International trade law is about to become a whole lot more relevant to UK businesses, as the UK is going ahead in fledgling its independent trade policy.
On 24th July, an important milestone was reached when the UK submitted its draft schedule of commitments for goods for certification to the WTO (see link). Although this is arguably a minor Brexit task, it is extremely important. For one thing, without a schedule of commitments, there will be no 'WTO terms' to fall back on in the event of "no deal" with the EU.
For the past two years, the UK Government has constantly stated to its WTO partners that it wanted to make its job as easy as possible by keeping as much as possible the same as the EU's commitments for goods. Most commitments – such as tariffs on goods – can simply be copied across. For this reason, the UK is officially considering that this notification constitute a rectification of its concessions under WTO law on the basis that the schedule replicates the concessions and commitments currently applicable to the UK as an EU Member State (and therefore expects that the draft schedule of commitments will be considered approved unless WTO Members object within 3 months).
But is trade policy really that simple? As recent events have taught us, for someone to win, it is common that concessions have to be made. And some WTO members have already publicly rejected the UK Government's plan so far. They consider that the UK must re-negotiate its schedule of commitments for goods (and that the certification process therefore is not applicable). Also, others tariffs are proving much less straight-forward. The most complicated to deal with are the EU bloc's Tariff Rate Quotas (or "TRQs"), which cannot be copied because they set a maximum quantity for imports into the EU as a whole (including the UK), so separating these out requires apportioning the quota between the UK and the EU27. While the EU and the UK have come close to a mutual proposed solution to present to its WTO counterparts on the apportionment calculation , several countries recently stated that given the uncertainty surrounding the future relationship between the EU and the UK after Brexit, the proposed draft solution was just “untimely.”
Is there another trade war looming? Watch this space, and carry on.