CYIL vol. 8 (2017)

CYIL 8 ȍ2017Ȏ WTO IN CONTEXT OF BREXIT (the “EU”) sixty year history by the others 2 , the decision has also triggered endless legal debates. Initially the debates focused rather on the process of triggering Article 50 of the Treaty on European Union 3 and the connected complexities of the UK’s constitutional law 4 or the related issues of the law of the EU. But, and more importantly for the purpose of this paper, it has become gradually clear that it will be the law of the World Trade Organisation which shall be playing a central role in the “Brexit world”. 5 Since the current trading arrangement of the UK vis a vis the EU members will cease to exist after the withdrawal from the union, the UK government will have to determine its future trade relations with the other 27 members of the EU (“EU – 27”) as well as with the rest of the world. 6 The aim of this paper is to point out some of the major challenges which the UK government can expect to face in its future trade relations from the view of the international law of the World Trade Organisation. Since some basic information of the WTO law framework is necessary for understanding of this paper’s focus, the key questions of this paper are set out below, in part 3 of the paper, following a very short introduction of the necessary points of WTO law. Why does WTO law matter? Since 1947 the international trade law has undertaken a rather uneasy, though quite successful, path, leading to the establishment of the World Trade Organization (“WTO) in 1995. The law of the WTO provides a legal framework for trade relations between the contracting parties to the WTO. 7 Today, the WTO has 164 members; the amount of trade undertaken by all WTO members currently accounts for 95% of world trade. 8 The WTO law’s major task is to liberalize trade through improving market access between different states. That is principally done by lowering tariffs and reducing or eliminating other trade barriers. 9 One of the most important legal principles of WTO law is the rule of most favoured nation treatment (“MFN”), which demands that the country (or more precisely the contracting party to the WTO) does not discriminate between other WTO members. 10 This MFN rule thus concerns the application of the same tariffs or equal market access provided to all WTO members by a state (or other contracting party to the WTO, such as custom union). 11 2 WILKINSON, Michael, MIDGLEY, Robert, What is Article 50? The only explanation you need to read, the Telegraph , 31 March 2017. 3 Article 50 of the Treaty on European Union, http://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri= CELEX:12012M/TXT&from=en. 4 See for example: Mark Elliott, Public law for everyone blog , https://publiclawforeveryone.com. 5 HESTERMEYER, Holger, ORTINO, Federico, Towards a UK Trade Policy Post-Brexit: The Beginning of a Complex Journey , King’s College London Law School Research Paper No. 2017-04, 30 October 2016, https:// papers.ssrn.com/sol3/papers.cfm?abstract_id=2861488. 6 House of Lords, European Union Committee, 5 th report of session 2016-17 , Brexit the options for trade, https:// www.publications.parliament.uk/pa/ld201617/ldselect/ldeucom/72/72.pdf. 7 ŠTURMA, Pavel, BALAŠ, Vladimír, Mezinárodní ekonomické právo , C. H. Beck, 2 vydání, 2013. 8 World Trade Organisation, Members and Observers, Available at: https://www.wto.org/english/thewto_e/ whatis_e/tif_e/org6_e.htm. 9 MATSUSHITA, Mitsuo, SCHOENBAUM, Thomas J., MAVROIDIS, Petros C., HAHN, Michael, TheWorld Trade Organisation , Oxford University Press, third edition, chapter eight. 10 Ibid , chapter six. 11 Ibid . 2.

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