Hot answers tagged

12

It's right there in the article you've linked, but it is reading between the lines a bit. The EU are not threatening retaliatory tariffs in a tit-for-tat manner. They are talking about how the EU will respond following the Boeing ruling which is expected next year. Meanwhile, the two sides are waiting for the WTO to decide on what tariffs the EU can impose ...


10

WTO is not a political institution, while the sanctions were imposed for political reasons; WTO does not act by itself, it requires a dispute raised and reviewed by WTO’s dispute settlement mechanism (DSM). There were no dispute raised; WTO DSM can handle only the discriminatory use of WTO instruments and norms; the sanctions were not imposed with the use of ...


10

One way to try to answer this is to look at the benefits of the WTO. The main two are Most Favored Nation and National Treatment: Most Favored Nation basically says that if you lower a trade barrier for one nation you have to do the same for the others. National Treatment basically means that you can't discriminate between locally produced goods and foreign ...


10

What Jontia says is correct. Here's a better explainer from Reuters (of yesterday): Who won? By many accounts, the lawyers and multiple expert witnesses. Costs of the cases are estimated to top $100 million. In the cases themselves, both sides have won partial WTO rulings but nobody can agree which side came out on top. Each has said its own subsidies were ...


8

You are correct that to trade under WTO rules, the UK needs to do something, namely issue a schedule of the tariffs and quotas it will import goods under (It doesn't need to become a member, since it already was one, a new nation probably would not be, and would also have to sign up to the WTO agreements). A draft schedule was submitted to the WTO for ...


8

Back in 2016 the director-general of WTO said: Britain is a member of the WTO and will continue to be a member of the WTO. But it will be a member with no country-specific commitments. We have had no other situation like that. Regarding schedules, apparently temp-schedules might be possible: The Institute for Government (IFG) has argued that the UK could ...


8

Donald Trump believes that multilateral organizations block better bilateral agreements. So from his perspective, he can negotiate a better deal with China directly than through the World Trade Organization. History has shown that the US is more likely to lose a trade dispute in the WTO than win one. See What's Trump's frustration with the WTO? Beyond ...


7

EU drafted a plan for a hundred billion-dollar fund to take on US tech firms, or so the reports say. I was wondering if that plan is against WTO rules as I have heard that state subsidies are illegal under the WTO. It's a lot more nuanced than that. It's perfectly reasonable to provide tech-infrastructure and stimulate training (e.g. by subsidising research ...


6

This is quite speculative as this is the first I'm reading of such a possibility, but I would imagine that there are 2 encompassing reasons: A lot of the parties involved want to use the Ireland border issue as a faux negotiating position. While very few would vocally come out and say that the EU border can be used as leverage in a negotiation, implicitly ...


6

WTO rules require countries to charge everyone the same tariff, so any trade operating under WTO rules must abide by that. If checks were only done at Calais/Dunkirk but not along the Irish border, trade between the EU and UK would be governed by WTO rules but tariffs would not be levied on all goods traded (i.e. the ones crossing the Irish land border). ...


6

Kevin Dowd has seriously argued for it (UFT = unilateral free trade) in his IEA booklet on post-Brexit trade strategy, although simultaneously he also argues for trade deals (for UK's exports) in this work of his: This paper proposes a future UK trade policy based on free-trade principles. The guiding consideration should be to promote the UK national ...


6

https://uktradeforum.net/2017/11/30/what-is-the-most-favoured-nation-clause/ That is correct, the UK will have the same terms that any other non-EU country1. Member of the World Trade Organization grant the tariffs of MFNs to the other members of the WTO. The UK is a member of the WTO independently of the EU2. But... That also means that the EU cannot ...


6

A subsidy, in and of itself, is not contrary to WTO rules. Where it would become contrary to WTO rules is if it is designed to interfere with another country's domestic market. Examples of this, according to the US Department of Commerce, would include a subsidy that: impedes or displaces another country's exports into the market of the subsidizing country;...


5

WTO rules are much less favourable than the deal that the UK currently has with the EU. There would be mandatory tariffs in both directions, forcing up prices. The UK would lose things like EU certifications for aircraft and vehicles too. WTO rules are designed to be a minimum level on which countries trade, only used in the absence of better deals. There ...


