No Deal Brexit – Concern expressed whether trading on WTO rules will be possible…

25 January 2019

Author: Niamh Magee
Sector: Brexit


With time marching on and the prospect of a No Deal Brexit looking increasingly possible, the House of Lords appears to have hindered the UK’s ability to move towards trading on World Trade Organisation (WTO) terms in the event that a deal cannot be agreed.

On Monday 21 January, the House of Lords voted to shelve the Government’s proposed Trade Bill by 243 votes to 208 on the basis that it didn’t contain enough detail about future arrangements, for example, in relation to food safety and animal welfare in the proposed trading regime. The Government has been asked for more detail on how future trade agreements will be agreed and scrutinised for the last 15 months but still failed to provide a bill that satisfied the House of Lords’ concerns. The decision to shelve the proposed bill means it is unlikely meet the scheduled date of 25 February for the report stage, without the publication of more detailed proposals on trade.

According to Cabinet minister and International Trade Secretary Liam Fox, this makes the UK’s move to the WTO’s terms “impossible”. The Trade Bill would enable the UK to make any changes required in domestic legislation as the UK accedes to the Government Procurement Agreement (GPA). Dr Fox explained that it would not be possible for the UK to accede to membership of the GPA and trade on WTO rules in the event of a No Deal Brexit without having the proposed legislation in place.

To put this in context however, the Trade Bill is one of a total of nine bills which Parliament is required to pass in order to enable the UK to exit as cleanly as possible on 29 March (if no deal is agreed beforehand). The contentious nature of the issues being discussed is highlighted by the fact that, to date, only 5 bills have passed since the date of the referendum (5 passed in 31 months versus 9 required in less than 40 days…..).