What does leaving the EU on WTO terms actually mean?
What does leaving the EU on WTO terms actually mean?
Word of the Day
WTO
The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations. At its heart are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations and ratified in their parliaments. The goal is to ensure that trade flows as smoothly, predictably and freely as possible.
The WTO has over 160 members representing 98 per cent of world trade. Over 20 countries are seeking to join the WTO.
Despite MPs voting against a no deal in March 2019, it still remains the legal default for Brexit until some kind of withdrawal agreement is passed by Parliament. A no deal Brexit would mean we leave the EU, as well as the single market and customs union, and begin trading with the EU on WTO terms.
Under WTO rules, countries set their own import rules, so a no deal Brexit means that the government could, in theory, allow goods and services from all countries across the world to be imported into the UK without tariffs or quotas.
But it doesn’t mean other countries would have to do the same, meaning that UK exports to those countries would, in many cases, face tariffs and restrictions.
In any case, the government have said that under a no deal Brexit scenario, tariffs would still apply to 13% of goods (by value) imported into the UK for up to 12 months. During that time it will undertake a review on a long-term approach to tariffs.
Another way of thinking about free trade is that the UK would be able to decide for itself how trade with other countries would operate. In the longer-term a no deal Brexit would give the UK the greatest agency over its future trade deals, although the exact terms would have to be agreed in negotiation with each individual country. These deals would likely take years to negotiate. Source: https://fullfact.org.
| Formation | 1 January 1995; 24 years ago |
| Type | International trade organization |
| Purpose | Reduction of tariffs and other barriers to trade |
| Headquarters | Centre William Rappard, Geneva, Switzerland |
| Membership | 164 member states |
| Official language | English, French, Spanish |
| Director-General | Roberto Azevêdo |
| Budget | 197.2 million Swiss Francs (approx. 209 million US$) in 2018. |
| Staff | 640 |
