What is the World Trade Organisation (WTO) model of Brexit?

World Trade Organization (WTO) in Geneva on Brexit
The WTO headquarters in Geneva

If the UK leaves the EU on 31 October 2019 without an agreed trade deal, businesses that export from the UK or import into the UK will have to operate under World Trade Organization (WTO) rules. Anna Tobin explains what this means

What is the WTO?

The WTO is the global body that agrees and negotiates the rules of trade between nations. WTO agreements have been signed by most of the world’s trading nations and ratified in their parliaments. Currently, the EU negotiates trade agreements on behalf of all its 28 members.  Under a ‘no deal’ scenario after Brexit, the UK will revert to negotiating on its own.

How does Brexit change the UK’s membership of WTO?

As well as being part of the EU WTO decision-making team, the 28 member states of the EU are all WTO members in their own right. Following Brexit, the UK won’t need to reapply to join the WTO, as we’re already an individual member. The key difference is that once the UK leaves the EU, we will no longer be negotiating with the WTO as part of larger group of EU members, but as a single member.

How will the UK’s dealings with the WTO change in the event of a ‘no deal’ Brexit?

WTO rules state that each member must grant the same ‘most favoured nation’ (MFN) market access to all other WTO members. This means that exports from the UK to the EU would be subject to the same customs checks, tariffs and regulations that the UK and EU currently charge on trade with countries such as the US.  The UK’s exports to other WTO members would also be subject to the importing countries’ most favoured nation tariffs.