Whenever you mention ‘Article 24’, you receive much hysterical abuse from the remnants, in most cases those with big academic titles. An indication they are scared we are about to achieve something. Also, Article 24 of GATT (General Agreement on Tariffs and Trade) follows the World Trade Organization(WTO).
Some have been saying, “The EU cannot agree to it”, ‘’ If we will exit on bad terms, the EU will not agree to do the deal”. Also, others have been saying, “It is impossible in a no-deal case”. And, we must levy tariffs on EU goods, as well as those from all over the world”. In fact, in a discussion about Article 24 on Radio 4’s, someone made the last point.
However, all these suggestions are wrong. They are all wrong because the chief negotiator of EU, Michel Barnier, the trade advisers, and personnel have been participants of the International Trade Committee of the European Parliament undertaking trade deals. Also, the senior individuals at the WTO and the best trade lawyers like Lorand Bartels of Cambridge University, an impartial Article 24 professional has been about the suggestions.
According to them, GATT Article 24 is desirable and doable. Some facts about Article 24 are:
- We should not confuse the ‘no-deal’ or ‘deal’ talks. In fact, we are not looking for renegotiation on the Withdrawal Agreement, or try correction of the deal before 31st October. It has been made clear by Angela Markel and other EU leaders that negotiation on the deal is impossible.
Thus, it is not a deal founded on the Withdrawal Agreement in the EU law like the Lisbon Treaty’s Article 50. Also, it is not a trade deal carried out in the EU’s “Political Declaration” or “Future Relationship” provisions by its legal binding legislation. Instead, it is a different deal performed under the rules of the World Trade Organization.
- Trade rules are not made by the EU. Instead, they are made by WTO. So, the EU operates within the global trade rules through the WTO. Indeed, many EU free trade agreements includes WTO level agreements such as GATS.
- The WTO’s predecessor was GATT, and Article 24 is in the global GATT rules that all WTO members are in agreement to establish.
- The main aim of the WTO is to enhance free trade all over the world. Thus, the WTO does not support barriers to trade, tariffs, or quotas. For this reason, the WTO will be against the UK and the EU is they will get back to impose tariffs on EU goods, and on British goods in the EU.
- The GATT Article 24 lets either blocs or two countries to progress to a customs union or free trade area. Actually, it lets two countries to have their tariffs and quotas lower than the “Most Favoured Nation Rules”. However, it is ironic that this is the foundation of the EU’s zero-tariff Customs Union that happened from 1957 to 1968 for enactment.
- Therefore, since the WTO is against tariffs, it is amenable to means of preventing tariffs without the other members getting disadvantaged.
- It is certain that GATT 24 requires a temporary agreement from the UK and the EU, although this might be written at the back of an envelope. By good luck, Lorand Bartels has written an effective one-page FTA that is enough to let Article 24 apply. It is a temporary FTA. However, it completely legal and manageable.
- What will make the EU accept?
Apart from the UK being the 5th largest economy in the world, it is also the EU’s biggest single market. Also, more than a million German jobs depend on British consumers who buy German goods. Thus, lack of a basic GATT 24 deal will lead to goods from the EU having tariffs. Hence, their suffering would be more than that of the UK, as they make more sales to the UK. For this reason, Germany does not well this idea, as it makes almost a quarter of the entire EU trade to the UK
Further, the UK might be ready to pay a fair amount linked with the Withdrawal Agreement. However, this is in line with the basic deal.
Without the EU agreement to GATT 24, the UK may internationally and globally alter its import tariffs. Also, be ready to cut all tariff rate quotas. But, it is obvious the UK is not capable of regulating the import tariff rates from the EU.