The Trade Costs of Leaving the EU

The “Brexiteers” – those who want Britain to leave the EU – argue that their goal would be virtually cost-free and have no effect on the UK’s global trade. But when British voters cast their ballots in the June referendum on the question, they must consider how the free-trade benefits they now enjoy could be maintained after Brexit.

BRUSSELS – The “Brexiteers” – those who want Britain to leave the European Union – argue that their goal would be virtually cost-free and have no effect on the United Kingdom’s global trade. They are wrong. On June 23, when voters in Britain cast their ballots in the referendum on the question, they need to consider what is actually involved in leaving the EU – and how the free-trade benefits they now enjoy (and take for granted) could be maintained after Brexit.

Start with the basics. Leaving the EU means that the UK would exit the EU’s Customs Union, which is the basis for cross-border free trade among the EU’s 28 members (and establishes a common external tariff vis-à-vis third countries). It also means exit from the Single Market – the basis for the free movement of goods and services among EU members. By definition, non-members of the EU cannot belong to the Single Market.

So what would happen next? During the two-year period before Britain’s withdrawal takes final effect, there would be UK-EU negotiations on many points – sovereignty, the legal order, immigration, finances, and economic matters. The assumption is that a crucial goal for Britain would be to negotiate a trading relationship as close as possible to the free-trade relationships that exist today.

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