‘Hard Brexit’, International Trade and the WTO Scenario

This report looks at the possible consequences of a hard Brexit, following an unsuccessful conclusion of Article 50 negotiations between Britain and the European Union. On its departure from the EU, Britain would presumably adopt the EU’s current 'Schedule of Concessions' agreed at the World Trade Organization. This would involve imposing tariffs by the EU on UK exports, and the UK will in turn impose tariffs on imports from the EU. This report provides estimates of what these 'tariff' costs are likely to be.

The report looks in detail at how the hard Brexit scenarios affect 55 sectors of the economy.

When the trade effects are compared to the size of sector value added, (the sum of payments to labour and profits) there are five sectors where this is greater than 10%. This could be the equivalent of reducing the profitability of foreign trade in these sectors to zero. The sectors affected are:

+ Motor Vehicles
+ Basic Metals
+ Fishing/aquaculture
+ Other transport (aerospace)
+ Textiles

The author's conclusions suggest that it was in the national interest to secure a 'good deal' on Brexit, and it contradicts any assertion that 'No deal is better than a bad deal'. It also helps to fill a gap admitted by the Minister for Brexit, Mr David Davis, that no contemporary modeling of the consequences of a hard Brexit has been undertaken.

ESO: In Focus: Brexit - The United Kingdom and the European Union http://www.europeansources.info/record/brexit-the-united-kingdom-and-the-european-union/

ESO: Background information: Taking back control of trade http://www.europeansources.info/record/taking-back-control-of-trade/

ESO: Background information: Nothing to declare. A plan for UK-EU trade outside the Customs Union http://www.europeansources.info/record/nothing-to-declare-a-plan-for-uk-eu-trade-outside-the-customs-union/

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