Brexit: the options for trade Contents

Chapter 2: The UK’s trade as a member of the EU

12.The UK independently develops and exploits commercial relationships with businesses in EU countries and around the world to support trade, but at present, the terms of the UK’s trade are predicated on its membership of the European Union. As a member of the Single Market, the UK benefits from liberalised trade with other EU Member States in a wide range of sectors. Under the customs union, Member States have adopted a Common External Tariff, and through the Common Commercial Policy (CCP) the EU has the exclusive competence to negotiate trade agreements with third countries.9

13.Statistics on the UK’s trade with EU countries and the rest of the world, that trade broken down into trade in goods and services, and UK exports to the EU and EU exports to the UK as shares of their respective total exports are presented below in Tables 2-4.10

Table 2: UK trade in values and shares (2015)

Exports

Imports

£ billions

Share

£ billions

Share

EU countries

222

44%

291

53%

Rest of the world

288

56%

258

47%

Total

510

100%

549

100%

Source: Institute for Fiscal Studies, The EU Single Market: The Value of Membership Versus Access for the UK (August 2016), p 5

Table 3: UK goods and services trade shares (2015)11

Share of exports

Share of imports

Goods

Services

Goods

Services

EU countries

47%

39%

54%

49%

Rest of the world

53%

61%

46%

51%

Total

100%

100%

100%

100%

Source: ONS, UK trade: Mar 2016 (10 May 2016): http://www.ons.gov.uk/economy/nationalaccounts/balanceofpayments/bulletins/uktrade/mar2016 [accessed 28 November 2016]; Institute for Fiscal Studies, The EU Single Market: The Value of Membership Versus Access for the UK (August 2016), p 7

Table 4: Comparing the UK & the EU’s trade

£billion

Share of total exports

UK exports to EU countries (2016)

222

44%

EU countries’ exports to the UK (2015)

291

6-7%

Source: ONS, UK Perspectives 2016 ‘Trade with the EU and beyond’ (25 May 2016): http://visual.ons.gov.uk/uk-perspectives-2016-trade-with-the-eu-and-beyond/ [accessed 22 November 2016]

The Single Market

14.The Single Market is an expression of one of the central aims of the EU: to create an internal market between its members that removes and reduces barriers to trade by ensuring the free movement of goods, services, people and capital (often referred to as the Four Freedoms).12

15.The scope and definition of the Four Freedoms are found in the EU’s treaties, which establish a basic legal framework for EU action. The main Treaty Articles relating to each of the Four Freedoms are outlined below.

Table 5: EU Treaty provisions relating to the Four Freedoms

The Four Freedoms

Goods

Customs duties
Arts. 28-30 TFEU

Internal taxation Art. 110 TFEU

Free movement
of imports Art. 34 TFEU

Free movement of exports Art. 35 TFEU

Persons

Freedom of establishment Art. 49 TFEU

Free movement of citizens Art. 20-21 TFEU

Free movement
of workers
Art. 45 TFEU

Services

Freedom to provide
and receive services
Art. 56 TFEU

Capital

Free movement of capital Art. 63(1) TFEU

Free movement of payments
Art. 63(2) TFEU

Source: HM Government, Review of the Balance of Competences between the United Kingdom and the European Union: the Single Market (July 2013), p 20: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/227069/2901084_SingleMarket_acc.pdf [accessed 28 November 2016]

16.Through the Treaties, Member States are prohibited from keeping in place or creating disproportionate or unjustified barriers to the Four Freedoms (referred to as ‘negative integration’).13

17.The Treaties also provide the legal basis for the EU to legislate to remove tariff and non-tariff barriers to trade (referred to as ‘positive integration’).14 The EU achieves this both through regulatory harmonisation, whereby the EU adopts legislation which all Member States have to transpose and enforce, and through the principle of ‘mutual recognition’, which requires Member States to recognise each other’s regulations and standards, thereby allowing goods and services to be freely traded across the EU.15

18.Consultancy Europe Economics, in a paper published in April 2016, noted that “carried to its logical limit there is almost no policy area that could not be seen as in some way connected to the Single Market”.16 Accordingly, the quid pro quo for membership of the Single Market is that Member States have to comply with legislation regarding competition and mergers, state aid, environmental protection, employee protection, consumer protection, data protection, procurement, and sector specific regulatory frameworks.

