Past Event

Brexit and trade: what EU and WTO rules imply

Bruegel in collaboration with Leuven Centre For Global Governance Studies organizes an event at which we will discuss the options for redesigning trade relations in the post-Brexit era.

Date: February 6, 2017, 12:00 pm Topic: European Macroeconomics & Governance


Ahead of the UK triggering the Article 50 in the course of next month, it became crucial to assess the impact of Brexit on trade. Brexit will not only affect EU-UK’s trade policies, but it will also have an impact on global trade. The aim of that event was therefore to analyze what the Brexit will mean for the UK and the EU in terms of legislation and trade negotiations.

Andre Sapir launched the event with a short presentation mentioning what kind of problems would potentially arise from an EU perspective. According to him, the UK will leave the Customs Union (CU) which means that negotiations will turn around a Free-Trade Agreement (FTA). However, such an agreement requires customs controls due to the rules of origin and will therefore slow the overall flows of trade between UK and EU. UK and EU are likely not to adopt the same tariff schedules and will need border adjustments.

Petros Mavroidis discussed more in details the legal procedure implied by Brexit. There will be two rounds of trade negotiations: the UK will negotiate with the EU and then will negotiate with the rest of the world (within WTO). From an EU perspective, his proposal is the following: the EU-27 should adopt the EU-28’s tariff schedule and let the UK negotiates and deals with its own quotas at the WTO. He added that WTO cares only about FTAs and CUs, but not about the different scales of integration. It means that UK-EU can negotiate an agreement without worrying too much about WTO rules. From a UK perspective, real problems will come from the fact that by leaving the EU, it leaves an entity that has trade agreements with the rest of the world. The UK will therefore have to adjust the EU existing schedule and re-negotiate its own trade agreements which might lead to retaliation from third countries (even if the overall risk of retaliation is low).

Jan Wouters highlighted that Article 50 is not about trade, it’s all about a divorce. According to him, the process for the Withdrawal Agreement (WA) will take less than two years. However, negotiating a trade agreement will take much more time for two main reasons: first, starting discussions about a trade agreement while the WA has not even been agreed is almost illegal and second, examples such as CETA show that the standard procedure for trade negotiations takes much more than two years. Finally, as long as the UK is still a Member State, it is supposed not to be able to negotiate trade agreements with third countries. However it should be manageable and feasible to allow the UK to start having explanatory talks in order to future trade negotiations faster.

Hosuk Lee-Makiyama argued that the future of EU-UK relationships cannot be predicted based on previous negotiations like CETA since the divorce settlement is going to be based on the dynamics of status quo. He added that the only deadline that matters is the elections which will impact the future of the Tory party. He also stated that we cannot write off so quickly the possibility of a CU. First, the rules of origin do matter and the damages implied by breaking the regional supply chain will be considerable. Second, the other three freedoms barely exist and the services won’t experience true disruption after the Brexit. When the time for negotiations with third countries will come, he argued that UK and EU will have to sit on the same side of the table. When negotiating Tariff Rate Quotas (TRQs), third countries won’t be just satisfied by the UK and the EU splitting the quotas because they would lose flexibility. Finally, since previous negotiations were all about making associations, the EU faces now one big political challenge: defining what leaving the Union means.

The questions from Viktoria Dendrinou and the floor discussed further the CETA example and the implications of small countries trying to leverage their power through institutions on trade agreements, the threat of blocking from third countries regarding TRQs, the cases of Turkey and Ukraine as potential models for a future UK-EU agreement, the supremacy of EU-law model and the effectiveness of international law.

Notes by Justine Feliu

Video and audio recording

Event materials

Petros Mavroidis – Presentation

André Sapir – Presentation

Jan Wouters – Presentation



Feb 6, 2017


Check in and lunch


Panel Discussion

Chair: Viktoria Dendrinou, Reporter, Bloomberg

Petros C. Mavroidis, Edwin B. Parker Professor of Foreign & Comparative Law, Columbia University

André Sapir, Senior Fellow, Bruegel

Prof. Jan Wouters, Director, Leuven Centre for Global Governance Studies - Institute for International Law, KU Leuven



Hosuk Lee-Makiyama, Director, ECIPE



Chair: Viktoria Dendrinou, Reporter, Bloomberg




Viktoria Dendrinou

Reporter, Bloomberg

Hosuk Lee-Makiyama

Director, ECIPE

Petros C. Mavroidis

Edwin B. Parker Professor of Foreign & Comparative Law, Columbia University

André Sapir

Senior Fellow, Bruegel

Prof. Jan Wouters

Director, Leuven Centre for Global Governance Studies - Institute for International Law, KU Leuven

Location & Contact

Bruegel, Rue de la Charité 33, 1210 Brussels

Matilda Sevon

Read article More on this topic

Blog Post

Brexit, phase two (and beyond): The future of the EU-UK relationship

Whether it looks more like ‘CETA-plus’ or ‘EEA-minus’, the trade deal that emerges from phase two of the Brexit negotiations should not be the limit of ambition for future partnership between the EU and the UK

By: Maria Demertzis and André Sapir Topic: European Macroeconomics & Governance Date: December 13, 2017
Read about event More on this topic

Past Event

Past Event

The impact of Brexit for Research & Innovation in Europe

This event featured a new and interactive format, with a restricted and high-level on-site audience and in parallel, it has been livestreamed on our website to remain public and attract the widest participation.

