As a multilateral trade agreement, GATT obliges its members to extend most-favoured-nation (MFN) status to other trading partners participating in the GATT. Most-favoured-nation status means that each GATT member enjoys the same tariff treatment for its products in foreign markets as the « most favoured » competing country in the same market, thus excluding preferences or discrimination for a member state. Since the beginning of GATT, Member States` average tariffs have risen from around 40% shortly after the Second World War to around 5% today. These reductions helped to stimulate both the strong expansion of world trade after the Second World War and the resulting increase in real per capita income in both developed and developing countries. The gain from the elimination of tariff and non-tariff barriers resulting from the Tokyo Round (1973-1979) of the GATT negotiations was estimated at more than 3% of world GNP. However, a customs union has a great advantage: the border between Ireland and Northern Ireland would remain open and easy to cross. Services also make up a significant share of the UK economy (78%) and are not fully covered by a customs union, as they tend to face « non-tariff » trade barriers. The costs associated with rules of origin are far greater than the general public would imagine. A contractor must check whether his products comply with the rules of origin and, if this is not the case, it must be decided either to take measures such as the passage of the supplier of raw materials from other countries to his own country, or to abandon the use of the free trade agreement as a whole. Even if the products comply with the rules of origin, different procedures must be implemented, including obtaining a certificate of origin and keeping one`s books. On the government side, too, the customs workload is increasing.
. . .