19.According to the Institute for Fiscal Studies (IFS), the removal of barriers to trade in the Single Market has led to “lower prices and enhanced choice, specialisation and cross-border competition”.17 Joining the EU has, according to the National Institute of Economic and Social Research, increased the UK’s trade with the EU by between 12% and 33%.18

Free movement of goods

20.The free movement of goods in governed by the customs union component of the Single Market. A ‘customs union’ refers to an agreement between countries to remove tariffs and restrictions on the movement of goods within their borders, and to agree a common external tariff for all goods imported from countries outside their borders. The EU’s customs union was incorporated into the Treaty establishing the European Economic Community in 1957. Today it is enshrined in Article 28 of the Treaty on the Functioning on the EU (TFEU):

“The Union shall comprise a customs union which shall cover all trade in goods and which shall involve the prohibition between Member States of customs duties on imports and exports and of all charges having equivalent effect, and the adoption of a common customs tariff in their relations with third countries.”19

21.Both tariffs and non-tariff barriers affect trade in goods. Non-tariff barriers relevant to the trade in goods include countervailing and anti-dumping duties, ‘voluntary’ export restraints, subsidies which sustain loss making enterprises, and technical barriers to trade.20 In order to address non-tariff barriers, the EU has abolished internal customs duties, quantitative restrictions such as quotas on imports and exports, and prohibits any national measures which may be considered to have an equivalent effect.21

22.Goods imported into the EU need to comply with the formalities related to ‘rules of origin’, to determine where goods and their components were produced, thereby ensuring that the correct customs duty is levied.22 This can be a complex process—requiring businesses to certify the origins of their materials, the country in which the final substantial production phase took place and the value added to the good by the work and processing done in each country in the supply chain.23 Imported goods (just like goods originating within the EU) also need to comply with EU standards and regulations for product safety, which is checked at the EU’s external border posts. Goods which comply with import formalities are allowed to circulate freely in the EU.24

23.Member States can only restrict the movement of goods if their free circulation would impact on “public morality, public policy or public security; the protection of health and the life of humans, animals, plant; the protection of national treasures … or the protection of industrial and commercial policy”.25 The Government’s review of the Balance of Competences between the UK and the EU with respect to the Single Market concluded that these restrictions constitute “a closed list”, which has “been vigorously policed by the Court [of Justice of the EU]”.26

Free movement of services

24.More so than the trade in goods, trade in services is affected by non-tariff barriers regarding how the provision of services is regulated in a different territory.27 Non-tariff barriers affecting trade in services include subsidies which sustain loss-making enterprises, technical barriers to trade, and obstacles to the establishment and provision of services.28 The latter are pertinent because, in order to provide services across borders, it is often the case that the producer has to be present at the same place that the service is used by a consumer.29 Although many have commented that the Single Market in services is much less integrated than that in goods,30 the TFEU attempts to address non-tariff barriers in the following ways:

25.The EU has also developed different regulations for specific service sectors such as telecommunications, aviation, road transport, and audio-visual media services. The free movement of services is also supported by Directive 2005/36/EC, which enables service providers to have their qualifications recognised in different Member States. EU legislation on consumer rights and data protection are also vital for trade in services.34

Free movement of persons

26.The free movement of persons is enshrined in treaty provisions, secondary legislation (Directives and Regulations) and the evolving case law of the Court of Justice of the European Union (CJEU).35 EU nationals can exercise their free movement rights in two respects: first, as EU citizens, and secondly, as workers. Under Articles 18–25 TFEU and Directive 2004/38,36 EU citizens have, among others, the following rights:

