European Council authorises opening of negotiations with WTO members on Brexit-related adjustments

In preparation for the UK’s withdrawal from the EU, the European Council today (June, 26) authorised the Commission to open formal negotiations within the World Trade Organisation (WTO) on how to divide up existing EU tariff rate quotas (TRQs) between the EU27 and the UK.

After Brexit, the EU will continue to apply its scheduled commitments for goods, but its existing quantitative commitments, in particular the TRQs for agricultural, fish and industrial products, will require adjustments to take into account the fact that the EU’s WTO schedule will no longer be applicable to the UK.

In October 2017, the EU and the UK informed WTO members in a joint letter of their approach for apportioning the existing EU tariff quotas and began informal talks with partners. The proposed approach would provide for an apportionment based on an objective methodology reflecting existing levels of market access and trade flows under each TRQ.

Negotiations with WTO members

In line with the provisions for modifying concessions of the General Agreement on Tariffs and Trade 1994 (GATT 1994), the EU needs to conduct negotiations on the apportionment of the TRQs with relevant WTO members.

In addition, the UK needs to launch the procedures in the WTO for setting out its own schedule of concessions and commitments before the date on which it ceases to be an EU member state.

These negotiations need to be conducted within a tight timeframe. It is foreseen that the UK will cease to be an EU member state from 30 March 2019, although the withdrawal agreement currently being negotiated is expected to provide for transitional arrangements. These arrangements would provide for international agreements to which the EU is party, such as the GATT 1994, to apply to the UK until 31 December 2020.

EU internal process

In order to take account of a situation where agreements with relevant WTO Members have not been concluded in time, the Commission has also proposed a legislative act which would allow the EU to proceed unilaterally with the apportionment of the TRQs and to amend the relevant EU provisions accordingly. This legislative proposal will follow the ordinary legislative procedure.

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