Questions about the Trump Administration's Trade Deals and Compatibility with WTO Obligations
An issue that has been raised in relation to the Trump administration's various trade deals is whether they are compatible with WTO obligations. GATT Article XXIV, along with the Uruguay Round Understanding on the Interpretation of Article XXIV, sets out specific conditions that bilateral/regional deals on trade in goods must adhere to; and GATS Article V has something similar for services trade. How would these deals be assessed under Article XXIV or Article V?
Questions about the WTO compatibility of these deals may come up in various WTO meetings. One such forum is the Trade Policy Review Mechanism, in which other Members have a chance to ask questions about the reviewed Member's trade policies. In the UK's trade policy review, which was held last October (and for which the written questions and replies were recently circulated), several governments asked the UK about its deal with the U.S. Some relevant excerpts are below, although the spoiler is that we did not get a lot of insights on how the UK is thinking about the WTO compatibility issues:
Australia question 1
Does the UK intend to notify the US-UK Economic Prosperity Deal as a free-trade area pursuant to Article XXIV of the GATT 1994?
UK Reply
The UK will discuss with the United States the appropriate WTO notification procedures in relation to the US-UK Economic Prosperity Deal at an appropriate time following the conclusion of negotiations.
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Australia question 2
Will the UK in the interim period implement the outcomes of the US-UK Economic Prosperity Deal to other WTO Members on a most-favoured nation basis?
UK Reply
Negotiations on the bilateral UK-US Economic Prosperity Deal (EPD) are ongoing and build on the General Terms concluded in May. The General Terms note the intention of the UK and United States to continue to improve market access under the EPD on a preferential basis.
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Japan
Para 2.72 [of the Secretariat Report on the UK's trade policies] references preferential treatment accorded to US beef and ethanol as part of the US-UK Economic Prosperity Deal (EPD) of 8 May 2025. Does the UK intend to extend such treatment on a most-favoured-nation (MFN) basis to all WTO Members?
UK Reply
Negotiations on the bilateral UK-US Economic Prosperity Deal (EPD) are ongoing and build on the General Terms concluded in May. The General Terms note the intention of the UK and United States to continue to improve market access under the EPD on a preferential basis.
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Singapore
The Government Report states that the UK and the US have concluded the General Terms for an Economic Prosperity Deal (EPD), and that both sides are continuing negotiations on a wider economic deal. Could the UK share further details on how the UK views the WTO compatibility of the EPD and the wider economic deal to follow?
UK Reply
The UK and the US have agreed the General Terms for the Economic Prosperity Deal (EPD). This is only the first step in our discussions, and we are continuing to negotiate the EPD itself. The EPD is intended to further reduce tariffs, increase digital and services trade, and improve supply chain resilience. The General Terms note the intention of the UK and US to continue to improve market access under the EPD. The UK will discuss with the US on WTO notification at an appropriate time following the conclusion of these negotiations.
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China question 1
On manufactured goods, certain UK exports to the United States will be subject to lower tariffs under the General Terms. This will be the case for cars, which will be subject to a lower 10% tariff within an annual quota of 100,000, and steel and aluminium (and certain derivative steel and aluminium products), which will be subject to a quota at MFN rates instead of the 25% tariff being applied by the United States on the UK. This benefit is conditional on the UK meeting "US requirements on the security of the supply chains of steel and aluminium products intended for export to the United States and on the nature of ownership of relevant production facilities". The UK and the United States also intend to negotiate preferential tariff treatment on pharmaceuticals, subject to findings of a US Section 232 investigation on national security and conditional on the UK complying with supply chain security requirements. The authorities note that the UK and the United States are continuing negotiations on a wider economic deal, which is intended to cover a range of tariff reductions, increase digital trade, enhance access for services industries, and improve supply chains. Q1. Could the UK please provide a more detailed explanation of the supply chain security requirements that it should comply with, for steel and aluminium products, and pharmaceuticals under the US-UK Trade Deal (the General Terms)? What impact will these requirements have on third countries?
UK Reply
As set out in the General Terms for the UK-US Economic Prosperity Deal, the United Kingdom and the United States have agreed to discuss the security of supply chains for steel, aluminium, pharmaceuticals, and other products that may be subject to increased tariffs under Section 232 of the United States Trade Expansion Act. These discussions are limited to products intended for export to the United States, and they do not extend to goods that are consumed domestically in the UK or are exported to third countries.
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China question 2
Could the UK please further clarify the meaning, how to implement, whether third-party specific, and WTO rules consistency of certain provisions in the Economic Prosperity Deal signed with the United States? The provisions to be clarified include: (i) the UK's commitment to meet US supply chain security requirements related to products subject to Section 232 investigations, such as steel and aluminium products, pharmaceuticals, and pharmaceutical ingredients; (ii) strengthened rules of origin between the UK and the US; and (iii) measures to combat illegal transshipment and prevent tariff circumvention.
UK Reply
As previously shared with Members, the General Terms agreed in May between the United Kingdom and the United States are only the first step toward a wider deal, and we are actively negotiating the Economic Prosperity Deal (EPD) itself. The UK and US are still discussing key aspects, so we are not able to provide more detail at this time, and we would refer Members to our previous answers to their questions.
At the time of the UK Trade Policy Review, there were still a lot of unknowns about the U.S.-UK deal (most of which remain today). As more details on the Trump administration's trade deals emerge, the questions may get more pointed. Another country working on a U.S. trade deal that had its Trade Policy Review in 2025 was Thailand. When the questions and replies are released for this review, that will be another place to check for interesting exchanges on these issues. (There is also a deal being negotiated with Guatemala, but the details may have been released too late for the Trade Policy Review to address them). And looking to the 2026 reviews, it will be worth paying attention to what is said in the reviews for Japan in May, Viet Nam in November, and the EU in December, among others (and, of course, for the U.S. review at the end of the year).