Hostname: page-component-8448b6f56d-sxzjt Total loading time: 0 Render date: 2024-04-23T21:55:29.551Z Has data issue: false hasContentIssue false
  • English
  • Français

Deep and Not Comprehensive? What the WTO Rules Permit for a UK–EU FTA

Published online by Cambridge University Press:  29 May 2018

EMILY LYDGATE  and
L. ALAN WINTERS
EMILY LYDGATE*
Affiliation:
UK Trade Policy Observatory, University of Sussex
L. ALAN WINTERS*
Affiliation:
UK Trade Policy Observatory, University of Sussex
*
*Email: e.lydgate@sussex.ac.uk.
**Email: L.A.Winters@sussex.ac.uk.
Get access Rights & Permissions [Opens in a new window]

Abstract

WTO rules prohibit Free Trade Areas (FTAs) that provide tariff-free access or services liberalization in only one or a few sectors. In this sense, a narrow, sectoral approach to concluding an FTA between the EU and the UK would contravene WTO law. However, assuming the EU and the UK were able to agree a substantially broad tariff-free FTA, WTO rules would not prevent them from moving further to maintain the bulk of the benefits of the Customs Union and the Single Market in a few key sectors. They could establish customs union-like conditions by coordinating external tariffs in some sectors and agreeing on relaxed Rules of Origin (RoOs) administered lightly and Single Market-like access could be approximated through sectoral Mutual Recognition Agreements. Such an approach would enable continued deep integration, whose desirability has been signalled on both sides. It would fall short of current market access levels even in the selected sectors, and, in the case of tariff coordination, re-create some of the limits to an independent trade policy that Brexit aimed to remove. If the trade-off were deemed desirable, however, the approach could be reconciled with WTO rules including the ‘Most Favoured Nation’ requirement that equal treatment be awarded to all WTO Member States.

Type
Review Article
Information
World Trade Review , Volume 18 , Issue 3 , July 2019 , pp. 451 - 479
Copyright
Copyright © Emily Lydgate And L. Alan Winters 2018 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

We thank Ingo Borchert, Peter Holmes, Federico Ortino, and Geraldo Vidigal Neto for comments on a previous draft. Thanks also to two anonymous reviewers for helpful comments, as well as participants at a UK Trade Policy Observatory (UKTPO) seminar on this subject on 22 February 2017 at Chatham House. Naturally, none of these people is responsible for the paper's remaining shortcomings. All editorial processes for this paper were handled by Professor Petros Mavroidis.

