US, Other Countries Raise Concerns Over Lower EU TRQs After Brexit

The U.S., Mexico and several other countries expressed concern over the European Union’s plans for allocating its tariff-rate quotas after the United Kingdom’s planned withdrawal from the EU, at an April 11 meeting of the WTO trade in goods council, according to a Geneva-based trade official. “The current approach to Brexit TRQ negotiations is unacceptable and we are eager to engage [with the EU] to ensure our rights are maintained,” a U.S. representative said at the meeting.

Currently, once the U.K. leaves the EU, the EU will split its existing TRQ amounts and allocate a proportion representing its current inter-EU trade with the U.K. to U.K. goods (see 1903120065). That would leave the rest of the world with a lower TRQ amount for exporting to the remaining EU-27 countries.

“While the US is supportive of the U.K. establishing itself as an independent member of the WTO, it will not accept an EU-U.K. approach to TRQs that is prejudicial to our existing rights,” the U.S. said at the meeting, according to the official. There has been a “lack of indication by the EU of proper compensatory adjustments,” Brazil said in a statement echoed by the U.S. and other WTO members.

Some countries, including Canada, said the issue is impossible to assess while the EU-U.K. relationship remains in limbo. "We encourage the EU to reflect on WTO members' concerns," Canada said. China said assessing market access offers without clarity on the future EU-U.K. relationship is like "flying in the dark."

The EU and U.K. recently agreed to postpone Brexit until Oct. 31 while the U.K. considers its options (see 1904100077). That may include adopting the deal negotiated between the EU and the U.K., or even deciding to revoke Article 50 altogether and remain in the EU, European Council President Donald Tusk said at a news conference following the April 10 announcement.

At the goods meeting, which came a day after the delay was announced, the EU said it shares WTO members’ concerns over the uncertainty around Brexit, which is why they started talks with WTO members years ago. The EU said it continues to hold negotiations with WTO members in “good faith,” the trade official said.