Lack of Certification of the WTO Goods Schedules of the United Kingdom: A Way for Frictionless Trade Under No-Deal Brexit?

Abstract

The United Kingdom (‘UK’), as a Member State of the European Union (‘EU’), does not have its own schedule of concessions under the World Trade Organization (‘WTO’) – for now – because the EU, as a single customs union, has consolidated schedules for goods and services. The UK is currently negotiating its schedules with other WTO Members, but time is running short ahead of the UK’s scheduled exit from the EU on 31 October 2019 (‘Brexit Date’). If the UK fails to certify its schedules before the Brexit Date, the question becomes whether the UK could unilaterally establish its new schedules and conduct trade based on ‘uncertified’ schedules that have not been agreed by all WTO Members. The panel in EU – Poultry (China) found that certification of a schedule is not a legal prerequisite to implement agreed-upon changes in negotiations under Article XXVIII of the General Agreement on Tariffs and Trade 1994 (‘GATT’) at the national level. Based on the panel’s finding and Article XXVIII:3 of the GATT, under a no-deal Brexit scenario, the UK would be able to unilaterally establish its goods schedule, even in the absence of agreement with other Members. Further, the UK could enforce the new schedules before completing the certification process and, thus, trade under the uncertified goods schedule. However, three caveats must be noted: (1) the UK must certify its new goods schedule eventually; (2) unlike the goods schedule, the completion of certification is necessary for the UK to give effect to its new services schedule; and (3) if another Member brings a complaint concerning the UK’s uncertified schedules, and the dispute results in an appeal, the Appellate Body may reach a different conclusion when applying the panel’s decision in the context of Brexit. In short, the UK must certify its goods schedule as soon as it concludes Article XXVIII negotiations with other WTO Members. The Poultry panel’s decision does not support a way for frictionless trade between the UK and other countries under no-deal Brexit.