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Trade will flourish without Brexit deal, says WTO candidate

Hamid Mamdouh - Denis Balibouse/REUTERS
Hamid Mamdouh - Denis Balibouse/REUTERS

Trade between the UK and European Union would still flourish in the short term even without a Brexit deal, according to a candidate seeking to run the World Trade Organization.

The historic alliance of Britain and the bloc and their regulatory ties should allow goods and services to continue flowing across borders according to Hamid Mamdouh, a former WTO director of trade in services and investment who is Egypt's candidate to run the organisation.

The commerce regulator’s 164 members have until July 8 to nominate a replacement for Roberto Azevedo, who announced his surprise resignation in May.

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Speaking to broadcaster Econ Films’ CoronaNomics programme, Mr Mamdouh said: “The UK and the EU have been following the same regulatory framework across sectors of the economy and that provides an exceptionally strong basis for strong and close trade relations, even if they fall on WTO rules.

“There will still be the reality of business flourishing in a way that, of course, isn’t as strong as when the UK was a member state of the EU, but it’s the passage of time without a bilateral agreement that will have an effect.”

He added that the strength of the UK's world-leading service sector would soften the blow of adjusting to a new trading relationship. It accounts for 80pc of British GDP.

Mr Mamdouh said: "The UK is a huge player on the world stage of services – big sectors like financial services, telecommunications, all this sort of modern, technologically-enabled services sectors, not to mention even some of the traditional ones like tourism and others.

“I perhaps don't see that the UK would lose as much on the services side as it would on the merchandise side if we reach the end of the year and then fall back on WTO terms.”

Lord Mandelson, a Labour peer and former EU trade commissioner who has also expressed an interest in replacing Mr Azevedo when he departs at the end of August, said the UK would pay an “enormous price” if it trades with the EU on WTO terms.

Roberto Azevedo - SALVATORE DI NOLFI/EPA
Roberto Azevedo - SALVATORE DI NOLFI/EPA

“Coming on top of the whacking businesses and jobs have had from Covid, quite honestly, it doesn't bear thinking about," he said.

“Which is why I believe this Government, which has not lost all sense of perspective, would realise that it does need a deal. It can't deliver a second whammy of that kind to the UK economy.”

Asked why Britain would nominate the prominent Remainer for director-general over a Brexiteer such as former Trade Secretary Liam Fox, Lord Mandelson said: “I have more chance of winning it or less chance of being vetoed or blackballed by other members of the WTO than perhaps Liam Fox does.”