With the UK’s formal exit from the EU looming up on 29 March 2019, the government has applied to join the World Trade Organisation’s procurement agreement, a necessary action if the nation wants to maintain and develop its trading relationships with WTO members.
Presently, Britain is an automatic member of the WTO as it is part of the EU. After it leaves the bloc, however, this new relationship will allow UK firms to bid for government projects in Japan, the EU and the US.
Britain and EU have submitted letters to the regulatory body, although the former has yet to confirm the degree to which it would open its markets for overseas businesses in exchange for WTO membership.
The organisation comprises 46 member countries which have access to each other’s markets. It is estimated that these member nations spend close to $1.7tn on an annual basis. As China is hoping to join the group, this will open up a vast new market to Britain and other WTO members.
Britain had earlier stated that it should not face an issue to rollover its membership as other nations would want to access the country’s procurement market. In addition to this, a trade official from the UK stated in March that the country had already submitted a draft offer to other member states with the aim to minimise any fallout from Brexit.
In 2017, Roberto Azevedo, Director General of the WTO, opined that Brexit could be extremely problematic and the severity of negotiating a place in the group would depend on the deal Britain strikes with the EU.
The UK was optimistic that it would not have an issue getting a deal with the WTO. However, this optimism came to nought after disagreements about agriculture, the one area where EU suppliers lost the flexibility they had when Britain was part of the 28-nation bloc.
Clearly, there is much work to be done. Nevertheless, the government’s optimism and determination to join the WTO, coupled with the procurement and strategic sourcing benefits of a close trading relationship with Britain, suggests exciting opportunities in the years ahead.
Nick has over 30 years procurement experience in consulting, outsourcing and line roles within industry with international experience across many sectors and industries and led many procurement programs with blue chip organisations.