Legal and trade experts have questioned whether the US-UK deal complies with World Trade Organization rules.
Ignacio García Bercero, a former senior European Commission official now at the Bruegel think-tank said the UK decision to cut tariffs for US exporters without extending the same deal to other countries risked legal challenges at the WTO.
Under the WTO’s ‘most favoured nation’ concept, countries must offer the same tariffs rates to all countries, unless they are reduced via a bilateral trade deal that covers ‘substantially all trade’, which the UK-US pact announced on Thursday does not.
“It is concerning if the UK has offered preferential tariff concessions to the US. In the absence of any commitment by the US to eliminate tariffs on other countries, this cannot be justified,” Bercero said.
But one trade lawyer, who declined to be named, pointed out that WTO rules allow trade deals to be phased in. “They could say it’s the beginning of [free trade agreement] negotiations and then take 10-15 years to ‘conclude’.”
