By Alyn Smith, SNP Member of the European Parliament for Scotland
IT would be easy to be distracted by the stramash at Westminster but it is worth the odd glance at events in Geneva to realise that the breathless drama in London might well be entirely pointless. After all it is in the sleepy Swiss city, not London, that the Brexiters have promised Britannia will once again launch herself as a totally independent and glorious trading state.
Sadly, a bit like everything else to do with Brexit, it is demonstrably not going to plan. This matters because the Brexiters’ Plan B (“We’ll just revert to WTO terms”) is as unfit for purpose as their Plan A.
A few months back the EU and UK each filed documents in Geneva outlining the terms on which they propose to trade with the rest of the world, assuming the UK leaves the EU. This matters because although the UK will indeed be a member of the World Trade Organisation (WTO) automatically, the terms and conditions of that membership still need to be worked out given that for decades the UK Schedule has been incorporated within the EU Schedule. No member can begin to negotiate trade deals until it has clarity over what it actually has to trade, as written down in its independent Schedule.
The EU also needs to update its Schedule once the UK has left and has decided to renegotiate with the WTO’s 136 other countries directly. All of these countries will have their own agenda and this will take time but it is a tried and tested method the EU negotiators are well used to. The EU is also not in a rush, given its Schedule continues until replaced by the new agreed one.
Conversely, the UK is in an almighty hurry and has decided to do it differently. It will use a 1980 procedure known as a “technical rectification” to create its Schedule. The risk in using this method is that it can be challenged by any, or all, of the other WTO members for any reason.
Guess what? In a staggering development foreseen by literally everybody except Liam Fox, at the end of October countries began to challenge. Russia was first, saying that the UK proposals do not match its obligations. Specifically they complain that since the EU’s Schedule is still being negotiated from the 2013 accession of Croatia (an indication of how long these processes last) it is not possible to know how the Schedule should be rectified to produce the UK’s.
Russia is not alone and it is reported that a further 19 countries have already informally raised objections.
This escalated just last week when tiny insignificant economies like Argentina, Australia, Brazil, Canada, China, Mexico, New Zealand, Paraguay, Taiwan, Thailand, the US and Uruguay joined the fun. They signed a joint document demanding the establishment of a mechanism to provide “appropriate compensation” to ensure they do not end up worse off from the establishment of the UK’s schedules.
Is this the real crisis in Brexit? Yes it is. The WTO is the arbiter of international trade and the UK is not on the starting grid. Instead of doing the work, Dr Fox tried to find a quick fix and it has failed, and until it is resolved the legendary magical trade deals he and the rest have promised – surely, the only real win from Brexit – can’t even start. All the sound and fury signifies nothing.
Trade is about interests not sentiment, and nobody is going to give us something for nothing. As I have said before: if you didn’t like Brussels, just wait till you meet Geneva.
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