EU State Aid rules and WTO Subsidies Agreement

As a member of the EU and of the WTO, the United Kingdom must follow a number of rules when providing assistance to businesses and industries. This note explained the rules around State Aid and subsidies, their motivations and differences.

Once the UK had formally left the EU, the extent to which EU State Aid rules would still apply would be determined by the deal the UK struck with the EU. But if State Aid was not part of the Brexit deal, then this policy area would be open to domestic reforms.

While members of the European Economic Area such as Norway must replicate all EU State Aid rules, there were no EU State Aid rules in the CETA deal between the EU and Canada.

But the absence of the EU State Aid framework might not necessarily translate into higher levels of direct support to businesses, since recent UK governments have tended to avoid subsidising particular industries.

UK: GOV.UK: Department for Business, Energy & Industrial Strategy: Guidance, 23.08.18: State aid if there's no Brexit deal https://www.gov.uk/government/publications/state-aid-if-theres-no-brexit-deal

UK: GOV.UK: Competition and Markets Authority: Speech, 30.10.18: Post-Brexit state aid in the UK https://www.gov.uk/government/speeches/post-brexit-state-aid-in-the-uk

UK: GOV.UK: Competition and Markets Authority: Collection: CMA's role after Brexit https://www.gov.uk/government/collections/cmas-role-after-brexit

UK: Parliament: House of Lords: EU Select Committee: 12th Report of Session 2017–19 HL Paper 67: Brexit: competition and State aid https://publications.parliament.uk/pa/ld201719/ldselect/ldeucom/67/67.pdf

LSE Brexit: Blog, 21.09.18: State aid and Brexit: the temptation for political intervention http://blogs.lse.ac.uk/brexit/2018/09/21/state-aid-and-brexit-the-temptation-for-political-intervention/

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