Deep and not comprehensive? What the WTO rules permit for a UK-EU trade agreement

Lydgate, Emily and Winters, L. Alan (2017) Deep and not comprehensive? What the WTO rules permit for a UK-EU trade agreement. Working Paper. University of Sussex, University of Sussex.

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WTO rules prohibit Free Trade Areas (FTAs) that provide tariff-free access or services liberalisation in only one or a few sectors. In this sense, a narrow, sectoral approach to concluding an FTA between the EU and the UK would contravene WTO law. However, assuming the EU and the UK were able to agree a substantially broad tariff-free FTA, WTO rules would not prevent them from moving further to maintain the bulk of the benefits of the Customs Union and the Single Market in a few key sectors. They could establish customs union-like conditions by coordinating external tariffs in some sectors and agreeing on relaxed Rules of Origin (RoOs) administered lightly and Single Market-like access could be approximated through sectoral Mutual Recognition Agreements. Such an approach would enable continued deep integration, whose desirability has been signalled on both sides. It would fall short of current market access levels even in the selected sectors and, in the case of tariff coordination, re-create some of the limits to an independent trade policy that Brexit aimed to remove. If the trade-off were deemed desirable, however, the approach could be reconciled with WTO rules including the ‘Most Favoured Nation’ requirement that equal treatment be awarded to all WTO Member States.

Item Type: Reports and working papers (Working Paper)
Keywords: Free Trade Agreements; WTO; Brexit; European Union
Schools and Departments: School of Law, Politics and Sociology > Law
Subjects: K Law
Depositing User: Emily Lydgate
Date Deposited: 21 Sep 2017 09:29
Last Modified: 21 Sep 2017 09:29

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