How Britain Will React to a WTO-Based Brexit
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Patrick Minford
Abstract
The government of Boris Johnson has restarted negotiations with the EU over the proposed Withdrawal Agreement. If these fail the UK will exit without an agreed trade deal. This exit would not however be ‘lawless’, with unknown and chaotic consequences. Trade is governed in both the UK and the EU by WTO rules and these are highly prescriptive, preventing both sides from imposing border hold-ups and imposing arbitrary new standards on exporters whose products have long satisfied existing standards. Chaos produced by such state behaviour would be illegal and so is highly unlikely. Consequently such a ‘no deal’ would lead to the speediest Brexit, and avoid any UK financial contribution. It would also allow the rapid conclusion of FTAs with the US and other major trading partners, driving UK prices to world levels rapidly. Without an EU FTA tariffs would have to be imposed by both sides; their incidence would fall on EU traders who would have to match the world prices now prevailing in the UK market. Technically therefore no deal is the UK’s best option while it is damaging to the EU. However undoubtedly the UK would welcome a deal for reasons of good neighbourliness.
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Article note
This was written before an EU Deal was concluded in late October.
© 2019 Walter de Gruyter GmbH, Berlin/Boston
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Articles in the same Issue
- Editorial
- The Hardships of Brexit
- Policy Papers
- No Longer “The Economy Stupid”: How Muddled Economics Contributed to a Chaotic Brexit
- British Exceptionalism Causes Brexit Conundrum
- The Risks of Hard Brexit for the United Kingdom
- The Brexit as a Forerunner: Monetary Policy, Economic Order and Divergence Forces in the European Union
- EU28 Capital Market Perspectives of a Hard BREXIT: Theory, Empirical Findings and Policy Options
- Policy Forum
- How Britain Will React to a WTO-Based Brexit
- Explaining Brexit: How the City of London came to be Regulated by the European Union
- The Implications of Brexit for Financial Markets: Towards a Network of EU Financial Centres
- Brexit and its Impact on the Pound in the Foreign Exchange Market
- On the Way to Brexit: From Opt-Outs to Opt-Ins and From Trade to High Politics
- Other Papers
- Reaganomics: A Watershed Moment on the Road to Trumpism
- Quid Pro Quo! Organization Theoretical Remarks about FIFA’s Legitimacy Under Blatter and Infantino
- A Digital Euro to Compete With Libra
- Complexity, Uncertainty, and Monetary Policy: Can the ECB Avoid the Unconventional Becoming the ‘New Normal’?
- Two General Lessons from the 2019 Personal Income Tax Reform of China
