If Brexit talks break down and Britain walks away from the EU without a deal, here’s a look at the rules and regulations that will manage how the UK trades with the rest of the world.
The World Trade Organisation sets out the default rules for how nations trade with each other.
Most countries have agreements with each other which are contracts that lay out the terms and conditions of international trade.
If a deal is not agreed or governments argue the deal is broken, the World Trade Organisation steps in to sort out the conflict.
What does the WTO do?
The WTO has several roles. The main function is managing a global network of trade rules. The group also helps countries negotiate trade deals and arbitrates in disputes, having a final say if no agreement can be reached.
Who runs the WTO?
The WTO is an umbrella group run by member governments and has a staff of more than 600 people who smooth the wheels of international commerce.
Who sets trade tariffs and ensures fair play?
This is the job of the WTO. Every member government must give the WTO full details of their trading policies, which are examined to make sure they are fair.
The WTO has a set of default tariffs that come into play if two or more nations cannot agree trading terms and conditions with each other.
These tariffs would apply if the UK fails to agree a trade deal with the EU – and they would work both ways, applying to EU goods and services exported to the UK as well as British goods and services destined for Europe.
What are trade tariffs?
Trade tariffs are the customs duties applied to goods and services entering a country.
Why do countries have trade tariffs?
The aim is to set a tariff that does not give imports a cost advantage against locally produced goods. Tariffs also give governments the opportunity to raise finance.
Why would a Brexit no deal be so bad?
Because on March 2019, British exporters would have to pay more to send their goods to customers in the EU, which would raise the cost of their goods and services, making them less competitive in the market.