Brexit as Trade Governance

Following the 2016 referendum on its continued membership of the European Union (EU), the United Kingdom (UK) is now withdrawing from, and negotiating a new relationship with, the EU. Both the UK’s exit and future relationship with the EU must conform to World Trade Organization (WTO) rules. The WTO’s rules are only partial and were not designed to facilitate a state’s withdrawal from a regional trade agreement, the contraction of an area of liberalized trade, nor the (re)emergence of ‘protectionist’ trade barriers. The EU and UK must transcend this problem by creating legally binding rules in an otherwise vacant legal space. Yet Brexit is a shock to the WTO’s rules and ethos: diplomatic negotiation is augmenting and replacing regulation in ways that affect the WTO, and the bilateral and multilateral agreements to which the EU and UK are both parties. This shock is a fundamental change to the prevailing trade orthodoxy.