GENEVA: World Trade Organization (WTO) chief Roberto Azevedo said Monday Britain’s departure from the European Union (EU) would be a bumpy road but he hoped it created as little disturbance as possible.
Azevedo surprised many trade experts at the weekend with an interview in Britain’s Telegraph newspaper, in which he said it would not be the end of the world if Britain traded on WTO terms after Brexit.
Many experts think that outcome would incur huge adjustment costs, with Britain and the EU erecting trade barriers in place of their current seamless “single market” relationship.
Azevedo said he had always been consistent and was surprised to get different reactions when people read different things into his comments.
“I said that trade will not stop because of WTO terms, and I mentioned the fact that about half of the EU’s foreign trade is already on WTO terms,” he told reporters.
“That is one side of the story. The other side of the story is that the other half is in fact under preferential agreements. So there will be an impact.”
He said, “So it’s true it’s not going to be the end of the world but it’s not going to be a walk in the park either. It is going to be a bumpy road. How bumpy it’s going to be will depend on many things including on the outcome of the negotiations with the EU.”
Britain’s negotiations with the EU are currently focused on their divorce, with a deadline of March 29, 2019. Once that is settled, they will need to agree on a new trading relationship.
That could mean trading on their unimproved WTO membership terms, or a closer relationship through a free trade agreement (FTA), or a customs union, or Britain’s continued membership of the single market.
“I have been saying from the beginning that the less waves, the less disturbance, the better. I never said anything different from that and I will say that until the end. I think that’s pretty obvious. We don’t want disturbances at this point in time,” he said.