GENEVA (Reuters) – Britain signalled on Thursday that its attempt to seal terms for its post-Brexit membership of the World Trade Organization by a fast-track procedure had failed, and it must now enter negotiations which are likely to be lengthy.
This followed objections raised by a number of other WTO states, International Trade Minister Liam Fox said.
Britain is a full member of the WTO, but its terms are bound up with those of the European Union, and it needs to have an independent membership document that sets out the terms of its trade after leaving the bloc in March 2019.
Fox had tried to use a rapid “rectification” for a seamless transition, essentially copying and pasting the EU text into a new WTO agreement covering the United Kingdom. Other countries in the 164-member WTO had three months to raise objections, a deadline which passed this week.
“As expected, some trading partners have expressed reservations about our proposed treatment of Tariff Rate Quotas,” Fox said in a written statement to the British parliament, referring to trading rights granted to major agricultural exporters.
Fox did not name the objectors but he will have to switch to “modification” of the British WTO agreement, giving other countries the right to negotiate and demand concessions from London, which could take years.
British Ambassador to the WTO Julian Braithwaite said in a tweet that “a large majority” of WTO members had raised no objection.
If Britain does not satisfy its trading partners, they could launch trade disputes, which could go on for years more.
However, the process will not necessarily interfere with the implementation of Brexit, since many WTO members continue to trade under outdated agreements while they agree their new text.
Some pro-Brexit lawmakers have played down the risks of Britain leaving the EU without agreeing a deal with Brussels, saying it can trade with the outside world on WTO terms.
The EU is still in a negotiation to expand its membership deal to include Croatia, even though the country joined the bloc five years ago, and will have to carry out a similar process to take Britain off its books.
“The notification to formally invite claims in that process is now being prepared,” Fox said, adding that the aim was “to reach a mutually satisfactory conclusion that maintains the balance of rights and obligations for the UK and our trading partners”.
Seven agricultural suppliers – including the United States, Canada and Australia – had said a year ago that the proposed terms of the divorce would rob them of flexibility to switch exports between Britain and the rest of the EU.