Brexit risks opening Pandora’s box of trade disputes for Britain

Bloomberg

As dawn broke on the UK’s decision to leave the European Union last year, Julian Braithwaite was awoken by a phone call from a fellow diplomat in Geneva. The message was more like a warning: your world is about to change.
The British ambassador to the World Trade Organization, until now a job more in name than practice, is tasked with something that’s never been done before: to navigate a seamless move from EU member at the WTO to an independent state. The trick will be to hammer out terms without triggering a vast chain of disputes among the organization’s other 163 members. With European leaders meeting this weekend to prepare their first response to Brexit, Braithwaite’s efforts will help determine what the UK can count on elsewhere.
“What is at stake for Britain’s efforts here in Geneva is that upon exiting the EU, they have at least something minimal, but firm to fall back on in terms of trade relations with the rest of the world,” said Marc Vanheukelen, the EU’s ambassador to the WTO.
Braithwaite could not comment because of Britain’s election campaign. It’s unlikely he imagined trade would be his main preoccupation when he became UK’s ambassador to Geneva-based international organizations such as UN and WTO in 2015.
Before the Brexit vote, he spent about a tenth of his time at the WTO, where the EU or its precursors have represented the UK in trade talks for more than 40 years. Today, Braithwaite spends about half his time on trade issues, and he has been recruiting more negotiators. He’s also recalled his deputy from secondment with the UN. “What the UK is planning to do in the WTO has no precedent,” Braithwaite wrote on his blog. “We want the membership to be comfortable before we proceed, and we know that will take time and patience.”
Essentially, each WTO member’s relationships are governed by a list of terms of trade, such as the tariffs it levies on certain goods. Currently, for example, the U.K. applies the EU’s 10 percent tariff on car imports. After Brexit, the U.K. will have to set its own import tariffs on 9,000 to 10,000 products, while agreeing also to deals on services. The easiest option may be to replicate the EU’s tariffs, something Braithwaite has said the country will do “as far as possible.”