers: A No Deal Brexit ~ Government Preparations for no deal ~ The WTO

Monday, 27 August 2018

A No Deal Brexit ~ Government Preparations for no deal ~ The WTO

What will happen after 29 March 2019 if there is no Withdrawal Agreement between the UK and the EU? In this "no deal" or "cliff edge" scenario, the UK would step entirely away from the EU ("third country status") and there would not be an implementation / transition period to protect British business / commerce from the inevitable ravages of such a status. How should businesses and individuals prepare for this situation?

On 23 August, the UK government published Preparations for a No Deal Brexit. The speech of the Secretary of State for Exiting the EU is HERE. Just how confident one should be that a deal will be achieved is highly debatable even though the Minister referred to a No Deal Brexit as an "unlikely event" and said that he was confident that a "good deal is within our sights."

UK government's preparations for a No Deal scenario - states that "the government will be publishing a series of technical notices during August and September. These notices will set out information to allow businesses and citizens to understand what they would need to do in a ‘no deal’ scenario, so they can make informed plans and preparations." 24 notices (plus an overview document) were published on 23 August and more will be issued in September.

At the moment, there are many crucial omissions from the published notices. For example, how will the rights of EU citizens living in the UK be protected? Then there is the Irish border question. No solutions appear in the material so far issued. The whole picture is complex and unclear and the government's notices only begin to scratch the surface of what will need to be done. Furthermore, as the Institute for Government noted in June 2018, hundreds of pieces of secondary legislation will be required to provide legal certainty ahead of day one outside the EU.

It is to be hoped that a Withdrawal Agreement is achieved. The "no deal" scenario is an ugly prospect.

: World Trade Organization (WTO) :

There appears to be a view - strongly put forward by some prominent Brexiteers - that the UK can simply trade on "WTO terms" as soon as it leaves the EU even though it is not necessarily true that the UK will be able to do so. Roberto Azevedo (Director General of the WTO) has said that it will be very unlikely that there will be a 100% agreed outcome for all WTO members between now and March 2019. "If an agreement is not reached with the EU and WTO rules are not immediately available, the UK would be in uncharted territory, as it would be unclear what rules and tariffs apply to imports and exports" -The Independent 24 August

Furthermore, the WTO itself is operating under some significant challenges - Bloomberg 11 April 2018 - and the USA Trump administration is blocking appointments to the WTO's appellate body. Furthermore, President Trump has threatened to withdraw the USA from the WTO - BBC News 31 August 2018 and also BBC News 11 June 2018.

On 24 July, WTO members received the United Kingdom’s draft schedule setting out its WTO market access commitments for goods once the UK leaves the European Union. A 3 month review period exists to enable members to review the schedule - WTO News and also - Reuters 24 July. See also the Statement in the House of Commons (19 July) by the Secretary of State for International Trade (Mr Liam Fox MP).

Britain’s draft document, officially known as its “schedule”, is 719 pages long. It will be considered to be approved if there are no objections from other members within the 3 month review period.

The WTO will not be an easy alternative for the UK. Professor Alan Winters (Director of the UK Trade Policy Observatory and Professor of Economics at the University of Sussex Business School) looks at this in a useful article published by Politics.co.uk where he concludes by saying: