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Brexit Law - the way ahead

 
 

 

 

WTO and trade

Brexit podcast - International Trade and WTO Rules

At the heart of what Brexit will actually mean for business are the UK’s terms of trade with the EU27 and the rest of the world after it leaves the EU. The continued uncertainty over the terms of the UK’s withdrawal from the EU have brought into focus the prospects of the UK leaving the EU without an agreement in place (a so-called “hard Brexit”). One of the well-publicised consequences of this would be that the UK would have to rely on World Trade Organisation (WTO) rules to trade with the EU and certain third countries with which the EU has concluded free trade agreements (and vice versa).

In this episode of our Brexit podcasts, Senior Associate in our International Trade and Regulatory Law Group, Jonathan Benson, introduces the key concepts in the WTO rules and discusses key considerations for businesses operating under such a trading regime post-Brexit.

Download Please click here to listen to the podcast​

Brexit and the creation of UK sectoral sanctions targets

In 2014 and 2015 the EU introduced sectoral sanctions against certain Russian and related entities. Those sectoral sanctions are primarily set out in Council Regulation (EU) No 833/2014 of 31 July 2014 (as amended) (the Regulation).

The measures established by the Regulation include restrictions under Article 5 against making new loans or credit available to, or dealing with certain transferable securities and money-market instruments issued by, 11 targeted Russian financial institutions and corporate entities. Broadly speaking, Article 5 sanctions also extend to targeted entities that are owned by, or otherwise act at the direction of, any of those 11 entities.

In the event that the UK leaves the EU on 29 March 2019 with no deal in place (a so-called Hard Brexit), the scope of the Article 5 restrictions potentially widens to cover certain UK entities connected to the 11 Russian entities already targeted. As a result, a number of UK entities may be deemed to be sectoral sanctions targets under the EU sanctions regime for the first time. This will have potentially significant consequences for those entities and for EU persons who do business with them.

Download Brexit and the creation of UK sectoral sanctions targets

The UK's New Trade Remedies Regime

One aspect of the UK’s departure from the European Union (Brexit) that has been somewhat overshadowed by recent events is the creation of an independent trade remedies regime. Perhaps this is understandable given that the immediate focus for business is on the terms of any withdrawal agreement and what a future trade agreement between the EU27 and the UK may look like. However, this new regime has the potential to be used as both a powerful shield and sword in decades to come as UK businesses rightly look at how an independent trade policy can be used to better protect their interests.

Download The UK's New Trade Remedies Regime

UK Government publishes papers on Future Trade Relationships and on Customs Bill

Publication of the two papers fleshes out the UK’s negotiating aims in preparation for a Trade Bill and a Customs Bill but highlights the many complexities that lie ahead. The papers also discuss the legislation needed to bring the changes into effect. The Government links the papers by three main negotiating objectives: trade should remain as frictionless as possible, there should be no hard border between Northern Ireland and Ireland and the UK will establish an independent international trade policy. The proposals on trade are less detailed; perhaps inevitably given that they hinge on the outcome of UK/EU negotiations. The customs white paper, a precursor to a Customs Bill, considers some of the practical consequences of both a negotiated settlement with the EU and where there is no agreement. Stakeholders are asked to comment on some of the proposals in the papers as the UK/EU negotiating rounds continue.

Download UK Government publishes papers on Future Trade Relationships and on Customs Bill

Brexit – the UK and free trade

At the heart of what Brexit might mean for businesses will be the terms of trade agreed between the UK and its key trading partners. These will largely define the extent of any barriers facing businesses moving goods, services and capital to and from the UK. As a member of the EU, the UK benefits from more than fifty Free Trade Agreements (FTAs) which the EU has concluded as part of its Common Commercial Policy. Following Brexit, the UK will either need to preserve the benefit of these agreements or replace them. Similarly, the World Trade Organisation (WTO) framework is likely to play an important role in the UK’s short to medium term trading relationships.   

In our paper available under the ‘Read more’ link below, we consider the WTO framework, examining its key principles and concepts, and the role that future FTAs may have. 

Now is the time for businesses to assess a range of scenarios dependent on the various potential outcomes of the Brexit negotiations. This should include a worst and best case scenario based on potential terms of trade and the separation of the UK from a vast range of EU regulatory regimes.

Download Brexit – the UK and free trade

No deal Brexit – trading on the basis of WTO rules

The protracted negotiations over the terms of the UK’s withdrawal from the EU have brought into stark focus the prospects of a ‘hard’ Brexit. One of the well-publicised consequences of this would be that the UK would have to rely on general World Trade Organisation (WTO) rules to trade with the EU (and vice versa). This would represent a dramatic change for companies that trade or provide services cross-border, and some believe it would have a damaging impact on many sectors of the UK economy.

Download No deal Brexit - trading on the basis of WTO rules​


 
 
 
 
 
 
 
 
 
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