Economics Report: Impact of No-deal Brexit on UK-EU Trade & WTO Terms

This report examines the implications of a no-deal Brexit on UK-EU trade, focusing on the role of the World Trade Organization (WTO) terms. The report begins by explaining the WTO's function in regulating international trade and then analyzes the potential consequences of the UK trading with the EU under WTO rules. It highlights that a no-deal Brexit would lead to tariffs on goods, particularly impacting sectors like automotive, food, and textiles. Furthermore, it would remove the UK from existing free trade agreements, such as those with Canada and South Korea, leading to increased tariffs on both imports and exports. The report concludes by emphasizing that trading on WTO terms represents a default position with significant trade barriers.

Running head: ECONOMICS
International Trade Law
Name of the Student:
Name of the University:
Author Note:

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Executive Summary:
The aim of report is to provide an overview of the no-deal Brexit and the meaning of
WTO in terms of UK-EU trade. The report commences with an explanation of the WTO rules
and then goes on to explain its impact on the UK- EU trade.

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Table of Contents
Introduction:....................................................................................................................................2
Meaning of WTO terms for UK-EU Trade under No-Deal Brexit.................................................2
Conclusion:......................................................................................................................................3
References:......................................................................................................................................4

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Introduction:
The report aims at providing an insight into no-deal Brexit and the meaning of the WTO
terms for UK-EU trade
Meaning of WTO terms for UK-EU Trade under No-Deal Brexit
The World Trade Organization (WTO) represents a forum where closer to 164
governments has been found to undertake negotiation of the rules of trade liberalization thus
solving the disputes amongst them1. The basis of WTO rules lay in the General Agreement on
Tariffs and Trade (GATT) initiated in the year 1947 for ensuring global security and peace.
Although it had been negotiated by close to 23 nations only eight nations applied for the
agreement on an immediate basis once it had been signed. These eight nations have been
Canada, Belgium, Australia, Luxembourg, , France, United Kingdom, Netherlands and United
States.
The No deal Brexit would imply that the legal arrangements that covered the various
aspects of the everyday life would no more apply and there would be huge change in the
relationships of trade between UK and EU2. It had been estimated that without the deal close to
90 percent of the goods of UK exported to EU might face an average tariff of 4.3 percent while
the tariff on imports from EU to UK was 5.7 percent. Some sectors especially the car, food and
agriculture and textile industry would have higher levels of tariffs.
1 S Feng and others, '. ‘Deal’Or ‘No Deal’? Impacts Of Alternative Post‐Brexit Trade Agreements On UK
Agriculture.' (2017) 16 EuroChoices,.
2 A Hantzsche, A Kara and G Young, 'The Economic Effects Of The UK Government's Proposed Brexit Deal'
(2019) 42 The World Economy.

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Besides, it would also imply that UK would no more possess the benefit of free trade
agreements with the countries like Canada and South Korea as member of EU. Hence, increasing
amount of British exports and imports would have to face tariffs. Further, it would also imply
that the UK services that is now able to access the entire single market of EU in a relatively free
state would have restricted access to EU under the UK commitments to WTO.
Conclusion:
On a concluding note, it can be said that trading solely on the WTO terms represents a
default position and no country opting for it. In spite of the fact that WTO have lowered trade
barriers, countries have been found to seek for lesser friction

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References:
Feng S and others, '. ‘Deal’Or ‘No Deal’? Impacts Of Alternative Post‐Brexit Trade Agreements
On UK Agriculture.' (2017) 16 EuroChoices,
Hantzsche A, A KaraG Young, 'The Economic Effects Of The UK Government's Proposed
Brexit Deal' (2019) 42 The World Economy