References

Adlung, R. (2015), ‘The Trade in Services Agreement (TISA) and Its Compatibility with GATS: An Assessment Based on Current Evidence’, World Trade Review, 14(4): 617–641.Google Scholar
Bartels, L. (2005), ‘The Legality of the EC Mutual Recognition Clause under WTO Law’, Journal of International Economic Law, 8(3): 691–720.Google Scholar
Borchert, I. (2016), ‘Services Trade in the UK: What is at Stake’, UKTPO Briefing Paper 6, UK Trade Policy Observatory, University of Sussex.Google Scholar
Correia de Brito, A., Kauffmann, C., and Pelkmans, J. (2016), ‘The Contribution of Mutual Recognition to International Regulatory Cooperation’, OECD Regulatory Policy Working Papers, No. 2, OECD Publishing, Paris, www.oecd.org/gov/regulatory-policy/WP2_Contribution-of-mutual-recognition-to-IRC.pdf.Google Scholar
Cottier, T. and Molinuevo, M. (2008), ‘Article V GATS’, in Wolfrum, R., Stoll, P. T., and Seibert-Fohr, A. (eds.), WTO – Trade in Services, Leiden, The Netherlands: Koninklijke Brill NV, pp, 125–164.Google Scholar
EC–Turkey Association Council (1996), ‘Decision No. 1/95 of the EC–Turkey Association Council of 22 December 1995 on Implementing the Final Phase of the Customs Union’, OJ L 035, 2 February 1996, http://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1499782930781&uri=CELEX:21996D0213(01).Google Scholar
Echols, M. A. (2013), ‘Equivalence and Risk Regulation under the WTO's SPS Agreement’, in van Calster, G. and Prévost, D. (eds.), Research Handbook on Environment, Health and the WTO, Cheltenham: Edward Elgar, pp. 79–115.Google Scholar
Epps, T. (2014), ‘Regulatory Cooperation in Free Trade Agreements’, in Frankel, S. and Lewis, M. Kolsky (eds.), Trade Agreements at the Crossroads, Abingdon: Routledge, pp. 141–166.Google Scholar
European Commission (1995), ‘Preparation of the Associated Countries of Central and Eastern Europe for Integration into the Internal Market of the Union’ (white paper), COM(95) 163 final, 03.05.1995 and COM(95) 163 final/2, 10.05.1995.Google Scholar
European Commission (2013), ‘Trade Negotiations Step by Step’, DG Trade, September 2013, http://trade.ec.europa.eu/doclib/docs/2012/june/tradoc_149616.pdf.Google Scholar
European Commission (2014), ‘Evaluation of the EU–Turkey Customs Union’, 28 March 2014, Report No. 85830-TR, https://ec.europa.eu/neighbourhood-enlargement/sites/near/files/pdf/financial_assistance/phare/evaluation/2014/20140403-evaluation-of-the-eu-turkey-customs-union.pdf.Google Scholar
European Commission (2016), ‘The “Blue Guide” on the Implementation of EU Products Rules 2016 (Text with EEA relevance)’, Official Journal, 2016/C 272/01.Google Scholar
European Commission (2017), ‘Communication from the Commission to the European Parliament, the European Economic and Social Committee and the Committee for the Regions on Reform Recommendations for Regulation in Professional Services’, Section II.4, 10 January 2017, COM(2016) 820 final, http://eur-lex.europa.eu/legal-content/en/TXT/?uri=CELEX:52016DC0820.Google Scholar
European Council (2017), ‘Guidelines for Brexit Negotiations’, 29 April 2017, www.consilium.europa.eu/en/press/press-releases/2017/04/29-euco-brexit-guidelines/.Google Scholar
European Parliament and Council (2008), ‘Regulation No. 764/2008 Laying Down Procedures Relating to the Application of Certain National Technical Rules to Products Lawfully Marketed in Another Member State and Repealing Decision No. 3052/95/EC’, OJ L218/21, 9 July 2008.Google Scholar
GATT (1981), European Economic Community – Imports of Beef from Canada (EEC–Beef from Canada), Panel Report, adopted 10 March, BISD 28S/92.Google Scholar
Gasiorek, M., Holmes, P., and Rollo, J. (2016), ‘UK–EU Trade Relations Post Brexit: Too Many Red Lines?’, UKTPO Briefing Paper 5.Google Scholar
HM Government (2016), Speech delivered by International Trade Secretary Liam Fox to Trade Envoys at the World Trade Organization in Geneva on 1 December, www.gov.uk/government/speeches/liam-foxs-speech-to-the-world-trade-organisation.Google Scholar
HM Government (2017a), ‘The United Kingdom's Exit from and New Partnership with the European Union’ (white paper), Cm 9417, February 2017, www.gov.uk/government/uploads/system/uploads/attachment_data/file/589191/The_United_Kingdoms_exit_from_and_partnership_with_the_EU_Web.pdf.Google Scholar
HM Government (2017b), Prime Minister's Letter to Donald Tusk Triggering Article 50, 29/03/2017, Part IV, www.gov.uk/government/publications/prime-ministers-letter-to-donald-tusk-triggering-article-50/prime-ministers-letter-to-donald-tusk-triggering-article-50.Google Scholar
Holmes, P., Rollo, J., and Winters, L. A. (2016), ‘Negotiating the UK's Post-Brexit Trade Arrangements’, National Institute Economic Review, 238: R22–R30.Google Scholar
Howse, R. (2015), ‘Regulatory Cooperation, Regional Trade Agreements, and World Trade Law: Conflict or Complementarity?’, Law and Contemporary Problems, 78(4): 137–151.Google Scholar
Krueger, A. O. (1999), ‘Are Preferential Trading Arrangements Trade-Liberalizing or Protectionist?’, The Journal of Economic Perspectives, 13(4): 105–124.Google Scholar
Leave Alliance (2016), ‘Leaving the Customs Union’, Brexit Monograph 16, 30 November 2016, www.eureferendum.com/documents/BrexitMonograph016.pdf.Google Scholar
Lydgate, E., Rollo, J., J. and Wilkinson, R. (2016), ‘The UK Trade Landscape after Brexit’, UKTPO Briefing Paper 2, UK Trade Policy Observatory, University of Sussex.Google Scholar
