CYIL vol. 8 (2017)

CYIL 8 ȍ2017Ȏ WTO IN CONTEXT OF BREXIT The conclusion is thus clear: the UK, as any other EU member state, is currently a full member of the WTO, and its withdrawal from the EU shall change nothing on this position. The UK’s schedule of commitments While the legal grounds for the UK’s membership in the WTO has been clarified, its position in the WTO and international trade after Brexit is far from being clear. The UK is (and will be, if it does not voluntarily leave) a member of the WTO, but its schedules of concessions has now been bundled with the EU since 1995. 32 Referring to this situation, the WTO Director-General Robert Azevêdo warned that after Brexit the UK “ will be a member with no country-specific commitments ”, asserting that the UK’s post-Brexit trade arrangements would have to start its trade arrangement from scratch without the institutional machinery necessary to negotiate trade deals. 33 That would again require the renegotiation of the UK’s schedules, which, again, could be blocked by any of the rest of the 163 WTO members. 34 To avoid trade disruption, the UK would have to negotiate its schedules not only with the EU but also with other trading partners. But if the proposition by the Director General is incorrect and the UK does have its own schedules, the renegotiations can be avoided, and the practical would be how can the UK’s rights and obligations be separated from the current bundle. Since the EU has been a custom union according to Article XXIV of the GATT, it is true that not only the EU submitted the schedules of tariffs for its members, but in addition with each enlargement of the EU, the countries joining the EU adopted the EU schedule. And this adoption of different schedules was always accompanied by complex negotiations within the WTO (or GATT 1947 before the WTO establishment in1995). That is because the modification from the country specific tariffs to the custom union tariff may be detrimental to third countries, since the union’s tariff might be higher than the old country specific tariff. 35 In these the country specific tariffs as well as those countries with “principal supplying interest” which previously agreed with the old country specific schedule are entitled to compensation. 36 Thus, for example in 2013 when Croatia joined the EU in 2013 Australia, Argentina, Brazil, China and Uruguay submitted their claims for compensation due to the EU’s higher schedules. 37 These negotiations over new schedules were neither easy nor unimportant. For example when the UK itself acceded to the EU in 1973, countries like Australia and New Zealand lost more than half of their preferential quotas for some agriculture products export to the EU. 38 33 ELLIOT, Larry, WTO chief says post-Brexit trade talks must start from scratch , The Guardian, 7 June 2016. Available at: www.theguardian.com/business/2016/jun/07/wto-chief-brexit-trade-talks-start-scratch-eu-referendum. 34 UNGPHAKORN, Peter, Nothing simple about UK regainingWTO status post-Brexit , 27 June 2016. Available at: http://www.ictsd.org/opinion/nothing-simple-about-uk-regaining-wto-status-post-brexit. 35 MATTHEWS, Allan, WTO dimension of a UK Brexit and agriculture trade , January 5, 2016. Available at: http:// capreform.eu/wto-dimensions-of-a-uk-brexit-and-agricultural-trade/. 36 Article XXVIII GATT. 37 MATTHEWS, Allan, supra note 35. 38 HÄBERLI, Christian, Brexit Without WTO-Problems: For the UK? The EU? Global Business?, Global Trade and Customs Journal , Volume 12 (2017), Issue 3, p. 73 -91. 5. 32 Schedule LXXX, Schedule CXL, 27 October 2012, WT/Let/868, and non-certified schedule submitted on 25 April 2014 G/MA/TAR/RS/357.

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