It has been revealed that Post-Brexit Britain may continue
to have trading activities with the European Union for up to a period of ten
years in the event that no new trade agreement is reached by the time negotiations
are over.
According to sources, efforts are being put in place take
advantage of a little-known section in the WTO rules by officials at the Department
for International Trade that give Britain some extra time for a tailored deal
to be reached with the EU.
It is strongly hoped that the provision, set out in Article
24 of the WTO’s General Agreement on Tariffs and Trade, has been described as a
“secret weapon” in Britain’s free trade negotiations with Europe.
There this disturbing concern that the UK may likely not be
able to strike any agreement within the official two-year period of negotiations.
However, it was revealed by a source
that: “Many have asked what will happen if we reach a Brexit agreement
with the EU but we haven’t finished the free trade agreement with Europe by the
point we leave.
“What we have discovered is that we do have special
dispensation under WTO rules to continue our current trading relationship with
the EU, which is zero tariffs, until such time as that free trade agreement is
finished and the precedent that has been set is that we would have 10 years to
do that.”
The section permits Britain, as a founder member of the WTO,
to have a “reasonable amount of time” to agree a new free trade deal before
trade law would force both sides to impose tariffs on each other.
According to the rule, any temporary arrangement should
“exceed 10 years only in exceptional cases”, which suggests that Britain would
have a decade to negotiate.
An insider said: “Of course it would require the agreement
of both parties, but by not agreeing the other EU member states would be
imposing penalties on their own businesses, which is not a great idea. There’s
a big global picture here and the EU can’t afford to disrupt that.
“The Germans totally grasp it. In private, banking officials
are saying of Brexit, ‘We think you probably did the right thing for you and in
your case we would probably have done the same. We just don’t think you did the
right thing for us, which is why we’re cross.’
“Where we need to take that next is to say, we understand
why you’re cross, but there’s a lot of mutual benefit we could get if we stay
in a very open, expansive trading relationship.
“Deep down they know they’ll end up in a zero tariff trading
arrangement, they just need to show they’re negotiating hard to get it.
“Britain doesn’t want the EU to fail. We want the EU to be a
stable, prosperous and secure partner because that would be good for us.”
It was further explained by the source that the disposition
in the City of London was encouraging, irrespective of the fact that Remainers
have predicted mass exodus of businesses to other cities like Paris and
Frankfurt.
“Companies are not going to move to Frankfurt, why would
they?” the source said.
“When CEOs ask why they should continue to invest in the UK,
we say, ‘For the reasons you’ve always invested in the UK – a legal system you
understand and our skilled workforce.
“We have the most advanced professional infrastructure and
nobody else in the world is going to replicate that in the next 20 years.
Equally, nobody’s going to be able to replicate the reputation the Bank of
England has as a regulator.
“People across Europe are now saying, ‘If we harm the City
of London we are just going to be harming ourselves because capital sits in New
York, London, Hong Kong and Singapore, it doesn’t sit in Paris or Frankfurt.
People will continue to come to London because they can make money. We speak
English and we’re in the right time zone, which is why we have not lost a
single investor.
“When we think we might be getting close to losing one, we
say, ‘So, you understand the German legal system?’ Or, ‘How many of your staff
speak Portuguese?’ Or, ‘You trust Italian magistrates to protect your
investments?’ by which point they have changed their mind about leaving
London.”
