The UK has some rather urgent trade talks ahead once it invokes Article 50 which will set a 2 year time limit for the UK to exit the EU. The major problems are that trade talks are extremely complex and normally take years to negotiate. By the way we don't have enough trade negotiators to do all this as we have not done trade talks for 43 years as this has been done on our behalf by the EU. As the head of the WTO Roberto Azevêdo has warned in the Financial Times
“It is extremely difficult and complex to negotiate these trade agreements. And slow as well,” he said. “Even if you are in a position to negotiate quickly with all these other members it doesn’t mean that they will be in a position to negotiate with you because they have their own priorities."
Also the UK clarify its new UK-EU status with the WTO which requires the consent of all the existing WTO members such as Russia and China. It will also be virtually impossible for the UK to do any trade deals with countries such as Canada, United States, India and China before it has established its new trading relations with the European Union. The reason for this is that access to the Single Market would mean the UK needs to apply the EU Common External Tariffs (CET) to rest of the the world. For example if the EU has a CET on steel imports from the US and rest of the world, then if the UK remains in the Single Market it will have to apply the 20% CET on the US as well and cannot have free trade in steel and other products with other countries such as the US, India and China.
There is also the question of agricultural support, UK farmers currently get subsidised by the Common Agricultural Policy if we wish to continue agricultural support post EU then this will require WTO approval. A very important point that is overlooked is that if the UK-EU strike a free trade deal then in order to get WTO approval it needs to cover "substantially all trade" which means services as well. But to get continued open trade in services then the UK will have to accept free movement of labour something which is an anathema to Brexiteers.
Then there is the issue of UK trade relations with other countries that the EU has special deals with. Since we will not be EU members we will need to renogotiate all these deals ! An exit from the EU will mean the UK loses preferential access to other markets covered by 36 trade agreements with 58 countries negotiated by the EU. In order to remain compliant with WTO rules the UK would have to impose higher “most favoured nation” tariffs on imports from those 58 countries, and they will to levy their own surcharges on British exports.
These are just some of the many complex issues the UK will be dealing with when it comes to trade over the next decade. The exit costs of leaving the European Union were completely ignored by the Brexiteers but will become very apparent I promise you that. Oh and Michael Gove does not like listening to experts by the way...
“It is extremely difficult and complex to negotiate these trade agreements. And slow as well,” he said. “Even if you are in a position to negotiate quickly with all these other members it doesn’t mean that they will be in a position to negotiate with you because they have their own priorities."
Also the UK clarify its new UK-EU status with the WTO which requires the consent of all the existing WTO members such as Russia and China. It will also be virtually impossible for the UK to do any trade deals with countries such as Canada, United States, India and China before it has established its new trading relations with the European Union. The reason for this is that access to the Single Market would mean the UK needs to apply the EU Common External Tariffs (CET) to rest of the the world. For example if the EU has a CET on steel imports from the US and rest of the world, then if the UK remains in the Single Market it will have to apply the 20% CET on the US as well and cannot have free trade in steel and other products with other countries such as the US, India and China.
There is also the question of agricultural support, UK farmers currently get subsidised by the Common Agricultural Policy if we wish to continue agricultural support post EU then this will require WTO approval. A very important point that is overlooked is that if the UK-EU strike a free trade deal then in order to get WTO approval it needs to cover "substantially all trade" which means services as well. But to get continued open trade in services then the UK will have to accept free movement of labour something which is an anathema to Brexiteers.
Then there is the issue of UK trade relations with other countries that the EU has special deals with. Since we will not be EU members we will need to renogotiate all these deals ! An exit from the EU will mean the UK loses preferential access to other markets covered by 36 trade agreements with 58 countries negotiated by the EU. In order to remain compliant with WTO rules the UK would have to impose higher “most favoured nation” tariffs on imports from those 58 countries, and they will to levy their own surcharges on British exports.
These are just some of the many complex issues the UK will be dealing with when it comes to trade over the next decade. The exit costs of leaving the European Union were completely ignored by the Brexiteers but will become very apparent I promise you that. Oh and Michael Gove does not like listening to experts by the way...
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