LONDON: Nearly all the possible trading relationships between Britain and the European Union following Brexit would be less favourable than staying in the European Union, according to an influential US think tank.
The Rand Corporation study said the worst option would be a “no deal”. That would leave the UK economy 4.9% poorer by 2029.
“No deal” would also have a negative effect on the EU economy, but it would be “relatively minor”. The report said that even a “soft Brexit” involving staying in the free market would not be as positive economically as staying in the EU.
Rand plays a significant role in America, with half of its funding coming from the US government.
In Europe it has advised the UK government on policy issues such as mental health, as well as the European Parliament and the European Commission.
Its report argues that Brexit was likely to have a “mostly negative effect” on American interests in Europe, given the UK is a firm ally of the US in security matters and a supporter of free markets.
“An EU without the UK may be more willing to create barriers for non-EU companies, to the detriment of US companies and the American economy,” the report says.
“In the development of EU defence policy, for example, the UK aim was often to ensure that EU measures did not undermine NATO and the strong transatlantic partnership.”
That approach could change once Britain has left the EU.
