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Free trade is vital for consumer choice as it allows consumers to enjoy a greater variety of products at a lower cost. Interventions in the form of tariff, non-tariff barriers or quotas hit consumers the hardest, and, therefore, should be avoided or decreased at all costs.
As the official date of the UK’s exit from the EU is approaching, we would like to emphasise that free trade is vital for making Brexit a success. The report takes a closer look at how the United Kingdom can seize this opportunity, and the costs it will bear along the way.
Prepared by Maria Chaplia.
On June 26th, 2016, British people voted to leave the European Union. After 43 years spent in the European Union and the European Communities, the UK has developed close economic and legal ties with the bloc, which now stand as a major hindrance of the Brexit negotiation process. However, though the path so far has been fraught with political turbulence, Brexit also gives the UK an opportunity to prove that it is better off acting as an independent player on the international trade scene rather than as part of the EU.
This report aims to look at the potential implications of Brexit for the UK’s trade policy and to answer the following question: can the benefits of the UK’s withdrawal from the EU in terms of the UK’s trade potentially outweigh the costs? Given a number of factors – such as the outcomes of the UK-EU trade negotiations, the future economic growth of the EU compared to other markets, and the UK’s success in implementing trade liberalisation, which are unpredictable at this point, we abstain from asking whether the benefits can certainly exceed the costs.
For the purposes of conducting this analysis, we assumed that once the UK has left the EU, it is no longer part of the Customs Union and the EU Single Market but has secured a comprehensive free trade agreement with the EU.