Answer to Question #76963 in Economics of Enterprise for Legesse

Question

1. Brexit is a recent debatable issue in the international economic order. Whether Britain should opt for soft Brexit or hard Brexit is a point of contention for politicians. In the due course, some commentators in the international economic order claim that UK may stick to the “WTO option” in its EU exit process. How do you think will the “WTO option” ease UK’s exit process from the EU?
2. In March 2018, in Rwanda, Kigali, African leaders came up with an agreement to establish continental regional trade area in Africa. On the other hand, majority of states in Africa are members of the WTO. Therefore, how does the Regional Free Trade Area give favorable advantage in trade for African countries without violating WTO law? How may a WTO member state engage in the continental free trade agreement while giving favorable advantage only for African countries without evading their WTO commitment?

Answer 1

1. The “WTO option” can ease UK’s exit process from the EU, but it can't make fix all problems concerned with the Brexit.
2. The Regional Free Trade Area can give favorable advantage in trade for African countries without violating WTO law, if this area won't set any tariffs or other regulations, which will be higher than WTO bound rates.