UK faces wave of accusations for breaching WTO rules with its US trade deal

The UK’s recent trade agreement with the US has sparked concerns among European Union officials and UK parliamentarians over its compatibility with World Trade Organization (WTO) rules.

WTO analysts are also concerned about the trade deal, which was also hailed as a landmark “Economic Prosperity Deal.”

According to reports, by granting preferential access for American autos, steel and agricultural goods without a comprehensive free-trade framework, London risks breaching the WTO’s Most Favoured Nation (MFN) principle, which mandates equal treatment of all trading partners unless an exemption applies.

UK trade deal with the US may discriminate against other suppliers

Unlike full-scale free-trade agreements that qualify for WTO waivers, the UK–US pact is limited in scope, covering tariff reductions on British car and steel exports in exchange for expanded US access for beef and ethanol.

Under WTO law, however, any tariff cut offered to one member must automatically extend to all MFN signatories.

By allowing 13,000 tonnes of American beef into the UK market tariff-free, and converting a 19% ethanol duty into a zero-tariff quota for 1.4 billion liters, Britain has carved out preferential quotas that may discriminate against other suppliers.

EU trade officials worry these concessions undermine the non-discrimination cornerstone of multilateral trade rules, and could force London to extend identical benefits to other WTO members or face legal challenge.

The matter was discussed in Westminster this week, with professionals before a House of Lords committee warning of a “serious error” in potentially WTO-incompatible provisions.

Professor Michael Gasiorek of Sussex University noted that although similar breaches have occurred in past US deals, the outlined tariff and quota adjustments risk deeper conflicts with WTO commitments.

“There are elements [of the deal] which are clearly WTO incompatible, such as the announced changes in tariffs — although not much has been announced with regard to that — and the announced changes in tariff-rate-quotas.”

Professor Gasiorek.

Dmitry Grozoubinski of ExplainTrade echoed the view, highlighting the beef quota as a clear “new preferential” carve-out.

Meanwhile, Liam Byrne MP, chairing the Commons Business and Trade Committee, urged collaboration with the EU to uphold global trade norms and recommended that the UK join the WTO’s alternative dispute resolution system.

Currently sidelined, this mechanism remains dormant since the US stalled appointments in 2017, but UK membership could shore up multilateral enforcement.

UK faces a balancing act in its US – WTO trade deal

Backed by six leading WTO members, including Canada and Australia, the Multilateral Interim Appeal Arbitration Arrangement (MPIA) offers a pathway to settle disputes despite the WTO Appellate Body impasse. Although joining could irk Washington, given the arrangement’s Brussels origins, the new UK administration appears more receptive.

Trade Secretary Jonathan Reynolds has signalled support for strengthening WTO functions, and Britain’s Permanent Representative to the WTO, Simon Manley, confirmed that accession to the appeal system is “under active consideration.” Membership would align the UK with most major trading nations and provide a forum to challenge any unfair market access expansions.

These developments coincide with London’s efforts to “reset” relations with Brussels, underscored by a new UK–EU trade declaration signed at this week’s summit. That agreement reaffirms commitment to “free, sustainable, fair and open trade” and explicitly recognises the WTO’s role in ensuring predictability and fairness.

The UK government has stressed its support for the WTO’s stability-providing mandate, framing the US pact as a stepping-stone toward a broader, binding Economic Prosperity Deal. Yet, without careful calibration, preferential treatment for American exports risks igniting disputes not only with the EU but with any trading partner excluded from the concessions.

As negotiations continue, the challenge for Britain will be to reconcile its bilateral ambitions with its multilateral obligations. Ensuring that any future tariff or quota adjustments comply with MFN provisions, or securing an appropriate WTO waiver, will be crucial to avoid legal challenges that could erode the very market certainty London seeks to foster.

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