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I have argued on many occasions that the Brexiteers' breezy assumption that the UK can simply default to WTO tariffs and rules in the event of a no-deal Brexit is erroneous. For one thing, a no-deal Brexit implies leaving on bad terms without payment of the exit payment which the EU27 claims is due.  In that context the EU may not be disposed to offer the UK most favoured nation status.

In addition, there has been no agreement on a methodology for carving out UK share of current EU28 WTO trade quotas, and in that context, it cannot simply be assumed that proportionate (to what?) quotas will be granted to the UK. The Joint letter from the EU and the UK Permanent Representatives to the WTO is a statement of intent only, and implies a harmonious Brexit process and Treaty will be agreed.

Finally, the EU is actively engaged in negotiating bi-lateral trade deals with all its major trading partners to the point where trading by default WTO rules will apply only to a diminishing residual share of total EU external trade. The WTO is effectively a moribund organisation which has not been able to conclude a successful trade round in many years. There is nothing to prevent the EU27 withdrawing from the WTO and applying punitive tariffs to the UK if it deems the UK to have been in dereliction of payment of debts rightfully due.

Remember, a no deal Brexit implies leaving on very bad terms indeed, and the EU27 will be under no obligation to make life easy for the UK even if Ireland, in particular, is caught in the cross-fire. The one thing the EU cannot allow happen is for the UK to be seen to "have cake and eat it" outside of all the other obligations EU members have to observe. Other ways can be found to compensate Ireland and specific industries most effected.

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by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Jan 23rd, 2018 at 09:59:07 PM EST
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