LONDON: The United Kingdom is expected to receive preferential rates after Brexit and not trade with the European Union under standard WTO regulations.
According to details, after the United Kingdom’s decision to leave the EU Customs Union and lose EU single market access, London plans to actively pursue free trade deals with other countries worldwide, benefiting from lower regulations and a more liberal economic policy.
Almost half of UK exports in goods and services in 2015 were traded to countries within the European Union, amounting to 220 billion pounds (some $270.6 billion), while 53 percent of UK imports came from the bloc.
Without the EU single market access, the United Kingdom will need to negotiate a new trade deal with the bloc, join the European Economic Area (EEA) like Norway and be obliged to the free movement of persons, or face extra costs and tariffs while trading with Brussels.
“Leaving the single market will have consequences for Britain’s trade with the EU because there simply no other trade arrangement that will give equal access to the EU market. EU exporters will be saddled with extra costs for trading with the EU that their competitors in Europe don’t face,” Fredrik Erixon, the director of the European Centre for International Political Economy (ECIPE), said.
According to a British think tank UK exporters will face EU tariffs amounting to some $6.3 billion a year, an average of 4.5 percent, if no EU-UK FTA is reached by the spring of 2019 – the period set for negotiating the country’s exit from the bloc. These figures, however, are not final, since EU tariffs are uneven, ranging from duty free to 45 percent on tobacco.
Moreover, the United Kingdom is expected to receive preferential rates after Brexit and not trade with Brussels under standard WTO regulations.