Speakers: Alastair Buchan, Matt Dann, David Earnshaw, Kurt Deketelaere, Maryline Fiaschi, Martin Muller, Christian Naczinsky and Reinhilde Veugelers Topic: Innovation & Competition Policy Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: December 12, 2017
Read article More on this topic

Blog Post

Promoting intra-regional trade in the south of the Mediterranean

Regional integration is still a sure way for economies in development to achieve economic growth on the global market. The south of the Mediterranean has still a low level of intra-regional trade integration, dominated by some overlapping trade agreements and political instability. The EU has the opportunity to play a decisive role, promoting and coordinating the process.

By: Filippo Biondi and Maria Demertzis Topic: European Macroeconomics & Governance Date: December 6, 2017
Read article More by this author

Blog Post

The European Union with the Community of Latin America and the Caribbean: where do we stand?

Latin American and Caribbean countries have deep historical, political, cultural, and economic ties with Europe, and cooperation between the two regions has been intensifying recently. Here we report some of the main trends in trade, foreign direct investment, and agreements between the European Union and The Community of Latin American and Caribbean States, the European Union’s official counterpart in the bi-regional strategic partnership that commenced in 1999.

By: Francesco Chiacchio Topic: European Macroeconomics & Governance, Global Economics & Governance Date: December 5, 2017
Read article More on this topic More by this author


Brexit: When the banks leave

More than a tenth of the City’s business is now bound to go, but how much worse could things get?

By: Nicolas Véron Topic: Finance & Financial Regulation Date: December 1, 2017
Read article More by this author

Blog Post

The impact of Brexit on the Irish energy system – pragmatism vs. principles

Brexit promises pain for Ireland that could be cut off from the EU internal market and be left exposed to market instability in the UK. Georg Zachmann assesses the scale of the possible damage for Ireland, and how the UK and EU might use the special energy relations on the Irish island to commit to a pragmatic solution.

By: Georg Zachmann Topic: Energy & Climate, European Macroeconomics & Governance Date: November 21, 2017
Read article Download PDF More on this topic

External Publication

Central Asia—twenty-five years after the breakup of the USSR

Central Asia consists of five culturally and ethnically diverse countries that have followed different paths to political and economic transformation in the past 25 years. The main policy challenge for the five Central Asian economies is to move away from commodity-based growth strategies to market-oriented diversification and adoption of a broad spectrum of economic, institutional and political reforms

By: Marek Dabrowski and Uuriintuya Batsaikhan Topic: Global Economics & Governance Date: November 14, 2017
Read article Download PDF

Policy Contribution

A ‘twin peaks’ vision for Europe

The organisation of the European Supervisory Authorities (ESAs) is based on a sectoral approach with one ESA for each sector, with separate authorities for banking, insurance and securities and markets. But is this sectoral approach still valid? This Policy Contribution outlines a long-term vision for the supervisory architecture in the European Union.

By: Dirk Schoenmaker and Nicolas Véron Topic: European Macroeconomics & Governance, Finance & Financial Regulation Date: November 13, 2017
Read about event More on this topic

Past Event

Past Event

A conversation on USA economic policy with Kevin Hassett

This is an invitation-only event for Bruegel's member and for a selected number of experts.

Speakers: Kevin Hassett Topic: Global Economics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: November 9, 2017
Read article More on this topic More by this author

Blog Post

The Bank of England’s dovish hike

For the first time since 2007, the Bank of England raised interest rates, with a hike of 25 basis points. At the same time, it provided forward guidance that outlines a very gradual path for future increases. We review the economic blogosphere’s reaction to this decision.

By: Silvia Merler Topic: European Macroeconomics & Governance Date: November 6, 2017
Read article More on this topic More by this author

Blog Post

Falling Pound might not bring UK trade balance boost

The Pound Sterling depreciated by 14% against a basket of world currencies in the four months after the referendum vote to leave the EU. A number of pundits claimed that this would improve the UK trade balance and boost the economy. But the data do not show any visible improvement in the trade balance to date. Could it be that currency depreciations have less impact on trade balances than before?

By: Nicholas Branigan Topic: European Macroeconomics & Governance Date: October 31, 2017
Read article More on this topic More by this author

Blog Post

EU borders: walking backwards from Northern Ireland to Cyprus

The Good Friday agreement put to rest age-old conflicts on Ireland. It also offered hope that the reunification of Cyprus might be possible within the European Union. Lately, however, the “Green Line” that divides the easternmost island of the EU, is viewed as a template for a soft border at the westernmost island of the Union after Brexit.

By: Stavros Zenios Topic: European Macroeconomics & Governance Date: October 25, 2017
Load more posts