World Trade Organization concern for UK trade
It could take the UK “many years” to establish fresh trade deals with fellow members of the World Trade Organization (WTO) once it has left the EU, the chief economist of the Geneva-based body said.
Now inside the WTO as one of the EU’s 28 nations, leaving the bloc will require the UK to submit its own schedule of tariffs for the approval of trade partners, all of whom must agree to them.
At that point, any of the other WTO members can flag issues, forcing the UK into a series of talks that could take years to resolve, said Robert Koopman.
“My sense is they are there to negotiate and are likely to find some things to negotiate,” Mr Koopman told a conference in London yesterday.
“It could take a long time.”
The economist noted that it takes about five or six years to strike trade deals. In the meantime, the UK would be exposed to an average WTO levy of 5.3% and more than double that amount for some items including cars, clothes, and spirits.
“Every WTO member is going to be able to look and say it does affect me,” said Mr Koopman.
“Members are looking out for their interests.”
The UK is planning to use its international aid budget to curry favour among developing countries it hopes will assist them in any trade talks, Bloomberg reported last week.
British trade secretary Liam Fox said last month he would not let slow progress in talks at the WTO hold back his global trade agenda.
Former deputy prime minister Nick Clegg yesterday said the risk of higher tariffs was a reason to stay inside the single market despite signals from the government it is willing to go it alone.
The UK dropped out of businesses’ top five locations for investments for the first time in seven years as fears about the country’s plans to exit the EU added complexity to international deals, consultants Ernst & Young said in a survey of executives.
British businesses rank behind investments in the US, China, Germany, Canada, and France, which make up the top destinations for deals activity, EY said in its Global Capital Confidence Barometer report yesterday, which is based on a survey of more than 1,700 executives in 45 countries in August and September.
Business leaders are concerned about geopolitical issues, such as the rise of nationalist governments worldwide and currency fluctuations, that make cross-border mergers and acquisitions more difficult, EY said.
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