TWN Info Service on WTO and Trade Issues (Feb20/08)
19 February 2020
Third World Network

UK notifies WTO of withdrawal from EU and its implications
Published in SUNS #9061 dated 5 February 2020 

Geneva, 4 Feb (Kanaga Raja) -- The United Kingdom has notified the members of the World Trade Organisation that it has ceased to be a member state of the European Union at 23.00 GMT on 31 January 2020.

In an official communication dated 1 February and sent to WTO members on 3 February, the United Kingdom also informed that the time-limited transition period during which EU law will apply to the United Kingdom will end on 31 December 2020 and that the United Kingdom will not be seeking an extension.

In its communication to the WTO (WT/GC/206), the United Kingdom said that it has been, and will continue to be, a Member of the World Trade Organization and will represent its interests and uphold its obligations on that basis from that date.

The communication noted that the European Union and United Kingdom have agreed a Withdrawal Agreement pursuant to Article 50 of the Treaty on European Union, which provides for a time-limited transition period during which European Union law, as modified by the Withdrawal Agreement, will apply to and in the United Kingdom.

The transition period will end at 23.00 GMT on 31 December 2020, and the United Kingdom has made clear that it will not seek an extension, said the United Kingdom's communication.

The transition period provides continuity in the trading relationship between the United Kingdom and the European Union, and with other WTO Members, with the United Kingdom remaining part of the European Union's customs union and single market during that time, it explained.

The Withdrawal Agreement also provides that, for the duration of the transition period, the United Kingdom is treated as a Member State of the European Union for the purpose of international agreements entered into by the European Union.

The United Kingdom will continue to apply the European Union's Generalised Scheme of Preferences for the duration of the transition period and the provisions of the European Union's regional trade agreements will continue to apply to trade with the United Kingdom during this time.

The communication by the United Kingdom to the WTO goes on to outline some of the implications of its exit from the European Union in the WTO.

PREPARATIONS FOR EXIT

The United Kingdom noted that it was a founding party to the GATT 1947, and is an original Member of the WTO, in its own right.

However, as a Member State of the European Union, the United Kingdom's concessions and commitments on goods and concessions and specific commitments in services were contained within the schedule of concessions and commitments for goods and schedule of concessions and specific commitments in services of the European Union.

On 24 July 2018, the United Kingdom's draft schedule of concessions and commitments for goods, draft Schedule XIX - United Kingdom, was circulated for certification in document G/MA/TAR/RS/570 under the Procedures for Modification and Rectification of Schedules of Tariff Concessions.

The United Kingdom said it is continuing productive discussions with certain Members about aspects of that schedule.

As part of that process, the United Kingdom has initiated a process under GATT Article XXVIII with respect to tariff rate quotas and is currently taking forward negotiations and consultations with relevant Members.

The United Kingdom said that on 3 December 2018, its schedule of concessions and specific commitments in services and the United Kingdom's list of GATS Article II (MFN) exemptions was circulated for certification in document S/C/W/380 and S/C/W/381 under the relevant procedures.

The period for objections to the certification of that schedule and list of GATS Article II (MFN) exemptions expired on 17 January 2019.

The United Kingdom said that it continues to consult with one Member under these procedures.

The United Kingdom also said that during the transition period, it will continue to be covered by the schedule of concessions and commitments on goods and the schedule of concessions and specific commitments in services of the European Union.

The United Kingdom's GATS Article II exemptions will continue to be listed in the Article II (MFN) exemptions of the European Communities and their Member States (GATS/EL/31), it added.

The United Kingdom said that there are also a small number of other agreements, negotiated since the Marrakesh Agreement establishing the World Trade Organization, in which the United Kingdom has participated as a Member State of the European Union, but to which the United Kingdom was not party in its own right.

These are: the Government Procurement Agreement (the "GPA"), the Protocol Amending the Marrakesh Agreement (the "Trade Facilitation Agreement"), the Protocol Amending the TRIPS Agreement (the "TRIPS Amendment"), the 2015 Protocol to the Agreement on Trade in Civil Aircraft, the Ministerial Declaration on Trade in Information Technology Products ("ITA I") and the Ministerial Declaration on the Expansion of Trade in Information Technology Products ("ITA II").

For the duration of the transition period, the United Kingdom is treated as a Member State of the European Union for the purpose of these agreements and arrangements, it explained.

Upon the expiry of the transition period, the United Kingdom said that it will confirm its continued acceptance of these agreements and arrangements.

With regard to the GPA, the United Kingdom noted that the Committee on Government Procurement agreed, by means of a Decision adopted on 27 February 2019, as reaffirmed by the Decision adopted on 26 June 2019, that the United Kingdom shall continue to be covered by the GPA until the expiration of the transition period between the United Kingdom and the European Union.

The United Kingdom said it looks forward to complying with the obligations under those Decisions in relation to assuming independent Membership of the GPA at the end of the transition period.

Consistent with the principles of the Withdrawal Agreement, for the duration of the transition period, the United Kingdom will also continue to be treated as a Member State of the European Union for the purpose of ongoing WTO disputes to which the European Union is a party, it added.

ENGAGEMENT WITH WTO

The United Kingdom said that it has always been a strong supporter of the multilateral trading system.

In recent years, it has played an active role in support of the system as a Member State of the European Union, including supporting the Trade Facilitation Agreement, the Ministerial Declaration on the Expansion of Trade in Information Technology Products (ITA II), the Ministerial Decision of 19 December 2015 on Export Competition, the launch of critical mass initiatives at the Ninth, Tenth and Eleventh Ministerial Conferences respectively, and as an active aid for trade partner.

In 2020, the United Kingdom said, it will work to support efforts to strengthen the multilateral rules-based trading system, and to modernise the WTO.

That will include contributing to a substantive and meaningful set of outcomes at the Twelfth Ministerial Conference in Nur-Sultan and working to restore the full functioning of the dispute settlement system.

More widely, the United Kingdom will seek to participate in and initiate discussions in the WTO on issues of particular relevance to the United Kingdom and the global economy today, not least in advance of the United Kingdom's Presidency of the G7 in 2021, it said.

The United Kingdom said it has also long been a strong believer in the role of the multilateral trading system to unlock growth, reduce poverty and open markets, and a champion for developing countries in the WTO through its aid-for-trade portfolio.

The United Kingdom looks forward to continuing to partner with developing country Members to strengthen their engagement at the WTO and increase their integration into world trade.