According to the British trade minister the UK would offer international trading partners deals that would match the EU's current terms under World Trade Organization rules, once the Brexit process has been completed. Responding to a written question in the UK Parliament, Liam Fox said the country would prepare commitments on market access and tariffs, known as schedules, to prepare for independent membership of the WTO when it leaves the EU trading block.
Currently the UK does not currently have individual WTO membership, but is part of the trade body through its EU membership and the EU is responsible for all trade policy issues affecting member states.
Liam Fox is suggesting that it would offer trade schedules identical to those that the EU now offers under its WTO membership. “In order to minimise disruption to global trade as we leave the EU, over the coming period government will prepare the necessary draft schedules which replicate as far as possible the current obligations,” Fox said in a recent statement.
There is no automatic membership to the WTO – the UK will have to apply for membership after the Article 50 process is concluded. This process could take years as the UK government has to negotiate terms with each and every member of the global trade body.
Fox explained “this work is a necessary part of leaving the EU,” the statement sets out. “It does not prejudge the outcome of the eventual UK-EU trading arrangements.”
The UK must decide upon the trading relationship it wants with the EU after it leaves and negotiate an appropriate deal thereafter. One option would be membership of the European Economic Area, a trade association including non-EU members - Norway, Iceland and Liechtenstein that provides tariff-free access for most goods. Alternatively the UK could negotiate a customs union with the EU, such the one that Turkey has. The benefit of this arrangement is that we would be free to conduct free-trade deals with third countries, despite having to adopt the same external tariff as the EU.
It is good to hear that the foreign minister, Boris Johnson, recently commented that the UK would become a “beacon of free trade” once it leaves the EU.
The comments from Liam fox came after David Davis made it very clear that the government is considering payments to the EU for market access, when answering a question from an opposition MP, saying “The major criterion is that we get the best possible access for goods and services to the European market. If that is included in what [you are] talking about, then of course we would consider it.”
The big question will be whether the future trade relationship with the EU can be agreed within the Article 50 process – something that the UK and other member state governments, including Germany, want to see – although Michel Barnier wants to focus the Article 50 discussions on exit, leaving the trade agreement until afterwards. Hopefully the national governments will prevail.