For over 7.5 billion people in the world, “the World Trade Organization (WTO) model”, if it means anything at all, signifies the set of rules overseen by the WTO that have largely governed world trade since the Second World War. To 60 million people in the United Kingdom, on the other hand, it means what happens if their government fails to reach a trade agreement with the European Union by the end of the transitional period foreseen in the Withdrawal Agreement, and their mutual trade is governed by WTO rules alone. Such an outcome is also often known as “no deal” and this chapter is mostly about the implications and consequences of that outcome. I start, however, by outlining what WTO rules in general mean.

THE WTO

The WTO came into operation on 1 January 1995, following the conclusion of the 1986–94 Uruguay Round of trade talks held under the auspices of the the General Agreement on Tariffs and Trade (GATT). It is an international organization with 164 members and codifies the rules for international trade in goods (the GATT), services (the General Agreement on Trade in Services, GATS) and intellectual property (Agreement on Trade-Related Aspects of Intellectual Property Rights, TRIPS), and supports a dispute settlement procedure and a monitoring function. In addition, it has a number of side agreements such as the Trade Facilitation Agreement and the Government Procurement Agreement.

The GATT, the WTO's intellectual and operational forerunner, arose in 1947 as a means to achieve trade liberalization following the Second World War. Recognizing that the protectionism and competitive devaluations of the 1920s and 1930s had exacerbated the slump and that trade tensions had contributed to the war itself, the USA led 21 other countries to a more liberal but rules-based system than had pertained previously. There had initially been hopes for an International Trade Organization (ITO) which would have had extensive and far-reaching powers to manage world commerce, but the Americans eventually felt this a bridge too far and let plans for the ITO fail. The GATT was a temporary agreement (a treaty, not an international organization, as were the International Monetary Fund and the World Bank) designed just to let desired levels of trade liberalization proceed with sufficient international oversight to make them credible.