Relying on the World Trade Organisation for our trade was always a terrible idea. Now that the US president has ripped a hole in it, it’s economic suicide.
At midnight tonight, the WTO’s system for resolving disputes will cease to operate. Angered by what he says is a trading system that favours China, Donald Trump has blocked the appointment of new judges to sit on the appeals body. There is now only one judge left and so the court can’t operate.
Without an effective appeal body, we are looking at a world of dog eats dog in international trade. That makes it all the more crackpot for the UK to be cutting itself loose from its existing trade partners.
Brexiters argue that, if we fail to get a trade agreement with the EU, it doesn’t matter because we can trade under the WTO’s rules alone. But half our trade is with the EU and another eighth with countries that the bloc has deals with. Few countries rely only on the WTO’s rules for the very good reason that, on their own, they don’t do a lot to open up foreign markets.
EU membership has provided the UK not only with access to the world’s largest single market but also with greater leverage in the world trade system through being part of a club of 28 countries. But we always knew that if something went terribly wrong, the WTO safety net would catch us.
Now Trump has snatched it away. It is ironic, even comical, that the Brexiters’ hero is destroying the global trading system they say is the best reason for us to leave the EU.
