substantial interest<sup>14</sup> to seek additional concessions and commitments in compensation for the amendments that reduce the scope of the concessions.

**<mark>Box 2.</mark>** <mark>Procedures for the Modification of Concessions</mark>

Article XXVIII:4 of the GATT allows members to request the renegotiation of its lists of concessions “in special circumstances.” Renegotiations can be requested any time, and the member concerned shall request the authorization from other members by sending a notification of its intention of modification or withdrawal of tariff concessions. The renegotiation shall be completed within a 60-day period if such negotiations involve only a single item or a very small group of items. A longer period of time may be granted by members if such negotiations involve a larger number of items.

A member seeking to modify or withdraw a concession (e.g., increase a particular tariff binding) shall negotiate with members having Initial Negotiating Rights (INRs) and Principal Supplying Interest (PSI) with a view to agreeing on compensation in order to maintain “a general level of reciprocal and mutually advantageous concessions not less favourable to trade than that provided for in this agreement prior to such negotiations.” Such compensation is negotiated between the parties primarily concerned and could consist, for example, in the reduction of bound tariff rate(s) applicable to another item or other items of interest to the party. <mark>Source: WTO Secretariat, n/d.</mark> Amendments that increase the level of concession (lower bound tariffs, for instance,) may be introduced with no major challenges, and will likely be welcomed by the WTO memberships. On the contrary, amendments that are perceived as diminishing the trade concessions (such as higher bounds tariffs, smaller TRQs, or higher subsidies ceilings) are likely to elicit requests of compensation by interested WTO Members. Compensation would take the form of greater concessions in other elements of the lists. If the member requesting modification and the one member having substantial interest<sup>15</sup> seeking compensation cannot reach an agreement during the negotiation period with the modifying member, the requesting member may implement the modifications, which will allow the member with substantial interest to withdraw equivalent concessions initially negotiated with the member that initiated the renegotiation. Article XXI of the GATS provides for similar steps, with the addition of referring the matter to arbitration if the modifying member and the affected member are unable to reach an agreement on compensation.

In the case of the EU/UK, it would appear that the amendment of may lead to a process of modification of schedules. The UK will need to draw its own lists of concessions based, presumably, on the current EU lists. On the contrary, the EU will also need to amend its schedules to reflect the fact that the UK will no longer be covered by those lists. As mentioned earlier, the process of separating the UK rights and obligations from the current EU’s lists is

> 14 On the WTO members having a substantial interest, see Box 1 and footnote 14.

> 15 Article XXVIII provides explicitly that there is no precise definition of “substantial interest” (SI). It however clarifies that substantial interest should be understood as covering only those members who have, or in the absence of discriminatory quantitative restrictions affecting their exports could reasonably be expected to have, a “significant share” in the market of the member requesting to modify or withdraw the concession (Ad note to Article XXVIII of the GATT, para. 1.7). In GATT practice SI has normally been granted to those members who accounted for at least 10% of imports of the item for which modifications were being sought (WTO n/d).

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