Article Published June 5th, 2017
PRESS RELEASE 5/6/2017
HARD BREXIT: A NEW ECONOMIC ANALYSIS
The Federal Trust will be launching today, 5th June 2017, a new report by Dr. Andrew Black of the Global Policy Institute, which looks at the possible consequences of the hard Brexit which would follow the unsuccessful conclusion of Article 50 negotiations between Great Britain and the European Union. The launch will take place at Mary Sumner House in Tufton Street, London, starting at 5pm (click here for further details on the launch event).
Dr. Black’s analysis is based on Input-Output modelling. The model assumes that if no agreement is achieved between the parties, then on its departure from the EU, the UK will adopt the EU’s current “Schedule of Concessions” agreed at the World Trade Organization. This will mean that tariffs will be imposed by the EU on UK exports, and the UK will in turn impose tariffs on imports from the EU. The report provides estimates of what these “tariff” costs are likely to be. Using Input-Output analysis the direct and indirect effects of such demand reductions are then estimated. It finds that the effects of these demand reductions are likely to be much more severe than is generally realized. A number of sectors of the economy, such as cars, agriculture, and financial services are likely to be particularly hard hit.
Dr. Black’s economic modelling is an attempt to fill the gap in economic forecasting which the current Brexit Secretary David Davis has admitted exists within his ministry. The findings of Dr. Black’s report cast particular doubt upon the view expressed by governmental representatives during the current election campaign that “no deal” with the European Union is better than a “bad deal.” It also suggests that the damage done to the rest of the EU by the absence of a formal arrangement for Brexit would be much less than that done to the UK.
Click here to read Dr. Black’s report “Hard Brexit, International Trade and the WTO Scenario” on the Federal Trust website.
If you would like to discuss the report further, please ring Dr. Black on +44 7500 742 206 or email him on [email protected].