UN study projects $32 billion loss for UK post no-deal Brexit

Unsplash/Ali Yaqub Skyline of the City of London, United Kingdom.

This article is brought to you in association with the United Nations.


The United Kingdom (UK) risks losing up to 14 per cent of its exports to the European Union (EU) in a so-called “no-deal” Brexit, according to a new study by the UN Conference on Trade, Investment and Development (UNCTAD).

Brexit Beyond Tariffs: The role of non-tariff measures and the impact on developing countries maintains that without UK-EU agreements, or non-tariff measures (NTMs), in place, post-Brexit exports could fall by $32 billion.

Potential losses under a “no-deal” Brexit from tariffs are estimated at between $11.4 billion and $16 billion of current exports – and the new study says NTMs would double those losses.

The study also projects that even if a “standard” free trade agreement were to be signed by the parties, the UK’s exports could still drop by nine per cent.

This is because standard trade deals normally focus on reducing or eliminating tariffs rather than NTMs and Britain has already indicated it will diverge from the EU in terms of regulation.

As the EU market accounts for 46 per cent of the UK’s exports, a no-deal Brexit would deal a major blow to the UK’s economy, according to the study by the Geneva-based agency.

Moreover, mounting trade costs due NTMs and potentially rising tariffs would more than double the adverse economic effects of Brexit for the UK, EU and developing countries, the study notes.

NTMs include regulatory measures protecting health, the environment and traditional trade policies, such as quotas.

Regulations affect most of the products we use in our daily lives, from packaging requirements and limits on pesticide usage to restrictions on toxins in toys and emission standards for cars.

“EU membership has its advantages to deal with non-tariff measures that even the most comprehensive agreement cannot replicate. This offers important lessons to other regions trying to deal more effectively with such non-tariff measures,” said UNCTAD Director of International Trade Pamela Coke-Hamilton.

Developing countries boon

On the flipside, a no-deal Brexit could offer opportunities to developing countries, as trade barriers between the UK and the EU would benefit third countries suppliers.

Post-Brexit “no-deal” fallout

  • The UK risks losing up to 14 per cent of its exports to the EU
  • Non-tariff measures would double losses from tariffs
  • Ireland’s exports to the UK may drop by 10 per cent
  • Mounting trade costs would more than double adverse economic effects for the UK, the EU and developing countries

However, the study finds that a positive third-country effect could be diminished by increasing regulatory differences, saying that if the UK’s regulations divert over time from the EU’s, trade costs would rise for third countries, disproportionately affecting smaller and poorer countries.

In quantitatively exploring the post-Brexit role of NTMs and their consequences for developing countries, the study revealed a positive impact on agriculture, food and beverages, wood and paper sectors and a weaker one in electrical and machinery, metal products, chemicals, and textiles.

‘Hard’ and ‘soft’ exits

Britain left the European Union last month and has vowed to strike a deal on new trading relations with the bloc by the end of the year.

While a “hard” exit scenario would result in the study’s projections, the economic effects of a “soft” exit, in which the status quo is largely maintained, would depend on the details of that relationship.

Based on the study’s results, to minimize potential negative effects, the relationship should address customs unions, or trade blocs, and NTMs in a more comprehensive way than typical free trade agreements (FTAs).

Standard FTAs and customs unions generally promote trade through tariff reductions. And although tariffs are undeniably important, substantial evidence shows that the EU’s effect on trade exceeds that of zero tariffs.

Advertising

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

Here’s why leaders need to care about mental health

Air pollution could be responsible for 1 in 7 new cases of diabetes

UN agency helps stranded Ethiopians return home, ending ‘harrowing migration ordeal’

Business is a crucial partner in solving the mental health challenge

Strength in unity: Commission makes recommendations for the EU’s next strategic agenda 2019-2024

Rising political extremism in Europe escapes control

To protect trust in the 4IR, we need to become experts in distrust

Why skills are keeping CEOs awake at night

Guterres in Davos: ‘Dysfunctional’ response to common problems, shows need for effective multilateralism

The gateway to carbon pricing? Air pollution policy

The MWC14 Sting Special Edition

Coronavirus (COVID-19): truth and myth on personal risk perception

Sustainability is now mission critical for businesses. Here’s why

The digital skills gap is widening fast. Here’s how to bridge it

This is how countries compare on gun deaths

Universal Health Care: can it exist only in utopic society?

How do we make artificial intelligence more humane?

Impossible Brexit options: WTO or new referendum?

‘Our goal is to democratize the air.’ How aerial transportation will shape cities of the future

“If the job market doesn’t exist, then even the most brilliant Youth Guarantee cannot ensure a job to these young people”, European Youth Forum Secretary General Giuseppe Porcaro on another Sting Exclusive

Syria: ‘Deplorable’ violence in Idlib against civilians, humanitarian workers must ‘stop immediately’: UN Coordinator

The new assembly lines: Why AI needs low-skilled workers too

Obama turns the G20 summit into warmongering platform

This is how Copenhagen plans to go carbon-neutral by 2025

Tuesday’s Daily Brief: prizewinning journalists freed in Myanmar, new tracking tool for suspected terrorists, and a global bid to stop snakebite deaths

Despite funding crisis, Palestine refugee classrooms set to stay open, says UNRWA

New Eurobarometer survey shows: The majority of Europeans think the EU should propose additional measures to address air quality problems

Pervasive corruption costs $2.6 trillion; disproportionately affects ‘poor and vulnerable’ says UN chief

Bank resolutions set to remain a national affair

These dogs can smell tree disease – and could help save the world’s orange groves

Galileo and EGNOS programmes back in orbit powered with €70 billion

Aid stepped up to Syria camp; new arrivals say terrorists blocked their escape

Cameron’s “No Brexit” campaign wins top business support as Tory front breaks

UN Security Council condemns Taliban offensive as a blow against ‘sustainable peace’

MEPs to debate priorities for 28-29 June EU summit

Yemen: UN envoy asks Security Council for more support ‘to move back’ to the negotiating table

Civilian deaths in Afghanistan hit record high – UN

Camino de Santiago – a global community on our doorstep

African migration: what the numbers really tell us

Why today’s leaders need to know about the power of narratives

AI will drive the societies of the future. Will the governed consent?

Schengen: new rules for temporary checks at national borders

Why do humanitarian crises disproportionately affect women?

London, Berlin, Paris to fight over EU budget

CHINA: five letters that could mean…

We can feed the world in a sustainable way, but we need to act now

The “Legend of the Sun” wishes you Happy Chinese New Year 2015 from Brussels

Migration crisis will keep deteriorating as common EU political will is simply not there

Coronavirus: How worried should we be?

Hazy ‘breakthrough’ saves PM May, leaves Ireland in limbo: Brexit

The ‘yellow vests’ undermined Macron in France and the EU

A question of trust: the UN political chief working behind the scenes to prevent tomorrow’s wars

European Union supports survivors of sexual violence in conflict

What would happen if we removed cars from cities?

EU Ombudsman must continue push for more transparency in Council and Commission

Guterres lauds UN peacekeeping, highlights need to bridge ‘critical’ gaps

Australia wants to build a giant underground ‘battery’ to help power the nation

MEPs urge the EU to lead the way to net-zero emissions by 2050

Living to 100: why we should plan for more sushi, chocolate and work

Does the West play the Syrian game in Egypt?

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s