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I thought/hoped it would die away, but it's become headline news—the favourite to be UK PM wants to use it …
So here are answers to frequently & rarely asked questions about GATT Art24.
1. General
2. With-deal leavers
3. No-deal leavers
4. Remainers/revokers *SURPRISE*
1 /21
So here are answers to frequently & rarely asked questions about GATT Art24.
1. General
2. With-deal leavers
3. No-deal leavers
4. Remainers/revokers *SURPRISE*
1 /21
1. IN GENERAL
a. DOES GATT COVER SERVICES?
No. GATT only deals with trade in goods.
If you only talk about GATT Art24, you are excluding any agreement in services.
The equivalent is GATS Art 5
wto.org/english/docs_e…
2 /21
a. DOES GATT COVER SERVICES?
No. GATT only deals with trade in goods.
If you only talk about GATT Art24, you are excluding any agreement in services.
The equivalent is GATS Art 5
wto.org/english/docs_e…
2 /21
b. START WITH GATT ART1 (some do, many don’t) — non-discrimination between trading partners.
If UK allows imports duty-free from EU, it must do the same “immediately” for all other WTO members, except …
(“contracting parties” now = WTO members)
3 /21
wto.org/english/docs_e…
If UK allows imports duty-free from EU, it must do the same “immediately” for all other WTO members, except …
(“contracting parties” now = WTO members)
3 /21
wto.org/english/docs_e…
GATT Art.24 is an exception to Art.1.
Countries can have free trade agreements (FTAs) in goods, or customs unions (CUs), without applying the free trade to other WTO members. They can discriminate. But the FTA/CU must comply with Art.24
4 /21
wto.org/english/res_e/…
Countries can have free trade agreements (FTAs) in goods, or customs unions (CUs), without applying the free trade to other WTO members. They can discriminate. But the FTA/CU must comply with Art.24
4 /21
wto.org/english/res_e/…
So, saying “We want to use GATT Art.24” = “We want a deal in goods that complies with WTO rules”
Any deal: short/long term, 1–10,000 pages, EU customs union, EEA, EU-Japan, USMCA, Withdrawal Agreement, Backstop—anything.
It MUST be an agreement.
5 /21
tradebetablog.wordpress.com/2019/02/16/one…
Any deal: short/long term, 1–10,000 pages, EU customs union, EEA, EU-Japan, USMCA, Withdrawal Agreement, Backstop—anything.
It MUST be an agreement.
5 /21
tradebetablog.wordpress.com/2019/02/16/one…
2. FOR “WITH-DEAL” LEAVERS
Brexit with a UK-EU trade deal in goods means complying with GATT Art24, whatever the model: EEA, Norway, Switzerland, customs union, Canada +++.
Even the Withdrawal Agreement comes under Art24: it has a customs union.
6 /21
ec.europa.eu/commission/sit…
Brexit with a UK-EU trade deal in goods means complying with GATT Art24, whatever the model: EEA, Norway, Switzerland, customs union, Canada +++.
Even the Withdrawal Agreement comes under Art24: it has a customs union.
6 /21
ec.europa.eu/commission/sit…
How about “scrap the Withdrawal Agreement”, leave with no deal but with a “standstill” invoking Art24 as “interim”, then negotiate a new deal?
Doesn’t work. No deal? —> Art24 doesn’t apply —> GATT Art1 kicks in (MFN, 3 /21 above) —> no standstill
7 /21
Doesn’t work. No deal? —> Art24 doesn’t apply —> GATT Art1 kicks in (MFN, 3 /21 above) —> no standstill
7 /21
You can only have an “interim” agreement if you have an agreement.
That means the EU has to agree too. The EU has said it won’t.
Perhaps it’s bluffing. Perhaps not.
8 /21
That means the EU has to agree too. The EU has said it won’t.
Perhaps it’s bluffing. Perhaps not.
8 /21
Remember the UK and EU have already agreed a short term “standstill”. It’s the transition in the Withdrawal Agreement (6/21 above).
And then: the condition it had set for extending Brexit to October 31 said “no renegotiation”. H/T @Takru5
9 /21
And then: the condition it had set for extending Brexit to October 31 said “no renegotiation”. H/T @Takru5
9 /21
That means negotiating a different standstill under GATT Art24 (interim or otherwise) may not be possible until after Oct 31.
