Tel. +44 (0)20 7287 4414
Tel. +44 (0)20 7287 4414
The Bruges Group spearheaded the intellectual battle to win a vote to leave the European Union and, above all, against the emergence of a centralised EU state.
The Bruges Group spearheaded the intellectual battle to win a vote to leave the European Union and, above all, against the emergence of a centralised EU state.

Bruges Group Blog

Spearheading the intellectual battle against the EU. And for new thinking in international affairs.

Leaving on WTO terms

Published on 7 January 2019, the Rt Hon Lord Peter Lilley and Cllr Brendan Chilton, Global Britain and Labour Leave outline the huge advantages to trade gained by leaving the EU on World Trade Organization terms.

Far from 'crashing out' we will be 'cashing in'. We will keep our £39 billion. Even the House of Lords' heavily pro-Remain EU Financial Affairs Sub-Committee concluded that "Article 50 allows the UK to leave the EU without being liable for outstanding financial obligations under the EU budget."

We will end uncertainty – economic and political. But under the government's draft Withdrawal Agreement, corrosive uncertainty would continue for two years – or even longer – about our trading and other links to the EU.

The Irish border issue will be solved by administrative measures with no need for a backstop. The UK, Ireland and EU have all given assurances that if we leave without a Withdrawal Agreement, they will not introduce infrastructure or checks on the border between Ireland and Northern Ireland.

Leo Varadkar said: "I've made it very clear to my counterpart in the UK and also to all the other EU prime ministers that under no circumstances will there be a border – full stop."

When an Irish MP asked President Juncker "If negotiations fail with the Tory government on the exit agreement … will you give us a clear commitment that the European Union will not impose a border, customs posts or any other kind of infrastructure on the frontier in order to protect the European borders?" Juncker replied: "Yes."

Jon Thompson, CEO of HM Revenue & Customs, said, "Our consistent advice to ministers has been, we do not … require any infrastructure at the border between Northern Ireland and Ireland under any circumstances."

The WTO is a safe haven not a hard option. Six of the EU's top ten trading partners trade under WTO rules - the USA, China, Russia, India, Brazil and Japan. So we could too. The WTO guarantees no discrimination, so, when we leave, the EU cannot impose punitive tariffs or barriers to trade. The WTO also guarantees Most Favoured Nation terms, so the EU and all other countries must grant us the best terms they give other countries with whom they have no preferential agreement.

Our exports to countries we trade with on WTO terms have grown three times faster than our exports to the Single Market since it was established. Countries like us, which are outside the EU, have increased their exports to the Single Market far faster than we have.

Tariffs on our exports to the EU will amount to £5-6 billion. This is half of our net contribution to the EU of £10-12 billion. Paying £10 billion to avoid £5 billion has not been a good deal! Our exporters to the EU will face an average tariff of 4 per cent – far outweighed by the 15 per cent improvement in competitiveness due to the sensibly lower pound since the referendum.

Scares about import delays are particularly ludicrous since we will control our own borders. Why on earth would we prevent things we need from entering our country? HMRC and DEFRA say they will not need to carry out any additional checks at the border.

Dover Port Authority says it does not expect problems with handling imports. The UK Major Ports Group which handles 75 per cent of UK seaborne trade says that it already has "the capacity and infrastructure to handle large volumes of both EU and non-EU trade today without a log jam." The BBC reported that "French officials dismiss UK fears of Calais go-slow." The Mayor of Calais says delays would be 'economic suicide'.

There will be no shortages of medicines. The WTO's Pharmaceutical Tariff Elimination Agreement means that tariffs do not apply to finished medicines. This Agreement covers 10,000 medicinal products across the EU, Canada, United States, Japan and Norway. It covers almost 90 per cent of the world's pharmaceutical trade.

Planes will continue to fly to and from the EU. The EU has announced that it will allow UK airlines to fly over, land in and return from EU airports even if there is no Withdrawal Agreement. The EU announced this on 13 November 2018, but it was barely reported, allowing the 'planes won't fly' scare to run and run.

The authors sum up, "The government is in the bizarre position of preparing to leave on WTO terms, while pretending that its preparations will be unsuccessful. In fact, talking up the horrors of 'no-deal' is not merely self-contradictory it is extraordinarily irresponsible. The PM's only hope of securing any substantive changes in her draft deal depend on her convincing the EU she is prepared – in every sense – to leave on WTO terms." 

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Director : Robert Oulds
Tel: 020 7287 4414
Chairman: Barry Legg
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Founder President :
The Rt Hon. the Baroness Thatcher of Kesteven LG, OM, FRS 
Vice-President : The Rt Hon. the Lord Lamont of Lerwick,
Chairman: Barry Legg
Director : Robert Oulds MA, FRSA
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Founder Chairman : Lord Harris of High Cross
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