The document discusses the potential trade relationships and World Trade Organization (WTO) obligations of the United Kingdom following its exit from the European Union. It outlines four main options: 1) remaining in the EU single market like Norway, 2) joining the EU customs union like Turkey, 3) negotiating a free trade agreement with the EU, or 4) having no special agreement and trading with the EU under standard WTO terms. For each option, it discusses the implications for UK-EU trade, the UK's independent WTO commitments, and the UK's trade with the rest of the world.

1. Peter Ungphakorn
former senior information officer
WorldTrade Organization
pmungphakorn@gmail.com https://tradebetablog.wordpress.com/

2. • Environmental goods agreement
• Fisheries subsidies (not ag in
WTO)
• Other environmental issues
• UK-EU trade relations
• UK in WTO
• EU in WTO
• Trade policies in general

3. Present situation UK is EU member
Single market
Free movement of:
 goods
 services
 capital
 people (labour)
WTO (UK and EU are members)
UK’s WTO rights and obligations
 As EU
UK’s relationship with EU
 Subject toWTO rules on “regional trade
agreements” and “Integration”
GATTArt.24 (goods)
GATSArt.5 (services)
UK’s relationship with rest-of-the-world
 Free trade agreements — via EU, also
subject toGATTArt.24 and GATSArt.5
 Standard tariffs and access to services
markets — EU ‘schedules’ of commitments
apply

4. UK and EU

5. Brexit 1 UK has full access to EU market
Single market
As EEA (Norway, Iceland, Liechtenstein),
Switzerland* — free movement of:
 goods
 services
 capital
 people (labour)
UK as WTO member
WTO rights and obligations
 Negotiate own ‘schedules’ of commitments
UK and EU
 WTO rules on “regional trade agreements”
and “Integration”
GATTArt.24 (goods), GATSArt.5 (services)
UK and rest-of-world
 Free trade agreements — also subject to
GATTArt.24 and GATSArt.5
 Standard tariffs and access to services
markets — UK has to use own
commitments for goods, services
* Switzerland’s access is via separate bilateral
agreements

6. Brexit 2 UK in EU customs union
Customs union
AsTurkey — free movement of goods (some
rules-of-origin, other customs requirements).
Services, capital, labour have access to EU
single market according to other negotiated
arrangements
UK as WTO member
UK’s WTO rights, obligations — Negotiate own
‘schedules’ of commitments
UK and EU
 Goods:WTO customs union rules —
GATTArt.24
 Services: UK’s/EU’sWTO commitments or
WTO integration rules — GATSArt.5
UK and rest-of-world
 Free trade agreements — also subject to
GATTArt.24 and GATSArt.5
 UK uses EU commitments for goods, but
has to have own commitments on services

7. Brexit 3 UK-EU free trade agreement
Free trade agreement (FTA)
 Wide variety of types
 Different coverage, depth, exceptions
 UK, EU negotiate access to each other for
goods, services (underWTO disciplines)
 Possibly capital, people/labour
 Modern FTAs: regulation, mutual
recognition, dispute settlement /arbitration,
etc
UK as WTO member
UK’s WTO rights, obligations — Negotiate own
‘schedules’ of commitments
UK and EU
 WTO rules on “regional trade agreements”
and “Integration”
GATTArt.24 (goods), GATSArt.5 (services)
UK and rest-of-world
 Free trade agreements — also subject to
GATTArt.24 and GATSArt.5
 Standard tariffs and access to services
markets — UK has to use own
commitments for goods, services

8. Brexit 4 None of the above
UK-EU
The same as with all otherWTO members
(except those with a free trade agreement or
preferential access).
UK as WTO member
UK’s WTO rights, obligations — Negotiate own
‘schedules’ of commitments
UK and EU
 Standard tariffs and access to services
markets — UK and EU have to use own
commitments for goods, services
UK and rest-of-world
 Free trade agreements — also subject to
GATTArt.24 and GATSArt.5
 Standard tariffs and access to services
markets — UK has to use own
commitments for goods, services

9. • WTO rules not just default
• Any special UK, EU bilateral relations subject to Arts.24 and 5
— grey areas, both UK and EU
have to be clever
(not handful of sectors)
• UK and non-EU countries
(FTAs, WTO trade).
Can CETA be trilateral?

10. • UK schedules, the main post-Brexit negotiation in the WTO — tariffs (including oranges,
processed foods), TRQs, ag subsidies, taking account of UK-EU trade in these
• Participation in WTO
generally, (committees,
disputes, ministerial
conference, negotiations)
capacity question
— involved in all negotiations
Tariff rate %
Quota limit tonnes
20%
80%
In-quota imports, charged 20%
Country A Country B Country C Rest of the
world
Out-of-quota
imports,
charged 80%
Imports tonnes10,000 t
An imaginary tariff-rate quota (TRQ) EU28

11. • EU 10,000–tonne TRQ divided UK:EU
• UK and EU shares subdivided between exporters
Tariff rate %
EU27 quota limit tonnes
20%
80%
In-quota EU27 imports, charged 20%
Country A Country B Country C Rest of the
world
Out-of-quota
imports,
charged 80%
Imports tonnes10,000 t
UK quota limit tonnes
Country A
Country B
Country C
Rest of the world
In-quota UK
imports, charged
20%
Haggle-points (1) UK + EU27 still fixed at 10,000 tonnes

