Brexit likely to put £250 bn trade at risk
The Dollar Business Bureau
The withdrawal of the United Kingdom from the European Union (EU) often called as Brexit (Britain’s exit) is likely to put £250 billion ($362 billion) of trade in risk according to market experts from Europe. As per a lobby group Britain Stronger in Europe (BSIE) this would affect the trade with EU members, and with other 50 countries that have FTAs with the EU.
The BSIE has calculated the trade amount that could be lost if the UK moves to World Trade Organisation laws. Former British chancellor of the exchequer Alistair Darling said that those who want to leave the EU, are pulling Britain out of the EU. This may result in bringing new tariffs and hurdles to the trade in Europe. Finally, this will land billions of trade dollars’ in a huge risk. “There is no trading arrangement outside the EU which allows free trade we rely on today,” said Darling.
Last month, the US President Barack Obama had mentioned the problems that would arise in signing new FTAs in the place of old ones with the EU. Britain will be the last in line to have a new deal with the US, he said.
As per the UK government analysis, around 60% of Britain’s trade was done with EU members, countries in the European Economic Area (EEA), or the other 50 countries that EU had signed trade deals with. If there were no trade agreements with these three groups, trade would have been 76%, 44%, and 17% respectively. The analysis has listed out several other advantages of the membership.
However, the trade increased by signing the FTAs is not the same to the trade amount as predicted to be at risk by leaving the EU. Of course, the result of either leaving or joining the group may not be the same. Till now no other country has left the EU to act as an example for further research or analysis.
The BSIE has estimated the risk of £250 billion, by deriving the total amount of trade the UK has done with EU in 2014 at £520 billion, that includes exports as well as imports. According to few analysts, a decrease in imports would help in reducing the trade deficit of the country.
