Thread by @hhesterm

Does the NI proposal violate WTO law? Some preliminary thoughts (thread)

https://twitter.com/tconnellyRTE/status/1105794667885531137

Here’s the - very unusual - measure:

The way I read this is that it’s not just that there will not be any controls on the NI border. There will indeed not be an obligation to pay tariffs.

Now the UK will also slash tariffs, but they remain on 13% of imports.

The regime for these goods is this: enter the UK via NI, no obligation to pay tariffs. Enter the UK via any other point of entry - tariffs. (Now this might just be strange drafting in this press release, but that’s what it reads like)

What I will discuss here is a possible violation of the most-favoured nation obligation. If you want to catch up on that obligation - here’s a primer uktradeforum.net/2017/11/30/wha…

MFN basically means you have to treat goods from all other WTO members alike (except if you have an FTA or another justification).

Now you will say: but the policy treats Brazilian goods like Spanish ones like Irish ones. As long as they enter via Northern Ireland. That is true. And it means there’s no “de jure” discrimination.

There is, however, an established concept of a de facto discrimination. You create a policy that on the face of it does not discriminate, but in reality it does.

Here, what the UK does is that on border it has (entry from France, the Netherland) it imposes tariffs. Except on the Northern Irish one with Ireland. It seems at first glance obvious that Ireland will be a larger beneficiary than others.

Now mind you. I would also argue that the UK could invoke an exception. Namely Art. XXI GATT (national security) - and it would be more convincing than the US’ resort to that exception.

@Lorand_Bartels disagrees with me. He does not see an MFN issue, but he does see an issue with Art. X GATT. I leave that argument to him, of course.

@Lorand_Bartels As so often in trade, the more significant problem with the policy will be factual: what happens if you tell traders “either you pay tariffs - or you go through Northern Ireland”.