12. EU27 quota limit tonnes
20%
80%
In-quota EU27 imports, charged 20%
Country A Country B Country C Rest of the
world
Out-of-quota
imports,
charged 80%
Imports tonnes
?
Haggle-points (2) UK + EU27 TRQ size also under negotiation
UK quota limit tonnes
Country A
Country B
Country C
Rest of the world
In-quota UK
imports, charged
20%
• Total 10,000–tonne UK+EU TRQ — also re-negotiated?
Tariff rate %

13. Latest EU certified WTO schedule, WTO document WT/LET/666 (for the EU–15) of 22 February 2010
Description of products Tariff item
number(s)
Final quota quantity and in-
quota tariff rate
Other terms and conditions
Meat of sheep or goats, fresh
chilled or frozen
0204
283 825 t
(Carcase-weight)
0%
Allocated to supplying countries as follows:
Argentina 23.000 t
Australia 18.650 t
Chile 3.000 t
New Zealand 226.700 t
Uruguay 5.800 t
Iceland 600 t
Poland 200 t
Rumania 75 t
Hungary 1.150 t
Bulgaria 1.250 t
Bosnia Herzegovina 850 t
Croatia 450 t
Slovenia 50 t
Former Yugoslav Republic of Macedonia 1.750 t
Greenland 100 t
Other 200 t
Qualification for the quota is subject to conditions laid down
in the relevant Community provisions.
2015 UK exported to EU ~75,000 tonnes duty-free

14. Commission Implementing Regulation (EU) No 1354/2011, 20 December 2011
Description of products Quota quantity and
in-quota tariff rate
Country allocations (and use Jan–Aug 2016, not whole year)
Meat of sheep or goats, fresh chilled or
frozen
0204
285 910 t
(Carcase-weight)
0%
Argentina 23 000 t (797 t)
Australia 19 186 t (9 286 t)
New Zealand 228 254 t (143 794 t)
Uruguay 5 800 (1 020 t)
Chile 7 400 t (1 939 t)
Norway 300 t (1 t)
Greenland 100 t (1 t)
Faeroes 20 t (0 t)
Turkey 200 t (0 t)
Others 200 t (0 t)
“Erga Omnes” 200 t (186 t)
(= all origins including the countries mentioned in the current table)
Iceland* 1 850 t (750 t)
2015 UK exported to EU ~75,000 tonnes duty-free

15. 0
10
20
30
40
50
60
70
80
EU Japan US Russia Switzerland Canada Norway Brazil
Water Actual AMS ($bn)
$79.7bn
$37.5bn
$19.1bn
$8.1bn
$4.3bn $3.2bn
$1.3bn $0.9bn
8.2% 14.5% 36.2%
0.6% 60.0% 19.5% 85.3% 0%
Sources: Latest information notified by WTO members. US, Russia, Brazil notified in US dollars. Others in own currencies
Unofficial conversions to US dollars, using IMF Representative Exchange Rates, July 22, 2016, for indicative comparisons only
% of trade-distorting domestic support (AMS) entitlements used, most recent information

16. — tariffs, TRQs, ag subsidies (also with environmental impact)
www.economistsforbrexit.co.uk/

17. • Budget, policy impact on CAP / CAP
reform
• UK-Ireland border, market access
• Others
http://ec.europa.eu/budget/figures/interactive/index_en.cfm
BE
4%
BG
0%
CZ
1% DK
2%
DE
20%
EE
0%
IE
1%
EL
1%
ES
7%
FR
15%
HR
0%
IT
12%
CY
0%
LV
0%
LT
0%
LU
0%
HU
1%
MT
0%
NL
6%
AT
2%
PL
3%
PT
1%
RO
1%
SI
0%
SK
1%
FI
1%
SE
3%
UK
16%
UK share of EU budget revenue 2015

18. • Budget, policy impact on CAP / CAP
reform
• UK-Ireland border, market access
• Others
http://ec.europa.eu/budget/figures/interactive/index_en.cfm
BE
5%
BG
2%
CZ
5%
DK
1%
DE
8%
EE
0%
IE
2%
EL
5%
ES
11%
FR
11%
HR
0%
IT
9%
CY
0%
LV
1%
LT
1%
LU
1%
HU
4%
MT
0%
NL
2%
AT
1%
PL
10%
PT
2%
RO
5%
SI
1%
SK
3%
FI
1%
SE
1%
UK
6%
UK share of EU expenditure 2015

19. • Environmental goods (free trade negotiations)
• Fisheries subsidies (not ag in WTO)
• Other environmental issues

20. duty-free/low duty for products
based on 54-item APEC list
Deadlock over list:
— bicycles?
The Australian government says …
http://dfat.gov.au/trade/agreements/environmental-goods-
agreement/Pages/environmental-goods-agreement.aspx

21. • Transparency
• Disciplines
• Exceptions — developing countries,
artisanal fishing
Members ‘sharply divided’
• www.wto.org/fish
• www.wto.org/english/thewto_e/minist_e/mc10_e/briefing_notes_e/brief_antidumping_e.htm