27.Under Articles 45–48 TFEU, EU workers have the right to work in any Member State; to travel to any Member State to seek employment; to live in any Member State; and to claim some benefits after being employed. Article 48 allows for the co-ordination of social security payments.42

28.Although the general principle of non-discrimination on the grounds of nationality applies to all the Four Freedoms, it is particularly important for the free movement of persons, as it means that EU citizens and workers cannot be discriminated against in terms of access to opportunities, working conditions or access to benefits or entitlements on the basis of their nationality.43

29.Membership of the Single Market, often conflated with ‘full access’, is predicated upon acceptance of all Four Freedoms—and the principle of the free movement of persons in particular. The Government’s report, Alternatives to membership: possible models for the United Kingdom outside of the European Union, published ahead of the referendum, stated: “in return for full access to the EU’s free-trade Single Market in key UK industries, we would have to accept the free movement of people”.44

Free movement of capital

30.Articles 63–66 TFEU state that capital should be allowed to move without restriction between Member States, and between Member States and third countries for the purposes of investment or payment. There are some broad exemptions, such as under Article 66, to protect the integrity of national tax systems and other safeguard measures to prevent capital movement during exceptional circumstances for a period of three months.45

Enforcement

31.Member States are responsible both for transposing EU Directives into national legislation and for enforcing EU legislation domestically. If Member States fail to do either of those two things, the Commission, other Member States, companies or individuals can take legal action against them in national courts (because EU law takes primacy over national laws) and, if required, in the CJEU.46

32.In addition to the courts, other mechanisms are used by the Commission and Member States to monitor barriers to the free movement of goods and services. For example, SOLVIT is a platform that allows businesses and citizens to solve, without formal legal proceedings, problems caused by Member States not enforcing or not implementing EU legislation.47

The EU’s external trade policy

33.The EU has exclusive competence over trade policy. This requirement for a coordinated trade policy with third countries stems from the creation of the EU’s customs union, which requires Member States to agree a Common External Tariff on goods imported from outside the Union. The Common External Tariff and the EU’s exclusive competence in trade policy is formulated through the Common Commercial Policy (CCP). This is the foundation for decisions regarding tariffs on imported goods (including agricultural and industrial goods), quotas (particularly in relation to agricultural goods), and other restrictions and controls on imports and exports.48

34.Under Article 207 TFEU, the Commission can make a recommendation to the Council of Ministers that it should mandate trade negotiations with third countries or regional blocks; the Council of Ministers has to agree before any trade negotiations can begin. The Commission has to keep the European Parliament and a Committee of the Council informed of developments in negotiations, and both the Council and the European Parliament have to authorise a final trade agreement.49

35.In conducting trade negotiations, the Commission and Member States have to follow the general principles of agreed external EU action. These include support for democracy, the rule of law, human rights and sustainable development.50

36.In addition to negotiating trade agreements, the EU has the exclusive competence to investigate unfair trade practices by third countries and to propose trade defence measures to remedy any harm caused to EU businesses—including sanctions, and extra import duties on goods.51

37.Finally, the European Commission, in exercising EU competence over trade, generally represents Member States at the WTO in negotiations on rounds to reduce global tariffs or in representations on trade disputes.52

‘Access to’ versus ‘membership of’ the Single Market

38.Since the referendum, there has been considerable discussion of ‘access’ to the Single Market. We note that ‘access to’ and ‘membership of’ the Single Market are distinct concepts. Any country can trade with the countries of the Single Market, on the terms established by the EU in its schedules at the WTO. Such ‘access’ to the Single Market is currently enjoyed by, for example, the US.

