Is the WTO a Good Brexit Safety Net for the UK?

Published by Chris Oestereich on

I’m wrapping up a book “Keep Calm and Brexit On?” that I’ll be publishing in multiple installments. The first one, “It’s Not Dead Yet” opens the book with the usual front matter and the first couple of chapters which set the stage for last summer’s historic referendum on the UK’s EU membership. There’s a lot of detail that I couldn’t squeeze into the book, or that lacks the punch that a video can provide, so I’ll try to color in some of those bits with posts here.

First up is the illusion of a safe fallback position for the UK should negotiations go slowly or worse yet, badly. Let’s start with the facts. Should the EU fall out odd the EU without a new deal, they’d have to revert to WTO trade rules should that occur. If they did, they’d face potential complications from separating themselves from the EU’s WTO rules (read here: additional time-consuming negotiations with a clock that will have already run out).

Theresa May’s position assumes that the WTO will still be a fallback option in two years. But Donald Trump’s democratically-cancerous presidency would be enough to threaten any institution governing international trade. And Trump has specifically suggested that the US be aggressive with the WTO and that he might even start to ignore it.

Meanwhile, May’s Tories continue to run headlong into the abyss (with aplomb, I might add). Boris Johnson thinks a no-deal scenario would leave the UK “perfectly okay,” but he’s also sure that they will get a deal done in the allotted time.

[bctt tweet=”Boris Johnson thinks a no-deal scenario would leave the UK perfectly okay.” username=”costrike”]

Lord Heseltine, a former leader of the Tory governments under Margaret Thatcher and John Major, didn’t think much of Johnson’s assessment, calling it, “rubbish.”

Carolyn Fairbairn, Director General of the Confederation of British Industry, the UK’s “premier business organisation,” seemed to agree with Lord Heseltine’s assessment.

And Donald Trump has threatened to ignore WTO rulings, and take aggressive action against other countries’ “unfair” actions, the UK’s fallback plan may be a false floor.

Pascal Lamy, a former WTO offered no relief with his assessment, stating “I am pitching for the best deal, the most open, the most pragmatic, but the greatest deal we can have is going to be complex and costly.”

Richard Rose, a Professor of Politics at the University of Strathclyde, ranked the UK’s Brexit goals in a post for the LSE. He found their ambitions around negotiations with the EU to be fairly optimistic in suggesting that they were unlikely to succeed in full, and that gaining any sort of agreement might well be impossible in the allotted time.

[bctt tweet=”Let’s hope the Tories know something the rest of us don’t.” username=”costrike”]