Britain asks to join WTO procurement deal in latest Brexit step

GENEVA (Reuters) - Britain has officially applied to join the World Trade Organization’s government procurement agreement, a legal step it needs to take to maintain trading relationships after it leaves the European Union on March 29, 2019.

FILE PHOTO: Anti-Brexit demonstrators wave EU and Union flags outside the Houses of Parliament in London, Britain, January 30, 2018. REUTERS/Toby Melville/File Photo

Staying in the WTO is potentially important so that British companies can still bid for government work in the United States, European Union and Japan. Britain is a member of the agreement now only by virtue of its EU membership.

In letters published by the WTO on Tuesday, the EU and British ambassadors said Britain would make an offer on the degree to which it was willing to open its own procurement markets in return for continued membership.

The 46 countries in the agreement have liberalised access to each other’s markets, with an estimated $1.7 trillion annual spend. China is hoping to join, which could add a further incentive for membership.

British officials have previously said that rolling over membership of the agreement should be relatively easy, since there was an incentive for other members to retain their access to Britain’s procurement market, too. But any negotiation in the WTO can be an opportunity to make new demands.

A British trade official told Reuters in March that a draft offer had already been circulated, part of a strategy of trying to minimise the disruption of Brexit at the WTO.

The Geneva-based WTO is already in crisis because of a potential global trade war and a U.S. block on new judicial appointments.

WTO Director-General Roberto Azevedo said last year that Brexit was going to be “a bumpy road”, but just how bumpy would depend on many things, including negotiations with the EU.

British hopes for a smooth transition at the WTO have already been dashed by disagreement in agriculture, where major suppliers are unhappy with losing the flexibility they have enjoyed with the EU as one market of 28 countries.

European Trade Commissioner Cecilia Malmstrom told Reuters in Geneva on Monday that the agriculture question was still unresolved.

“There is no progress on agreeing the terms of Brexit (at the WTO),” she said.

Reporting by Tom Miles, editing by Larry King