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Lawson wrong on keeping EU trade deals post-Brexit

by Sam Ashworth-Hayes | 04.03.2016

Nigel Lawson says “our trade arrangements with the rest of the world remain totally unchanged” if we quit the EU. The former Chancellor, now chairman of Vote Leave, told the BBC there was “no doubt” that the UK could keep the trade deals negotiated by the EU after leaving.

Lawson thinks these deals would continue “because the European Union did not negotiate as the European Union. It’s not allowed to. It’s not a member of the WTO [World Trade Organisation].”

The EU is a member of the WTO. But that’s not the only mistake Lawson made.

Not a party at all

While some deals have to be ratified by member states, the EU is at perfect liberty to negotiate trade deals on its own. When it does so, only the EU and the country or countries it negotiated the deal with are parties to the treaty.

Thomas Sebastian, a barrister at Monckton Chambers and a specialist in EU and WTO law, told InFacts that the UK would “not have any ‘right’” to be added as an additional party to these deals. If, after leaving, we wanted in on one of these deals, it would be “a matter for negotiation between the third country, the EU and the UK”.

Still a party, but not much fun

When the EU signs a treaty that covers more than trade, it sometimes has to be ratified by individual member states. In these “mixed agreements” the UK is a treaty party in its own right, and would still be so after a Brexit.

But that doesn’t mean it would still benefit from the trade sections of the agreements, which are generally written as applying to the EU and the country it’s signing an agreement with. Each provision in each mixed agreement would have to be scrutinised to see how it applied to a post-Brexit Britain.

Sebastian says that, in “most cases”, the UK won’t be able to take the benefit of mixed trade agreements if it quits the EU.

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Even our WTO membership could be affected. While we’d still be WTO members and be covered by commitments on tariffs, Sebastian points out that “certain aspects of the UK’s WTO obligations have not been specified”, particularly the arrangements for agriculture subsidies. This means that, if we wanted to help our farmers after they stopped receiving support under the EU’s Common Agricultural Policy, we would need to negotiate and agree the terms at the WTO.

Economic consequences

So the UK’s trade arrangements would not “remain totally unchanged” after a Brexit. We would definitely no longer benefit from some treaties, while sorting out our position on others would be a long, costly and complex process.

Lawson didn’t respond to requests for comment.

Edited by Hugo Dixon

Tags: , , Categories: Articles, Brexit

One Response to “Lawson wrong on keeping EU trade deals post-Brexit”

  • Why wouldn’t all the parties to EU trade treaties not want to carry on on the same terms with an independent UK? At least in the interim. Then they could at leisure negotiate a more mutually beneficial deal.