How long will it take to reach a new agreement with the EU, just for a standstill while longer term talks start?
10 /21
How long will it take to reach a new agreement with the EU, just for a standstill while longer term talks start?
10 /21
Note that any talks AFTER Brexit on October 31 are no longer under Article 50, which means EU individual member states’ national and regional parliaments have a say. It will be a more fragmented process.
11 /21
11 /21
Before I move on: “interim” is often misunderstood.
An agreement with phased-in tariff cuts or staged implementation is NOT automatically an “interim” agreement as claimed, eg by @lawyers4britain
12 /21
An agreement with phased-in tariff cuts or staged implementation is NOT automatically an “interim” agreement as claimed, eg by @lawyers4britain
12 /21
The EU-S.Korea free trade agreement is implemented over 20 years (double the 10 years normally set for “interim” deals under Art24) with various parts phased in over different periods.
It was NOT notified as “interim” … (more)
13 /21
rtais.wto.org/UI/CRShowRTAID…
It was NOT notified as “interim” … (more)
13 /21
rtais.wto.org/UI/CRShowRTAID…
… (continued) and the minutes of the meeting of the WTO Regional Trade Agreements Committee show that at no stage did “interim” crop up (unlike on some other agreements).
This is the committee of all WTO members overseeing free trade agreements.
14 /21
docs.wto.org/dol2fe/Pages/S…
This is the committee of all WTO members overseeing free trade agreements.
14 /21
docs.wto.org/dol2fe/Pages/S…
Interim agreements are also cumbersome and none have been notified recently even though they have phased-in provisions (such as the EU-S.Korea FTA).
15 /21
tradebetablog.wordpress.com/2019/05/31/bre…
15 /21
tradebetablog.wordpress.com/2019/05/31/bre…
Interim agreement cannot simply show the intention to negotiate a final agreement. They are agreements in their own right even if they lead to a more complete final version.
16 /21
tradebetablog.wordpress.com/2018/12/27/myt…
16 /21
tradebetablog.wordpress.com/2018/12/27/myt…
3. FOR “NO-DEAL” LEAVERS
Should Leavers who content to leave with no deal be interested in GATT Art24?
— YES, if they want trade deals with any other WTO member or group, US, China, Japan, CPTPP
— NO, if they don’t want trade deals with anyone.
17 /21
Should Leavers who content to leave with no deal be interested in GATT Art24?
— YES, if they want trade deals with any other WTO member or group, US, China, Japan, CPTPP
— NO, if they don’t want trade deals with anyone.
17 /21
4. REMAINERS/REVOKERS
This may come as a surprise, but Remain or Revoke Art50 also involves GATT Art24.
“We want to use Art24”
“Really? You mean the one we already use? Fab!”
18 /21
rtais.wto.org/UI/PublicShowR…
This may come as a surprise, but Remain or Revoke Art50 also involves GATT Art24.
“We want to use Art24”
“Really? You mean the one we already use? Fab!”
18 /21
rtais.wto.org/UI/PublicShowR…
AFTER ALL THAT.
GATT Art24 is really not worth mentioning at all.
Unless the UK and EU intend to violate WTO rules.
All it says is the UK and EU are going to have a free trade agreement in goods.
Much more important is to FOCUS ON THE CONTENT
19 /21
GATT Art24 is really not worth mentioning at all.
Unless the UK and EU intend to violate WTO rules.
All it says is the UK and EU are going to have a free trade agreement in goods.
Much more important is to FOCUS ON THE CONTENT
19 /21
So forget Art24. Ask instead:
— What kind of agreement?
— What would the UK and EU demand of each other in order to reach agreement?
— How long would it take?
— What happens in the meantime?
— Why only goods? Why not services?
20 /21
— What kind of agreement?
— What would the UK and EU demand of each other in order to reach agreement?
— How long would it take?
— What happens in the meantime?
— Why only goods? Why not services?
20 /21
P.S. I hate Comic Sans
21/21 ends
21/21 ends
And here's an explainer. Well, as simple as I can do it:
tradebetablog.wordpress.com/2019/06/24/beg…
tradebetablog.wordpress.com/2019/06/24/beg…
