Who actually trades solely under WTO rules?
The likelihood of the UK crashing out of the EU seems to be increasing with every step of the negotiation.
For those of us that believe in the merits of the EU, this would be a disaster, but the counter point used by some opponents of the EU is that, even if we leave with no deal, we can fall back onto the tariffs agreed under the World Trade Organisation
Recently, the pro-brexit group Leave.EU shared an image sharing a claim made by Richard Tice. “WTO rules are what most great countries trade under. If it’s good enough for Australia, America and Canada, it’s good enough for the UK”
When I saw this, I was a little skeptical. I know that America and Canada are both in a Free Trade Area with Mexico, and Canada’s Free-Trade agreement with the EU has only just come into effect. I wasn’t too sure about Australia, but I looked it up. Turns out they have free-trade agreements with China, South Korea, the USA, New Zealand and others. Couldn’t Mr Tice have come up with a better example?
For a geek like me who likes data, that seemed a like an interesting question: What is the biggest economy that does not have any Free Trade agreements other than membership in the WTO?
I figured this would be pretty easy. All I needed was to bring up the list of countries by GDP, and then search on Google for that country and the phrase “Free Trade agreement”
I got to number 20 (Saudi Arabia — a member of the Greater Arab Free Trade Area) before I got bored. Remembering Larry Wall’s first virtue (laziness) I decided to spend two hours writing a script to find the data for me rather than one hour going through the data.
Non-techies, please feel free to skip this section
So while Googling, I came across the WTO website which, it turns out, has a database of trade-agreements that member countries have notified them of. Unfortunately you can’t run arbitrary queries on the database, but luckily the countries were all referred to by their ISO-3166 numeric codes, therefore, if I took a list of countries, I could downloaded each one and read the list of agreements. For this I use the BeautifulSoup library and inserted the data into some simple Django models I created. I have uploaded the source code to GitHub in case anybody wants to play around with it.
Once I had the data, I could write a query to return all the countries that lacked any agreements. Upon running it, I found that many of the returned countries weren’t actually countries at all, but dependent territories like Bermuda and Puerto Rico. I therefore manually removed these. I was then left with this list:
- Holy See
- Sao Tome and Principe
- South Sudan
- Western Sahara
However again, I knew this wasn’t right Serbia and Montenegro are both members of CEFTA, so I investigated further. It turns out that neither are a member of WTO, which is why they have not notified the WTO of their agreements. So I then compared this list with a list of WTO members and removed any that were not members.
The next step would have been to order these by GDP, but that turned out to be unnecessary, as there is only one country in the world that trades only under WTO rules. That country:
For those of you not familiar with Mauritania, it’s GDP is $4,714million (0.2% of the UK’s), 50% of its exports consist of Iron Ore, and between 1% and 17% of the population still live in slavery.
It appears that this is the country that Leave.UK wish to emulate. I am afraid that this is not a vision for Britain’s future that I can share.
Others (thank you Alan Bell et al.) have take my work and investigated Mauritania further. It turns out that while they don’t have any current bilateral or multilateral free trade deals, it does benefit from preferential treatment from certain developed nations (the EU amongst them), where Mauritania’s exports in certain categories (everything but arms) are not charged import duties, but those countries goods can have tariffs added when being imported into Mauritania. As this is a form of aid for a developing country, I think that it is not something that the UK is likely to obtain, so for the purposes of debate referring to “no deal” as the “Mauritania Option” is not entirely inaccurate and could be a useful shorthand.
 Though by no means all, the Leave Alliance for example describe a no-deal as “akin with performing separation surgery on conjoined twins with a hammer and chisel without anaesthetic, hoping that the weaker one will live.”