Britain circulates draft procurement deal for Brexit at WTO

Monday, 12 March 2018 00:00 - - {{hitsCtrl.values.hits}}

Geneva (Reuters): Britain has circulated a draft agreement on procurement at the World Trade Organization, trade diplomats told Reuters, one of three WTO documents it needs to finalise as it leaves the European Union.

The EU is a member of the WTO’s government procurement (GPA) agreement, whose members have liberalised access to each other’s procurement markets, with an estimated $1.7 trillion annual spend, but Britain is not a member in its own right.

To continue its GPA membership when it leaves the EU on March 29, 2019, Britain needs to persuade the other 45 countries in the GPA to keep it in the club. It will need its own membership terms, set out in documents known as “schedules”.

“We have issued a draft set of schedules, which makes clear to other GPA members that we will continue our current rights and obligations to provide continuity and certainty for businesses and our trading partners,” a British trade official said.

Keeping Britain in the club should be mutually beneficial, but other members could make new demands for greater market access in Britain.

Britain remaining in the GPA means its companies will be able to continue bidding for U.S. federal government contracts, which would otherwise be off-limits because of the U.S. Buy American Act, which has a waiver for GPA members.

British voters supported leaving the EU in a referendum in June 2016, forcing it to disentangle its affairs from those of the EU, which has represented Britain at the WTO since the Geneva-based trading body was set up in 1995.

Apart from rolling over its GPA membership, Britain also needs to agree two other new “schedules” - one setting out its commitments for trade in goods and one for trade in services.

Without agreement on those, British trade officials will lack a baseline from which they can negotiate new trade agreements with other countries.

Britain circulated a draft services schedule among WTO members at the end of February.

It has not yet formally submitted its services schedule or its GPA schedule to the WTO, and talks on the much more difficult goods trade are still stuck on the thorny issue of agriculture.

To get agreement on the new terms, Britain is expected to make sure other WTO members are not adversely affected by its divorce from the EU, so it may have to compensate them if they are not happy, or face a long-running legal dispute.