Are Brexiteers right to say UK can soften no-deal Brexit?

Article 24 is part of the rule book of the 1947 General Agreement on Tariffs and Trade, the forerunner of today’s World Trade Organisation (WTO). It is a cornerstone of international trading arrangements.

Some Brexiteers say that it allows for existing UK-EU trading relationships – no tariffs – to be extended for up to 10 years in the event of a no-deal Brexit. But this is only partially correct.

Legally, such an arrangement cannot be simply demanded or claimed by the UK as of right. The other party involved – the European Union which acts as one entity for such purposes – would have to agree to such an arrangement.

If the EU did so it would be on the basis that the UK and the EU had concluded a withdrawal agreement that embodied the commitment to continue to trade on the existing terms, until such a time as a new trade relationship was settled. Thus, this would be with a view to a future free trade agreement or a customs union.

But no-deal Brexit means no such deal would have been concluded. Brexiteers argue that the chaos of no deal to the EU, and loss of lucrative business would force their hand. It is true that this leverage might succeed, to that extent.

However, and realistically, the EU would feel reluctant to grant the UK such free trading terms with their vast market if there was no other agreement on the other vital issues covered off in the May deal. Thus, if the UK wanted to renegotiate the £39bn “divorce bill”; change the EU withdrawal agreement terms for the civil rights of expat citizens on both sides; or unilaterally rescinded the Irish backstop, then the EU might refuse to agree to any General Agreement on Tariffs and Trade Rule 24 trading arrangements, whether on an interim or permanent basis.

The key factor, in other words, is that it takes both sides to sign up to anything under Article 24.

The UK might decide to unilaterally lift any tariffs or other restrictions on UK-EU trade – a beacon of free trade – with an exception/hope the EU would reciprocate.

But under WTO rules, the UK would be obliged to do the same for every other WTO member, including the US, China, India and virtually every other country. That would be even more destructive to British industry and agriculture. (The EU would be under a parallel obligation, and unwilling to adopt it.)

Article 24 also only applies to trade in goods. Services and such issues as mutual recognition of product standards and professional qualifications lie completely outside its scope, and the great majority of the UK economy is based on the services sector.

Article 24 therefore, much quoted by Boris Johnson and Nigel Farage, is a more complicated solution than it looks.