Are the Brexiters correct when they claim that we can use article GATT 24 to continue on the tariffs regime now in force until we have a trade agreement with the EU?

GATT 24 or Article 24 of the WTO is a rule that many Brexiters, including Boris Johnson, have held up as a holy grail to get them out of their troubles. Crucially they claim that it will all will be well in the event of a no deal because we can simply carry on with the current zero-tariff system.

It is not that simple. Article 24 can only be used as an interim measure if there is a “plan and schedule” in place and agreed by both sides that outlines what the final deal will look like.

i.e. Article 24 is the precise opposite of what the Brexiters claim. It is of no use at all in the face of a no deal, it requires there to be a deal!

Indeed, even then it is limited to ten years except in exceptional circumstances. That the trade law acknowledges that an interim arrangement my last ten years is in itself an illustration that things are not as simple as the Brexiters pretend. Indeed, even Liam Fox has pointed out that this scheme will not work.

If the UK were to unilaterally set its tariffs to zero for the EU the ‘Most Favoured Nation’ clause would oblige us to do so for all countries. i.e. tariff free for European farmers means tariff free for US farmers. Even then, the EU will impose tariffs to ensure it is obeying international law.

This was confirmed by EU Trade Commissioner Cecilia Malmstrom who said that the use of Article 24 to prevent tariffs was “completely wrong.” As she explained:

 “They [the UK] will have to trade with us and other countries, until there are trade agreements - and we hope that will be a trade agreement - on the ‘most favoured nation’ basis. And that will mean new tariffs.”[1]

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[1] ‘No hope of avoiding tariffs in 'no deal' Brexit - EU's Malmstrom’, Reuters, June 2019.