Does GATT Article 24 mean that a transitional tariff regime is permitted if the UK leaves the EU without a negotiated exit arrangement?

Article 24, paragraph 5:

Accordingly, the provisions of this Agreement shall not prevent, as between the territories of contracting parties, the formation of… a free-trade area or the adoption of an interim agreement necessary for the formation of… a free-trade area; Provided that:…

Does that mean that in the event of no Withdrawal Agreement being reached before March 29th, the intention to deliver an FTA with the EU is sufficient to maintain the status quo tariff regime in the interim?

  • 2
    What do you mean by "sufficient"? The usual meaning is that you do not need anything else to that effect, yet it is obvious that to maintain the status quo you need the agreement of both parties (the EU and the UK).
    – SJuan76
    Jan 22 '19 at 17:50
  • 2
    From my reading, this has nothing to do with Brexit. It just says what is permissible in negotiating a free trade area. It could apply to Brexit, but only after a mutually agreed upon free trade area. The UK is no way ready for that IMMEDIATELY following Brexit. I also believe that it is not permitted to negotiate new Free Trade agreements with other countries until a country has exited the EU.
    – Karlomanio
    Jan 22 '19 at 17:59
  • 1
    @SJuan76 I guess I was asking whether this article could be used to permit a tariff regime transition without a Withdrawal Agreement. You suggest it could not be unilateral: that may be true. But a bilateral statement of intent to sign an FTA might be enough to mean the article applies?
    – 52d6c6af
    Jan 22 '19 at 18:03
  • 3
    Currently there are no tariffs between the UK and the rest of the EU, due to the customs union. The EU position has consistently implied that continuing in that state would require UK regulations to shadow EU ones indefinitely until another agreement is made. Which is effectively the "unacceptable" backstop arrangement.
    – origimbo
    Jan 22 '19 at 21:53
  • 3
    The question is almost meaningless, it stems from the same kind of reasoning implying that no-deal wouldn't be so bad because surely the EU and UK wouldn't just let planes not fly, etc. therefore there would be some deal. The terms of the GATT would perhaps allow for some interim agreement to replace the customs union and bridge the time between leaving the customs union and a future FTA but that still requires an agreement with the EU. And don't forget that other GATT/WTO members might also object.
    – Relaxed
    Jan 22 '19 at 22:14

The Uk Trade Forum has an article on this question. It argues that such an agreement is possible, but it names three hurdles (I directly quote those below):

  1. The UK would have to reach agreement with the EU. The UK could not do this unilaterally. So this isn’t exactly “no deal”.
  2. That agreement would have to include a plan and timetable for achieving the final agreement. And it would have to have a sufficient amount of detail, including what the final agreement would look like, because …
  3. … the WTO membership could demand changes, if they weren’t convinced that the plan could be achieved within about 10 years. The UK and EU would have to accept those changes or scrap the agreement. (This doesn’t apply to free trade agreements that are not interim.)

Plain-link attribution: https://uktradeforum.net/2019/01/26/why-claims-about-a-wto-article-24-interim-agreement-are-a-red-herring/

To answer your question:

Does that mean that in the event of no Withdrawal Agreement being reached before March 29th, the intention to deliver an FTA with the EU is sufficient to maintain the status quo tariff regime in the interim?

Yes, provided the points above are satisfied. The House of Commons Library also has a page on this issue. To add to the points above, based on the HoC Library page, the GATT article only deals with goods:

Moreover, GATT Article XXIV only applies to forming a customs union or a free trade area for goods. In talks of a future UK-EU relationship many other aspects of trade have to be settled such as the level of regulatory alignment, mutual recognition of standards, and crucially, trade in services, for which the equivalent to GATT Article XXIV is GATS Article V.

Plain-link attribution: https://commonslibrary.parliament.uk/brexit/no-deal-brexit-and-wto-article-24-explained/


The members in this case are those whom have signed the GATT agreement (last amended 1994). Some of those amendments seem to be directly aimed at the treatment of those outside the union.

In principle it is to reduce friction and issues caused by expanding trade blocks and prevent some of the negative consequences of members that have signed up to this agreement. Which does appear to include the EU.

GATT was orgininally formed in 1947 but following significant amendments in 1980 and in 1994 following the expansion of the EU and similar entities. So the agreement would be bi lateral between the 128 countries that have signed it. Including EU members. A free trade agreement being an overlay to WTO terms. The WTO came into being in 1995 and adopted the GATT membership. GATT members were known as signatories, they are now called WTO members. So the agreement is in force and its terms could be said to be bi lateral as they have been defined and agreed to by the members. Indeed, the 1994 amendment actually clarifies the effect of trade blocks on neighbouring territories and how it should be managed in even clearer terms. Article 24 in its entirety deals with this subject but needed an update in 1994, before the creation of the WTO in order to deal with the spread of protectionist and potentially, destructive trade practices on the rest of the world. It even goes so far as to provide independant means and processes by which tariffs can be set if necessary and ensuring that the recomendation of the working party providing such support must be recognised. See the 1994 amendment and section 4 in particular.

It is not a silver bullet but it does provide for a managed exit under non punitive measures with a defined and reasonable process, if necessary, overseen by a third party acting independantly and with the aim of fascilitating as little friction as possible between the trade block and its neighbouring territory. Fascilitating trade and reducing barriers to trade is the mission of the WTO. Which is why WTO articles are quite sensible and flexible. They also usually have a means of exemption in some cases in exceptional circumstances. This happens in various countries.

This could be a very useful piece of legislation in plotting a sensible way forward. It is well positioned to prevent the sort of thing we are presented with as inevitable, yet it does not quite go all the way there. In any negotiation or legal wrangling, the will of the parties involved still matters. However, it does seem to offer a more positive way forward.

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .