Britain will comply with the rules on subsidies of the World Trade Organization (WTO) once its exit from the European Union is complete by the end of the year. Business minister Alok Sharma confirmed this on Wednesday, assuring that Britain will not adopt a ‘picking winners’ approach.
Meanwhile, there’s a disagreement on Britain’s future relationship with the European Union due to Britain’s level of willingness to use state resources to help firms and industries in the post-Brexit period.
The EU is concerned that Britain might use subsidies to establish competitive leverage over its members. However, Britain is adamant that it will be an independent state and that it can decide its own course.
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“Our guiding philosophy remains that we do not want a return to the 1970s approach of winning and bailing out unsustainable companies with taxpayers’ money. The United Kingdom must have flexibility as an independent, sovereign nation. This is important for intervention needed to protect jobs and support new and emerging industries,” Sharma said in a statement.
Britain to follow WTO
Britain confirmed it would follow WTO rule in establishing its elaborate policy goals on subsidy for the first time. Furthermore, it went on to describe them as “an internationally recognized common standard for financial assistance. Only governments and public authorities can grant this to companies.”
This declaration comes on the same day that Britain released legislation that violates international law. The declaration also alters the terms of the divorce deal in Brexit unilaterally. Besides, the decision happens to crash the talks on future relationship into a catastrophe.
The WTO rules apply to goods only and prohibit subsidies that depend on either the export rate of a company or the use of domestic goods in favor of imports, said the Government. The WTO also provides a dispute settlement mechanism for countries.