Marchetti, J. A. and Mavroidis, P. C. (2012), ‘I Now Recognize You (And Only You) as Equal: An Anatomy of (Mutual) Recognition Agreements in the GATS’, in Lianos, I. and Odudu, O. (eds.), Regulating Trade in Services in the EU and the WTO, Cambridge: Cambridge University Press.Google Scholar
Mathis, J. H. (2006), ‘Regional Trade Agreements and Domestic Regulation: What Reach for “Other Restrictive Regulations of Commerce”?’, in Ortino, F. and Bartels, L. (eds.), Regional Trade Agreements and the WTO Legal System, Oxford: Oxford University Press, pp. 80–108.Google Scholar
Miles, T. (2017), ‘EU and Britain to Present Post-Brexit Plan on WTO Membership’, http://uk.reuters.com/article/uk-britain-eu-wto-idUKKBN1A21AB?il=0.Google Scholar
Muller, G., (2016), ‘National Treatment and the GATS: Lessons from the Jurisprudence’, Journal of World Trade, 50(5): 819-844.Google Scholar
Owen, J., Stojanovic, A., and Rutter, J. (2017), Trade after Brexit: Options for the UK's Relationship with the EU, Institute for Government, London, DecemberGoogle Scholar
Sauvé, P. and Ward, N. (2009), ‘The EC – CARIFORUM Economic Partnership Agreement: Assessing the Outcomes on Services and Investment’, ECIPE.Google Scholar
Schroder, H. Z. (2011), Harmonization, Equivalence and Mutual Recognition of Standards in WTO Law, Dordrecht, the Netherlands: Kluwer.Google Scholar
Szyszczak, E., and Lydgate, E. (2016), ‘Triggering Article 50: A Legal Analysis’, UKTPO Briefing Paper 3, UK Trade Policy Observatory, University of Sussex.Google Scholar
UK Trade Policy Observatory (UKTPO) (2016), ‘The World Trade Organisation: A Safety Net for a Post-Brexit UK Trade Policy? UKTPO Briefing Paper 1, UK Trade Policy Observatory, University of Sussex.Google Scholar
US Food and Drug Adminstration (2017), ‘Mutual Recognition Promises New Framework for Pharmaceutical Inspections for United States and European Union’, 2 March 2017, www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm544357.htm.Google Scholar
Van Norman, G. A. (2016), ‘Drugs and Devices: Comparison of European and US Approval Processes’, JACC: Basic to Translational Science, 1(5): 399–412.Google Scholar
Vienna Convention on the Law of Treaties (VCLT) (1969), Concluded at Vienna on 23 May 1969.Google Scholar
Wang, H. (2012), ‘The Interpretation of GATS Disciplines on Economic Integration: GATS Commitments as a Threshold?’, Journal of World Trade, 46(2): 397–438.Google Scholar
Winters, L. A. (2015), ‘The WTO and Regional Trading Agreements: Is It All Over for Multilateralism?’, EUI, RSCAS Working Paper No. 2015/94.Google Scholar
Woolcock, S. (2007), ‘European Union policy towards Free Trade Agreements’, ECIPE Working Paper No. 3.Google Scholar
World Economic Forum (2013), ‘Enabling Trade, Valuing Growth Opportunities’, www3.weforum.org/docs/WEF_SCT_EnablingTrade_Report_2013.pdf.Google Scholar
WTO (1999), Turkey – Restriction on Imports of Textile and Clothing Products (Turkey–Textiles), Appellate Body Report, WT/DS34/AB/R, adopted 22 October 1999.–Google Scholar
WTO (2000), Canada – Certain Measures Affecting the Automotive Industry (Canada–Autos), Panel Report, WT/DS139/R and WT/DS142/R, circulated 11 February 2000, and Appellate Body Report, WT/DS139/AB/R and WT/DS142/AB/R, adopted 31 May 2000.Google Scholar
WTO (2001), United States – Import Prohibition on Certain Shrimp and Shrimp Products (US–Shrimp), Appellate Body Report, WT/DS58/AB/R, adopted 15 June 2001.Google Scholar
WTO (2004a), European Communities – Conditions for Granting of Tariff Preferences to Developing Countries (EC–Tariff Preferences), Appellate Body Report, WT/DS246/AB/R, adopted 7 April 2004.Google Scholar
WTO (2004b), Decision on the Implementation of Article 4 of the Agreement on Sanitary and Phytosanitary Standards, Committee on Sanitary and Phytosanitary Standards, G/SPS/19/Rev.2, 23 July.Google Scholar
WTO (2010a), United States – Certain Measures Affecting Imports of Poultry from China (US–Poultry), Panel Report, WT/DS392/R, circulated 29 September.Google Scholar
WTO (2010b), Factual Presentation of the Trade Agreement Between the EFTA States and Canada, Committee on Regional Trade Agreements, WT/REG271/2, 27 August.Google Scholar
WTO (2012a), Factual Presentation of the Trade Agreement between the European Union and the Republic of Korea, Committee on Regional Trade Agreements, WT/REG296/1/Rev.1.Google Scholar
WTO (2012b), United States – Measures Affecting the Production and Sale of Clove Cigarettes (US–Clove Cigarettes), Appellate Body Report, WT/DS406/AB/R, adopted 4 April 2012.Google Scholar
WTO (2013), Committee on Regional Trade Agreements, Factual Presentation of the Trade Agreement between Peru and the European Communities (WT/REG333/1/Rev.1).Google Scholar
WTO (2014), European Communities – Measures Prohibiting the Importation and Marketing of Seal Products (EC–Seal Products), Appellate Body Report, WT/DS400/AB/R, WT/DS401/AB/R, adopted 18 June 2014.Google Scholar
WTO (2015), Peru – Additional Duty on Imports of Certain Agricultural Products (Peru–Agricultural Products), Appellate Body Report, WT/DS457/AB/R, adopted 20 July 2015.Google Scholar
WTO (2016), ‘Trade Policy Review, Report by the Secretariat: Turkey’,WT/TPR/S/331, 9 February.Google Scholar
Zell, J. A. (2016), ‘Just Between You and Me: Mutual Recognition Agreements and the Most Favoured Nation Principle’, World Trade Review, 15(1): 3–23.Google Scholar