18 August 2017

Institute of Economic Affairs: ‘No deal’ with EU on trade post Brexit does not mean disaster for the UK

A new report from the Institute of Economic Affairs calls for unilateral free trade following Brexit, complemented by free trade agreements with our major trading partners such as the US, Canada and Australia.

This would bring us significant benefits including lower prices for consumers, increased productivity and higher wages by eliminating all barriers to imports.

The report goes on to assert several facts about trade policy that are often overlooked or completely disregarded, particularly concerning membership of the single market.

6 facts about trade policy:

No deal with the EU would not be a disaster

• The UK could trade with the EU under WTO rules
• It would then be up to the EU if it wanted to impose tariffs, which would hurt EU consumers by raising prices

Most tariffs make no sense

• They impose large compliance and administration costs on importers

UK would be given tariff free access to the single market

• All European countries with the exception of Belarus and Russia have tariff free access to the single market; there is no reason why the UK wouldn’t also

Protectionist policies disadvantage workers in non-protected sectors

• 92 per cent of UK workers are in non-protected sectors. Tariffs on imports competing with protected sectors mean they have to pay higher prices as consumers and their employers have to pay higher prices on imports, leading to lower wages and fewer jobs
• Abolishing tariffs would create more jobs, offsetting the loss of jobs in the 8 per cent of workers in protected sector

Trade negotiations are not a bargaining game

• Consumer interests should be the primary focus in trade deals
• Trade is about all parties benefiting, not one at the expense of another

Multilateral trade deals have achieved little trade liberalisation

• Deals such as TTIP and TPP focus on regulatory harmonisation rather than free trade

Full report

© Institute for Economic Affairs