In the event of Britain leaving the European Union without a trade deal in place, World
Trade Organization (WTO) rules would automatically apply to UK transactions with the EU,
plus any other country which has a free trade deal with Europe.
But does this mean higher tariffs and time consuming border checks after Brexit?
Each of the WTO’s 164 member countries has schedules (taxes on imports and limits on
quantities) that they apply when trading. EU tariffs are usually lower than WTO charges, but
under the rules the UK couldn’t reduce these for trade with Europe or any other WTO
member – the rates would be the same for trade with all countries.
It’s obviously a very important issue as currently, almost half of the UK’s exports are sent to
These WTO rules already apply to trade between any of the EU member states (including
the UK, until 29 March 2019) and a country with which there is no free trade agreement,
such as the USA, Brazil, China and Australia. However, these larger countries have additional
bilateral agreements to cover trading with the EU on specific goods and services.
In terms of product standards and safety regulations, there are currently no EU border
checks on UK products – but it’s not yet clear whether this would change in the event of a “no deal” Brexit?
There’s obviously quite a way to go until we know whether Britain will secure a trade deal
with the EU before the formal separation – however initial details of the withdrawal treaty
are due to be announced at the EU Summit in October, and we’ll be sure to keep you
updated with all significant developments.
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