Are WTO rules better than a bad Brexit deal?

I have just been reading a piece by a former WTO Deputy Director General on the practical effect of reverting to WTO Rules. It is one of a series which includes summaries of the practical effects on Tariffs and Country of Origin , on Financial Services, Data Transfers and existing Trading Relations with the EU. Taken together they explain the lack of panic among those doing business across borders, as opposed to those who, like me, have spent decades trying to make a reality of the single market (digital or otherwise) and fear that our supposed “achievements” will be swept away.

The reasons for the lack of panic appear simple:

  1. Except for some agricultural products, the tariffs are modest compared to currency movements.
  2. In the event of dispute, the status quo remains until agreement is reached or the procedures exhausted. The latter can take decades.
  3. The most significant pan-EU agreements are local implementations of global agreements negotiated via the WTO or other bodies (e.g. the ITU). They are not affected by Brexit.
  4. The City of London has more experience in negotiating and interpreting trade deals than all the commercial centres of Europe, let alone Brussels, added together. Its only serious rivals (including for regulatory arbitrage) are Hong Kong (including for China),  New York and Singapore.
  5. The digital single market, let alone the digital single market, are still work in progress. It remains easier, quicker and cheaper to do many, perhaps even most,  cross-border on-line transactions via operations based in the US or other off-shore locations

The relevant wording from the Conservative Manifesto is:  “We will ensure immediate stability by lodging new UK schedules with the World Trade Organization, in alignment with EU schedules to which we are bound whilst still a member of the European Union. We will seek to replicate all existing EU free trade agreements and support the ratification of trade agreements entered into during our EU membership. We will continue to support the global multilateral rules-based trade system …”

Of course the objective is more positive:  “a new deep and special partnership with the EU, which will allow free trade between the UK and the EU’s member states … [with] … as few barriers to trade and investment as possible …”  . But if the Commission is allowed by the member states to play mind games in an attempt to extract billions to shore up its budgets, the end game is now apparent. It will take a decade or more for the Commission to impose any significant changes but only two years for its own finances to implode unless Germany agrees to cover the hole left by the departure of the UK.

The issues with regard to the free movement of data are rather more interesting.

The Conservative commitments to workers rights in a gig economy, to giving us control over our own data and to public sector data governance intercept a number of current EU initiatives, not just only the implementation of the on-line predators friend, the General Data Protection Register. Meanwhile the speed with which the Greater Manchester Police appear to have been able detain the ring of support behind the Arena Bomber  illustrates the importance of the recent UK legislation which prevented the previous powers of GCHQ from lapsing as a result of judgements in the European Court. The ironies include the role of Brexit Minister in the EU Court case and the concern of many member states that Brexit will lead to reduced access to information collected under powers which they collectively (via the EU) oppose. I need to spend more time unpacking these before blogging in more detail.