A new report from academic think tank The UK in a Changing Europe explains what trading on WTO terms would really mean.
The report shows:
- No WTO member trades on WTO terms only – they all have agreements with other countries, especially their nearest neighbours.
- It’s often said we trade with the US on WTO terms. In reality, we have more than 100 separate bilateral agreements with them
- WTO terms are relatively comprehensive on goods but far less so on services-( 45% of UK exports). Barriers to trade in services in particular will increase substantially under WTO terms
- If we traded under WTO terms, barriers would be inevitable between Northern Ireland and the Republic of Ireland
- The UK would also lose the free trade agreements the EU has signed with other countries
- Gains from a zero-tariff policy would be nil or limited for more than half of the goods the UK imports
- The UK is already a member of the WTO so would not have to apply, although it will have to re-negotiate its commitments
Professor Anand Menon, director of The UK in a Changing Europe, said: “Parliament has begun perhaps its most important peace-time deliberation. A lot of MPs are claiming that trading with the EU on WTO terms would be an acceptable outcome. The report investigates this claim and underlines that trading on WTO terms would be highly damaging to UK trade with the EU and other countries.”
There is also a long version of the report, What would ‘trading on WTO terms’ mean for the UK?, which was written by Catherine Barnard, Katy Hayward, David Henig, Holger Hestermeyer, Emilija Leinarte, Sam Lowe, Steve Peers, and Peter Ungphakorn.