39.Countries that have concluded a free trade agreement (FTA) with the EU, such as the Republic of Korea, Mexico and Switzerland, also have ‘access’ to the Single Market, but on preferential terms. Imports from countries outside the Single Market need to comply with relevant EU legislation (for example, product safety and environmental standards). The EU’s FTAs sometimes include provisions for the EU and the third country to align and recognise the equivalence of domestic rules and standards to facilitate trade.

40.By contrast, ‘membership’ of the Single Market involves all economic activity—whether or not engaged in cross border trade within the EU—being subject to the legislation established by the EU, and acceptance of the Four Freedoms. This allows highly liberalised trade with other members of the Single Market in all areas where the Single Market operates.

41.For EU Member States, ‘membership’ of the Single Market is a consequence of and coterminous with membership of the EU itself. There are two ways in which countries can participate as a member of the Single Market, while remaining outside the EU, though neither provides complete coverage. Non-EU EEA states53 are members of the Single Market in all aspects covered by the EEA Agreement, and benefit from the same liberalised trade conditions as the EU Member States. However, a number of areas fall outside the scope of this Agreement, such as agriculture and fisheries, as discussed in Chapter 3. Participation in a customs union with the EU allows Turkey to participate in the Single Market for goods; however, as discussed in Chapter 4, this is an incomplete arrangement and provides no participation in the Single Market in services.

The future trade relationship between the UK and the EU

42.Lord Price CVO, Minister of State for Trade Policy, Department for International Trade (DIT), and Lord Bridges of Headley MBE, Parliamentary Under Secretary of State, Department for Exiting the EU (DExEU), told the Committee that the Government was “looking at all the options”,54 and was “not ruling [anything] out”55 for a future trading relationship between the UK and the EU. We took these options to be:

43.We note that trading under WTO rules will also determine the basis of the UK’s trade with the rest of the world. So while the first three frameworks focus on the UK’s trading relationship with the EU (and therefore are mutually exclusive), trading under WTO rules also encompasses trade with third countries and to this extent is compatible with the other three frameworks. If the UK leaves the EU without agreement to a FTA or membership of the EEA, then the default position will be to trade with the EU under WTO rules.

44.WTO members cannot normally discriminate between their trading partners (the Most Favoured Nation principle—discussed in Chapter 6). However, Article XXIV of the General Agreement on Tariffs and Trade (GATT) and Article V of the General Agreement on Trade in Services (GATS) allow countries to offer preferential trade terms—not applied to all WTO members equally—by creating a free trade agreement or a customs union. A customs union and a free trade agreement (including in this case the EEA) are examples of this derogation from the Most Favoured Nation principle.

45.Importantly, the GATT and the GATS stipulate that such customs unions or free trade agreements must liberalise “substantially all the trade” in goods or have “substantial sectoral coverage” for trade in services.57 This means that sectoral agreements (those covering just telecoms, for example) are not legal under the rules of the WTO. We note that these conditions have rarely been raised in dispute settlement procedures at the WTO, have been poorly enforced, and there is considerable uncertainty over the definition of “substantially all”.58 Nonetheless, the UK Government is a member of the WTO and thereby bound by the rules laid out in the GATT and the GATS, which restrict the parameters of the deal the Government will be able to negotiate with the EU.

46.Lord Bridges said the Government was pursuing a “bespoke UK agreement”, rather than a fixed model, because “we perceive ourselves as being in a unique position as regards the EU”.59 The Government wanted an agreement that would allow the UK to “control our borders and our laws” and provide “the freest possible relationship as regards trade for our businesses”.60 We note that the process for agreeing a bespoke arrangement and what it would contain are unclear.

