General WTO Agreements

After Brexit, the UK must re-establish its membership of the WTO on a stand-alone basis. At present, the UK is a party but for most trade purposes, the UK has participated through the European Union. The WTO agreements involve general obligations and specific commitments. Some of the general principles are mentioned above. The specific commitments are comprised in schedules agreed and filed by the WTO member states.

The general agreements and those to which the EU is now party. This includes the broad agreements to which most members are party together with the number of other agreements through which some states, usually the more developed countries are a party.

  • The core agreements include
  • the agreement on trade in goods (GATT 1994)
  • the agreement on trade in services (GATS)
  • agreement on intellectual property (TRIPS)
  • agreement on trade-related investment measures (TRIMS)
  • agreement on technical barriers to trade
  • agreement on sanitary and phytosanitary matters
  • agreement intellectual property
  • agreement on trade-related measures
  • agreement on rules of origin
  • agreement on safeguards
  • agreement on subsidies and countervailing measures
  • agreement on agriculture
  • agreements on disputes

EU UK WTO Separation Issues

An issue that arises is that some commitments are made by the EU on behalf of its members and / or jointly with its members. They may involve quotas and permissible agricultural subsidies. They must in effect be apportioned between the UK and the other states after exit.

The EU’s schedules of commitments are the baseline with reference to which future preferential trade agreements must be undertaken. Third countries would wish to know the UK’s baseline most-favored-nation commitments before considering a free-trade agreement.

The EU has bound itself to a schedule of concessions setting out the maximum tariff applicable to particular classes of goods. This is a detailed document referring to the relevant tariff headings and codes. This is the maximum tariff it can apply. WTO members may apply a lower tariff (an applied tariff). Under the most favoured nation principle, it must accord this treatment to all third countries with which it has no preferential trade agreement.

Similar issues arise under the general agreement on trade in services. There are schedules of commitments in relation to services liberalisation given by the EU to other GATS parties. Unlike the case with goods, it is only for sectors or areas as specifically listed that the EU has committed to allowing the relevant degree of access to the services market concerned. There are limitations sector by sector. There are also limitations on the manner and mode of service terms on which services are allowed.

The UK will have to make its own schedule of concessions which will be likely to be the same as those that the EU initially. Variation of the schedule of concessions may require compensating measures to parties and adversely affected. Equally in the context of services a schedule of commitments likely to replicate that of the EU and the persons would apply.

Quotas and Agriculture

Most quotas worldwide have been eliminated under the GAT T. However, there are still significant quotas in the area of agriculture. Tariff rate quotas are quota applicable to a particular quantity. There may, for example, be a lower rate of duty applicable to the first quantum of goods in that category imported into the EU on an annual basis. Licenses may be given on a first-come-first-served basis or otherwise. Tariff rate quotas will need to be divided in the same way. Third countries adversely affected may make complaints and there may be practical difficulties apportioning these quotas.

Equally the extent of agricultural subsidies is defined as part of the WTO commitment. It limits the total value of the subsidies which may distort trade, the so-called aggregate measure of support. The EU aggregate measure of support will need to be apportioned between the UK and the remaining EU members.

Other WTO Positions

There are other areas in which the UK will have to make new commitments under the WTO agreements. The Government Procurement Agreement (2014) deals with the opening of public procurement markets to nationals of other states. It applies to the provision of goods and services to state and state sector bodies including government and some governmental entities and agencies.

Trade facilitation agreements simplify customs procedures. The UK would wish to accede to it.

Most sanctions are initiated and adopted by the United Nations. UK is likely to continue to adopt and implement such sanctions in the same manner as the EU. The UK may decide to align itself with the EU sanctions regime through the political cooperation mechanisms.

The EU adopts common trade defence and protection measures including safeguards and anti-dumping measures which are permissible under WTO agreement to counteract actions on the part of other states subject to conditions. Such possibilities would continue to exist as between trade agreement parties. Provision may be made for mutual notification and prior consultation before such measures are taken.

The EU has entered a general system of preferences with developing countries. The standard preference scheme covers two-thirds of products for about 60 countries. The “Everything but Arms” scheme has zero duties on imports of all products from the least developed countries (approximately 40) for everything except arms. The GSP+ commitment allows countries additional preferences of zero tariffs if they implement 27 international labour and human right environmental and good governance conventions.

Share this article