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Today the UK and EU moved a step closer to unwinding their joint @wto trade relationship. Each filed documents in Geneva outlining the terms they will use to trade with the rest of the world once Britain leaves the EU.
The two submissions are fundamentally different.
The EU said it will renegotiate its @wto trade commitments to account for Britain's departure from the 28-nation bloc under Article 28 of the GATT.
Link here: http://bit.ly/2LAlkfd
Link here: http://bit.ly/2LAlkfd
The @wto's Article 28 process involves a laborious and lengthy renegotiation with the WTO's 136 other countries -- each of whom will be seeking increased market access from the EU's 27 remaining members in order to account for the loss of the UK market.
The UK on the other hand, will only make technical changes to its current @wto commitments via a 1980 procedure known as a technical rectification.
Link 1: http://bit.ly/2v48I5R
Link 2: http://bit.ly/2uK852e
Link 1: http://bit.ly/2v48I5R
Link 2: http://bit.ly/2uK852e
Background: The UK's goal is to ensure that it possesses an independent @wto schedule of concessions, which reflect tariff commitments and agreed-upon terms relating to trade in goods and services.
Background: Though the UK is a @wto member in its own right, its WTO commitments are established in the European Communities’ schedule of concessions rather than in an individual U.K. schedule.
Background: The failure to assert an independent UK schedule at the @wto could leave a Britain without a baseline legal foundation on which to trade if it ultimately leaves the European single market and customs union.
The sticky wicket for both the EU and the UK is the their proposal to “apportion” their joint tariff rate quota (TRQ) commitments, which set import limits on sensitive goods such as beef, lamb, and sugar.
Link: http://bit.ly/2LnozYk
Link: http://bit.ly/2LnozYk
Various agricultural exporting nations have warned that the proposed TRQ split is too rigid and would prevent companies from adjusting their shipments of goods to either the EU or the UK if trade flows change in the future.
In 2017 the US and six other countries said they opposed the UK-EU TRQ approach and said they expect Britain and the EU to make sure countries entitled to access rights are left no worse off than they currently are.
Link: http://bit.ly/2O0Eqtr
Link: http://bit.ly/2O0Eqtr
These countries -- or any other WTO members -- can object (and are likely to object) to the @wto secretariat's certification of the UK's schedules and bog down the renegotiation of the EU's schedules.
This is expected.
What happens next is the exciting part. The EU, UK and any aggrieved @wto members will engage in negotiations aimed at ensuring their trade is not harmed by the EU/UK split. Aggrieved parties will demand their pound of flesh and the EU/U.K. will counter or reject.
The prize for most countries will be gaining greater access to the EU marketplace via Article 28 renegotiation.
Imagine the madness of a Black Friday sale.
Imagine the madness of a Black Friday sale.
Though the UK and any affected WTO members still have time to negotiate a mutually agreeable solution, that window is narrowing because Britain will no longer be an EU member after March 30, 2019—or at the latest, after Dec. 31, 2020, if a transitional arrangement is secured.
There is a belief among various @wto members that these talks will ultimately devolve into dispute settlement proceedings to determine the legality of the UK's rectification bid and the EU's Article 28 renegotiation effort.
If dispute settlement proceedings transpire, it would cast a shadow of uncertainty over the UK's trade commitments for years and a decision may never be rendered if the U.S. continues to block the appointment of @wto appellate body members.
Bottom line. This ain't over by a long shot.
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