Only Whitehall stands in the way of our Gatt 24 ‘get out of jail free’ Brexit card
BY IAIN DUNCAN SMITH, DAVID CAMPBELL BANNERMAN, MARTIN HOWE QC, JON MOYNIHAN AND REBECCA RYAN
It was supposed to be a “gotcha” moment. During the Conservative leadership election, Andrew Neil sought to ambush Boris Johnson, challenging him on his claim that a World Trade Organisation (WTO) deal called GATT Article XXIV (GATT24 to the layman) could be used to smooth a ‘No Withdrawal Agreement/No Deal’ Brexit. But it wasn’t Boris who was wrong; it was, most uncharacteristically, Mr Neil.
The exchange is worth going through in some detail: first Boris stated that we could leave the EU while still leaving a current zero tariff and no quotas agreement in place. He had in previous statements explained that this could be accomplished by an agreement between the UK and the EU to use Clause 5b of Article XXIV of the GATT.
Mr Neil had clearly prepared a well researched trap on this. That 5b was all very well, he harrumphed – but what about 5c? Triumphantly, Neil proclaimed that 5c overruled 5b. He derided Boris for not having fully understood GATT XXIV. The scene is used to claim Boris was caught out, and is used by Remainers to deride Boris for getting it wrong. But in an examination of the exchange, Boris twice claims: “I would confide entirely in 5b which is enough for our purposes”, replies Boris. He was not concerned with 5c, or even 5a! Neil tried to claim 5c can overturn 5b — but expert lawyers explain that this 5c applies only in the case of an ‘interim arrangement leading to the formation of a free trade area’.
The phrase ‘interim agreement’ means more than the colloquial phrase – it has a very specific meaning under GATT Article XXIV. It refers to a case where two parties move gradually towards a free trade area with a plan and schedule of reducing tariffs over time. The EU used this very provision when it was first established as the EEC. But the UK and EU already have zero-tariff trade between them, which we merely seek to maintain, whilst replacing EU membership with a ‘SuperCanada’ style Free Trade Agreement and mini deals on non-trade areas. So 5c does not pertain. Boris was absolutely correct – 5b is sufficient and 5c is irrelevant. In fact, arrangements can be extremely simple: a basic 3-page Free Trade Agreement would suffice.
A one page illustrative version has already been drafted by Dr Lorand Bartels, an expert in trade law at Cambridge University Yes this needs the EU’s and the WTO’s agreement, for sure. Call this a ‘basic deal’. But it’s massively in the EU’s interest to agree, saving £13bn a year of tariffs on EU goods (UK only £5bn), and it’s precisely the kind of tariff free approach that the WTO exists to accomplish.
The reality is that the option of using the GATT Article XXIV is more viable than ever. If rebel MPs want a deal here is a deal. Granted only basic, but a deal that is enough to avoid delays at borders, as you will not have to apply tariffs and quotas on most goods. Little obvious will change when we leave on October 31st this way.
Boris Johnson has had a fearsomely successful first few weeks as Prime Minister and has transformed the situation. Finally, the UK has the leadership it needs – a Prime Minister confident on the world stage, who is able to stand up to the EU and make it clear what needs to be done. Already, they are responding with flexibility and positive noises. Clarity of leadership at the international level – particularly when dealing with an organisation like the European Union – is everything. As Boris made clear, May’s Withdrawal Agreement is dead.
The problems stretch far beyond just the backstop. The WA – three times rejected by the House of Commons – was the culmination of three years of dithering and delay from a government and civil service who didn’t truly believe in Brexit, and weren’t psychologically prepared to seize this golden opportunity. Now, the country has leadership which is excited by the prospects of leaving the EU. Binning the Withdrawal Agreement, and invoking GATT24, is the way ahead to a clean, peaceful and immediate Brexit.
We can get straight on with negotiating that US trade deal and with deals around the world, and the many other freedoms Brexit brings. Wiser heads in the EU understand that the heat needs to be taken out of this debate and we need to return to first principles. ‘Mini-deals’ – sector by sector emergency legislation to smooth the transition in the event of ‘No Deal’ – have already been quietly scoped out and agreed. And the EU does not want No Deal. It has made that abundantly clear —just as we have made it abundantly clear that the Withdrawal Agreement ‘negotiated’ by Mrs. May’s administration is unacceptable.
It’s easy, in the 24-hour milieu of social media scare stories and partisan reporting, to get caught up in the moment. It is said that Whitehall is advising Downing Street that GATT24 will not work, whilst others dislike the political linkage with the ERG.
It will work, as a whole international trade legal team advising successful Boris campaign adviser Iain Duncan Smith know, and the concept didn’t originate with the ERG. But they need to be challenged heavily on such advice by legal experts such as Martin Howe, Barney Reynolds and Dr Lorand Bartels, who have stated unequivocally that these Whitehall advisers have got it wrong and that GATT Article XXIV 5b is a not only viable, but is a deliverable solution in this tight timetable.
A three page Free Trade agreement can be scoped, negotiated and agreed by the vital EU Council on 17th October, and be applied from 31st October. Deal! Provocative statements from either side do not help. But it is time now to inject plain common sense into the Brexit debate and push a negotiating stance that works for all sides. Macron and Merkel have made it quite clear they are ready to compromise.
With our new Prime Minister at the helm, the EU has finally started to listen, instead of trying to dictate. GATT Article XXIV is the ‘get out of jail free’ card for both the UK and the EU. It can satisfy MPs because it is a deal, even if a basic deal. Why wouldn’t both sides want to use it?
This article originally appeared in The Telegraph on 30th August 2019.