Because we have been sheltered from it for 44 years, dealing with international trade through the WTO is new to us but we are starting to get a taste of what things will be like. The FT (HERE or not behind a paywall HERE) have an item reporting that the USA has signed a letter, along with other major agricultural exporters including Argentina, Brazil and New Zealand, sent last week to the EU and UK’s WTO ambassadors, objecting to a plan to split the existing EU quotas between the UK and EU. These quotas cover all sorts of things from New Zealand butter and lamb to US poultry and wheat.
The plan to split the various quotas was announced in August (HERE) but it was just an agreement between the EU and the UK, now WTO members who think they will be disadvantaged by it have objected.
The Politico website has more on the story (HERE) and explains that countries are unhappy that the 100,000 tonne quota for lamb (for example) might be split 30,000 tonnes to the UK and 70,000 to the EU but they question what happens if we don't take our full quota or if lamb becomes less popular then may not be able to make up the shortfall in the EU if they are already taking their full quota. It would represent a loss of flexibility. I assume that our quotas may have to be increased and this will adversely affect some domestic suppliers - so much for Liam Fox saying nothing would change. Or, indeed that we were going to "take back control".
The Politico website has more on the story (HERE) and explains that countries are unhappy that the 100,000 tonne quota for lamb (for example) might be split 30,000 tonnes to the UK and 70,000 to the EU but they question what happens if we don't take our full quota or if lamb becomes less popular then may not be able to make up the shortfall in the EU if they are already taking their full quota. It would represent a loss of flexibility. I assume that our quotas may have to be increased and this will adversely affect some domestic suppliers - so much for Liam Fox saying nothing would change. Or, indeed that we were going to "take back control".
Some people have doubted that we can easily regain our membership of the WTO but I don't believe that will be a problem since, as I understand it, we are jointly a member with the EU and separately in our own right. No, the problem will in splitting our quotas from the rest of the EU 27 as indicated in June 2016 by Peter Ungphakorn of the International Centre for Trade and Sustainable Development (HERE). He says more problems will come because in many areas the EU quota is unknown! He claims the only confirmed commitments on tariffs, quotas, and farm subsidies are from before 2004 when the EU had 15 member states. The EU has expanded three times since then, but in 12 years it has been unable to agree with the WTO membership on revised commitments.
A couple of things to note. The present argument is over agricultural quotas and I assume others will follow in areas of manufactured goods. And worryingly, the objectors include countries we thought would be our allies. It all looks very tricky to me.