47.More broadly, Lord Price said the Government believed that “open and free trade, the reduction of tariffs and making sure that there is mutual recognition of standards all help business perform better”. He said free trade helped to “reduce the costs of doing business” to the “benefit of consumers”, and that this was “what we want to promote”.61

48.The comments of Lord Bridges and Lord Price prompt a number of questions. It cannot, for instance, be guaranteed that the other 27 Member States will embrace the same objectives as the UK—and the UK will be unable to formally gauge their views until it has invoked Article 50. These views are likely to shift over the coming months due to forthcoming referendums and elections within Member States. Even if the EU-27 did embrace the same objectives as the UK, negotiating such an agreement could take several years, raising the question of transitional arrangements. We have therefore had to adopt an open mind, and the following chapters consider all four potential frameworks for UK trade with the EU after Brexit, and the ways in which they could be altered to better meet the UK’s interests and reflect a bespoke outcome. Each is considered on a stand-alone basis, although as noted above trading under WTO rules is of wider significance, as it forms the basis for the UK’s trade with all countries.

49.We have sought to provide information on the process of adopting each framework, the broad implications they might have, and risks they might pose for trade with the Single Market and with third countries. We have set out the wide range of issues the Government will need to consider, and some of the questions that it will need to address, in determining its negotiating position on future trade arrangements with the EU. We set out the implications of each framework for the regulation of goods and services in the UK and the UK’s trade with third countries. We recognise more detailed work is required—this report does not make detailed economic assessments of each framework. A sector-by-sector analysis will be the focus of three forthcoming reports, on future UK-EU trade in goods, on trade in services, and on trade in financial services.

Conclusions and recommendations

50.It is important to distinguish between ‘access to’ and ‘membership of’ of the Single Market. Many countries have access to the Single Market through trade agreements and the rules of the WTO. Only EU Member States have full membership of the Single Market—setting, implementing and enforcing all the EU’s rules to enjoy highly liberalised trade in all the areas that the Single Market operates.

51.We note that the Government’s aspiration, to secure a bespoke agreement with the EU which ensures open and free trade and control over the UK’s borders and laws, is in tension with the fundamental principles of the Single Market—which require members to accept all the Four Freedoms, including the free movement of persons.

52.Moreover, the Government’s desire for a bespoke deal will also need to be compatible with the rules of the WTO, where the General Agreement on Tariffs and Trade (GATT) and the General Agreement on Trade in Services (GATS) prohibit trade agreements focused only on one sector.

53.The Single Market includes clear mechanisms through which to implement, enforce and handle disputes about the rules that govern trade between its members. When the Government is evaluating the different frameworks for trade between the UK and the EU, it should consider what mechanisms it will find acceptable to handle possible future disputes.


9 Article 3(1)(e) and Article 207, Treaty on the Functioning of the European Union, OJ C 326 (consolidated version of 26 October 2012); These trade agreements can contain provisions on trade in goods, services, commercial aspects of intellectual property, foreign direct investment and investment provisions.

10 The Office for National Statistics noted that exports from the UK to EU and non-EU countries grew on average by 3.6% and 6.5% respectively in each year between 1999 and 2014. The UK’s stronger export growth to non-EU countries resulted in the proportion of UK exports to the EU falling from 54.8% in 1999 to 44.6% in 2014. Growth in the value of UK imports of goods and services from EU and non-EU countries grew on average by 4.7% and 5.5% respectively in each year from 1999 to 2014. Office for National Statistics, ‘How important is the European Union to UK trade and investment?’: http://webarchive.nationalarchives.gov.uk/20160105160709/http://www.ons.gov.uk/ons/rel/international-transactions/outward-foreign-affiliates-statistics/how-important-is-the-european-union-to-uk-trade-and-investment-/sty-eu.html [accessed 28 November 2016]

11 The Office for National Statistics noted that between 1999 and 2014, goods imported by the UK from the EU rose by 4.9% per year on average, compared to exports which rose by 2.5% per year. The UK’s trade in services balance with the EU is much more favourable, with a surplus in each year since 2005. Office for National Statistics, ‘How important is the European Union to UK trade and investment?’

12 The term ‘Single Market’ expresses the idea that national markets are merged into one. The treaties originally referred to the ‘common market’, but this was replaced with the Treaty of Lisbon by reference to the ‘internal market’, which is now defined in Article 26 (2), Treaty on the Functioning of the European Union. We use these terms synonymously in this report.