5

No. The WTO as an organisation doesn't make decisions. Countries do not delegate decision making power to the WTO as an organisation, a 'forum' is a pretty good description, if one is only talking about trade negotiations. The WTO has more power than just a forum, however, when it comes to arbitrating existing agreements. The WTO describes itself as a: &...


5

There are at least five well-known cases: The most obvious one is if authorised by the WTO itself following dispute resolution. (Article 22 of DSU.) Since the WTO doesn't have a way enforce its dispute resolution decisions by itself, if (following dispute resolution) a country whose measures are judged in violation of WTO rules doesn't abide the WTO ...


5

The UK government would be entitled to take these tariffs, but they are not obligated to take them. The customs checks on imported goods are the prerogative of the importing country. If the importing country decides that it doesn't want all that money, then that's their problem. However, the EU would be able to enforce tariffs and import restrictions for ...


5

The question as posed is probably none. Small highly trade dependent nations, such as oil rich Brunei, or Kuwait will be trading oil, and oil will provide a large amount of GDP. However WTO doesn't have much to do with the energy trade, there are other agreements that cover oil trade. Dijbouti has few resources and much of their business is in invisibles (...


4

Trade could certainly continue under the basic WTO rules. It wouldn't continue under the free trade rules of the single market. Quoting from a WTO webpage explaining the concept of "most-favoured-nation": Some exceptions are allowed. For example, countries can set up a free trade agreement that applies only to goods traded within the group — ...


4

WTO rules are WTO rules and trade rules within EU are trade rules within the EU. UK is a member of WTO so a no-deal Brexit would probably mean they would have to rely on the basic set of WTO rules. Now, what does it mean for the UK? EU currently uses WTO rules to trade with 3rd party countries like Australia or US... But they aren't trading with these ...


4

Part of the confusion is because there exists a split between goods and services. The UK has a very large services sector, especially financial services in London. Goods on the other hand are imported far more than they're exported. WTO trade rules predominantly cover goods, not services. The EU on the other hand also has a Single Market for services. So ...


4

As far as I can tell: no, there's no such notion of default tariffs. So they don't default to zero... or to any figure. There's one 2016 comment by its director-general obliquely answering this: Britain is a member of the WTO and will continue to be a member of the WTO. But it will be [because of Brexit] a member with no country-specific commitments. We ...


4

First some quick background. The US has been blocking appointments to the Appellate Body (AB), a body of 7 judges of which 3 serve on a given case. There are currently only 3 members, 2 of whom have their terms expire December 10th, which will leave the body non-functional. Judges are nominated by the Dispute Settlement Body (DSB) whose composition is all ...


4

Essentially it boils down to other countries objecting to this arrangement. It seems likely that they would object. In fact, even the EU would probably object since it's effectively an open border from their point of view, which is what they are trying to avoid with the backstop. This wouldn't really solve anything. The issue is that the UK would not be ...


3

Based on a 2010 paper by Anders Aaslund entitled Why Doesn’t Russia Join the WTO?, the main reasons were political and internal to Russia. He unfortunately doesn't provide a summary anywhere in his paper, but from a cursory read: Officials were slow to decide it was important from the outset. (At least) 4 internal interest groups were lobbying against it. ...


3

It's because it wouldn't be clean at all - it would leave a lot of messy unresolved issues to be dealt with in an ad-hoc way. As I explained in this answer, the withdrawal agreement covers: The rights of EU and UK citizens in the UK and EU. The transition period. The treatment of goods in transit on the last day of the transition (they can be exempted from ...


3

Trading on WTO rules has one really important implication from which every other problem stems: You have to treat everyone the same. All countries you trade with on WTO terms have to be treated equally. Same tariffs, same customs checks. That would mean that the UK faces a choice: either apply tariffs and border checks to trade with the EU, or don't have ...


3

You appear to be close to answering your own question here. Certification is a step in a bureaucratic process, mandated by international agreement, in which the Director General sends round a second copy of a draft schedule submitted by a member of the WTO, saying "right chaps, it's 3 months since I sent out the last copy of this one, and none of you have ...


3

The negotiation rules for such modifications are fairly complex. In order to avoid unnecessary consultations the GATT has roughly a 2-layer negotiation process, followed by a largely formal certification procedure. Three designations are given to countries involved in these: Initial Negotiating Rights (INRs); these are mostly statutorily granted by the ...


Only top voted, non community-wiki answers of a minimum length are eligible