It is “not realistic” to believe the UK can begin trading under World Trade Organisation (WTO) rules the day after Brexit in March, the head of the intergovernmental group has said.
“I was a trade negotiator; I negotiated trade deals my whole life and I’m very realistic about how fast you can go with those deals.” WTO director-general Roberto Azevêdo told the BBC’s Today programme.
“The moment that other countries begin to sense an opportunity to increase their market share or increase a quota here or there, they are going to go for that.
“There is going to be a lot of uncertainty here; there will be ... unpredictability and people who are making investments are going to take that into account.”
Most predictions about the impact of a no-deal scenario have been based on trading under WTO rules after Brexit, which is due to happen in seven months’ time.
But Mr Azevêdo said it was “very unlikely that you’re going to have a 100 per cent agreed outcome for all WTO members between now and March”.
If an agreement is not reached with the EU and WTO rules are not immediately available, the UK would be in uncharted territory, as it would be unclear what rules and tariffs apply to imports and exports.
The WTO boss’s comments cast further doubt on the assertion made last month by the UK’s international trade secretary, Liam Fox, that leaving the EU with no agreement would be better than prolonging talks with Brussels, the latter a move he claimed would be a “complete betrayal” of voters.
If the UK does shift to WTO rules, Mr Azevêdo said some sectors will face significantly higher tariffs.
“It’s not going to be the end of the world, in the sense that trade is going to stop and that everything is going to fall down, no. But it’s not going to be a walk in the park either,” he added.
The pronouncement came as deep divisions in the government were further exposed on Thursday, following the publication of 24 technical notices which laid out what might happen to a range of sectors of the UK economy in the event of a no-deal Brexit.
Shortly after releasing the documents, Brexit secretary Dominic Raab sought to play down the impact of no deal being agreed, but hours later the chancellor, Philip Hammond, warned crashing out of the EU would blow an £80bn hole in the public finances.
The notices included warnings UK citizens in Europe could lose access to payments and pensions from UK banks, and that credit card payments to the EU could become more expensive.
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