13 HM Government, Review of the Balance of Competences between the United Kingdom and the European Union: the Single Market (July 2013), p 20: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/227069/2901084_SingleMarket_acc.pdf [accessed 22 November 2016]

14 Tariffs are taxes or duties which are applied to imports or exports, while non-tariff barriers are all barriers to trade that are not tariffs, usually bureaucratic or legal issues that can hinder trade between countries. OECD, ‘Glossary of statistical terms—tariff’: https://stats.oecd.org/glossary/detail.asp?ID=2647 [accessed 22 November 2016]; OECD, ‘Glossary of statistical terms—non-tariff barriers’: https://stats.oecd.org/glossary/detail.asp?ID=1837 [accessed 22 November 2016]

15 HM Government, Review of the Balance of Competences between the United Kingdom and the European Union: the Single Market (July 2013), p 20 and p 28. The principle of Mutual Recognition first arose in the Cassis de Dijon Case where the company Rewe-Zentral AG sought to import a liqueur from France into Germany but was forbidden to do so because of a German law forbidding the sale of spirits with an alcohol content of less than 32%—the liqueur they wished to import was only 15-20%. In this case, the CJEU ruled that barriers to free trade within the Community included national rules which had the effect of hindering intra-community trade.

16 Europe Economics, Optimal Integration in the Single Market: A Synoptic Review (April 2013), pp 13-14: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/224579/bis-13-1058-europe-economics-optimal-integration-in-the-single-market-a-synoptic-review.pdf [accessed 22 November 2016]

17 Institute for Fiscal Studies, The EU Single Market: the Value of Membership versus Access to the UK (August 2016), p 11

18 National Institute Economic Review No. 236, quoted in Ibid., p 16

20 Countervailing measures refer to measures that can be undertaken whenever an investigation, by the investigating authority of the importing country, has led to the determination that the imported goods are benefiting from subsidies, and that they result in an injury. They may take the form of countervailing duties or undertakings by the exporting firms or by the authorities of the subsidising country. OECD, ‘Glossary of statistical terms—countervailing measures’: https://stats.oecd.org/glossary/detail.asp?ID=460 [accessed 22 November 2016]

21 HM Government, Review of the Balance of Competences between the United Kingdom and the European Union: the Single Market (July 2013), p 22

22 HM Government, Review of the Balance of Competences between the United Kingdom and the European Union: Trade and Investment (February 2014), p 74 https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/279322/bis_14_591_balance_of_competences_review_Trade_and_investment_government_response_to_the_call_for_evidence.pdf [accessed 22 November 2016]

23 The rate of duty that must be applied to imported and exported goods depends on three elements: the type of good, the country the goods are being imported into and where they are judged to have ‘originated’ from. There are two main categories of origin rules 1) goods wholly obtained or produced in a single country and 2) goods whose production involves raw materials from more than one country. HM Revenue & Customs, Guidance: Rules of origin for imported and exported goods (6 August 2012): https://www.gov.uk/guidance/rules-of-origin [accessed 22 November 2016]

26 HM Government, Review of the Balance of Competences between the United Kingdom and the European Union: the Single Market (July 2013), p 22

27 According to the OECD, non-tariff barriers refers “to all barriers to trade that are not tariffs. Examples of these include countervailing and anti-dumping duties, ‘voluntary’ export restraints, subsidies which sustain in operation loss making enterprises, technical barriers to trade, and obstacles to the establishment and provision of services.” OECD, ‘Glossary of statistical terms—non-tariff barriers’: https://stats.oecd.org/glossary/detail.asp?ID=1837 [accessed 22 November 2016]

28 OECD, ‘Glossary of statistical terms—non-tariff barriers’: https://stats.oecd.org/glossary/detail.asp?ID=1837 [accessed 22 November 2016]

