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Brexit Talks Will Be Tough

Roberto AzevedoRoberto Azevedo

Trade deals between the UK and European Union post-Brexit are likely to be “tough”, the head of the World Trade Organization told CNBC.

Speaking at the Web Summit technology conference in Lisbon, Roberto Azevedo, the director-general of the WTO, said creating trade deals after Brexit will be “very complex”.

“A lot of it will depend on the terms that the two parties will come to. The UK on the one side, the EU on the other,” Azevedo said.

“As far as the WTO is concerned, we don’t come into the picture until those two have decided what the commitments they will have with the other WTO members will be and with each other. Until then, when they come to the WTO and say, ‘this is my new list of commitments’…at that point we then step in.”

“Until then it will be a bilateral conversation that will be very complex.”

A so-called “hard Brexit” would be where the UK loses access to the EU’s single market and defaults back to World Trade Organization rules. In a “soft Brexit” scenario, the UK would retain some form of membership to the single market.

While the UK continues to be a member of the EU, it is unable to negotiate its own trade deals. But under the scenario of a “hard Brexit”, this could change. UK Trade Secretary Liam Fox said earlier this year that Brexit was a “golden opportunity” for Britain to trade with the rest of the world.

 London Off the Mark

The WTO chief said, it was hard to know the outcome of Britain’s path to exit the EU but negotiating trade deals will be tough.

“The first thing we need to do is define what a hard Brexit is...I think that the less turbulence you have in this process the better. So if we can maintain the kind of relationship that exists today, so much the better. But that’s much easier said than done. It will be a tough negotiation,” Azevedo said.

Meanwhile, Ireland Inc. has this message for UK Prime Minister Theresa May’s government: When it comes to Brexit, you don’t know what you’re doing.

Irish executives lashed the UK over its preparations for talks on leaving the European Union, after Enterprise Minister Mary Mitchell O’Connor told lawmakers in Dublin that British negotiators have no clear road map.

 “What worries me about Brexit is the UK government clearly has no idea what it is doing,” Ryanair Holdings Plc Chief Executive Officer Michael O’Leary said in an interview with Bloomberg Television on Monday. “It has no agenda in terms of negotiations.”

 

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