29 HM Government, Review of the Balance of Competences between the United Kingdom and the European Union: the Single Market (July 2013), p 24

30 HM Government, Review of the Balance of Competences between the United Kingdom and the European Union: the Single Market: Free Movement of Services (Summer 2014), p 6: https://www.gov.uk/government
/uploads/system/uploads/attachment_data/file/332668/
bis-14-987-free-movement-of-services-balance-of-competencies-report.pdf
[accessed 28 November 2016]

31 Ibid.

32 Ibid. The freedom of establishment for persons is considered to complement the free movement of workers.

33 Ibid.

34 Directive 2005/36/EC, 7 September 2007, on the recognition of professional qualifications, OJ L 255

35 Ibid., p 23

36 Directive 2004/38/EC, 29 April 2004, on the right of citizens of the Union and their Family members to move and reside freely within the territory of the Member States, OJ L 158

37 European Commission, ‘Movement and residence’: http://ec.europa.eu/justice/citizen/move-live/index
_en.htm
[accessed 23 November 2016]

38 Ibid.

39 Ibid.

40 Ibid.

41 HM Government, Review of the Balance of Competences between the United Kingdom and the European Union: the Single Market (July 2013), pp 23-24

42 Ibid., p 24

43 Ibid., p 23

44 HM Government, Alternatives to membership: possible models for the United Kingdom outside the European Union (March 2016), p 5: https://www.gov.uk/government/uploads/system/uploads/attachment_data/
file/504661/Alternatives_to_membership_
possible_models_for_the_UK_outside_the_EU_Accessible.pdf
[accessed 23 November 2016]

45 HM Government, Review of the Balance of Competences between the United Kingdom and the European Union: the Single Market (July 2013), p 26

46 Ibid., p 30

47 Ibid., p 31

48 HM Government, Review of the Balance of Competences between the United Kingdom and the European Union: Trade and Investment (February 2014), p 25

49 Ibid., p 26

50 Ibid., p 28

51 Ibid., p 33. The EU’s trade defence measures are given effect through Implementing Acts, which are considered by experts on the Commission’s Trade Defence Instruments Committee. This Committee can advise on proposed measures before these are considered by Member States (the advisory procedure); or they can impose defence measures (through the examination procedure). The imposition of trade defence measures can be appealed to a separate Committee which represents both the Commission and Member States. European Commission, The Trade Defence Instruments Committee (October 2015): http://trade.ec.europa.eu/doclib/docs/2013/april/tradoc_151013.pdf [accessed 23 November 2016]

52 Ibid., p 31

53 The EEA comprises the 28 EU Member States, and the three members of EFTA which have signed the EEA Agreement, namely Iceland, Lichtenstein and Norway. We refer to the three countries as ‘non-EU EEA states’ and ‘non-EU EEA members’ in this report.

56 The EEA comprises the 28 EU Member States, and the three members of EFTA which have signed the EEA Agreement, namely Iceland, Lichtenstein and Norway. We refer to the three countries as ‘non-EU EEA states’ and ‘non-EU EEA members’ in this report.

57 Article XXIV:8, General Agreement on Tariffs and Trade 1994: https://www.wto.org/english/res_e/booksp_e/analytic_index_e/gatt1994_09_e.htm [accessed 23 November 2016]; Article V:1(a), General Agreement on Trade in Services: https://www.wto.org/english/docs_e/legal_e/26-gats_01_e.htm [accessed 23 November 2016]

58 Tevini, ‘Article XXIV of the GATT’, in WTO–Trade in Goods ed. by Wolfrum, Stoll, Hestermeyer (Brill, 2011). We note that Switzerland’s multiple bilateral agreements with the EU, when considered in their entirety including the 1972 EU-Switzerland FTA, are sufficiently comprehensive to be compliant with the requirements of the GATT and the GATS.

60 Q 40 (Lord Bridges of Headley)




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