Find Prospect's full report, "Brexit Britain: the trade challenge," here
With Britain’s vote to leave the European Union on 23rd June, many may have thought they were voting to teach the establishment a lesson. Instead, they set off the most profound and far-reaching economic re-alignment for very many generations—a change far more profound than most can possibly have realised.
At the heart of this re-alignment is trade. For Britain to leave the EU, the treaties and laws that govern about 44 per cent of our exports—worth £223bn in 2015—and well over 50 per cent of our imports—worth £291bn that same year—will have to be rewritten or replaced. The challenges are immense, not least because not having negotiated an international trade agreement on its own account in well over 40 years Britain is extremely short of expertise in this most technical field of international relations. Simply recruiting enough seasoned negotiators so that the serious work can begin will represent no small achievement.
In the articles that follow we examine the issues that Britain must face across a wide range of areas from the future of our vital international trade in services, to the needs of manufacturers managing extended international supply chains, the options for Britain’s farmers and food producers, and the opportunities to increase trade with countries and regions beyond Europe.
Across every part of the economy, membership of the EU and especially its single market has had an enormous influence on the way British commerce has developed. Major foreign industrial investments that created thousands of jobs have been predicated on our free access to EU markets; the price of our food and the economic viability of our agriculture have been at least partly determined by EU-wide policies; the global status of the City of London as a financial centre has been significantly reinforced by its right to transact freely across an economy of half a billion people.
As Britain begins to plot a new direction outside the EU, the most striking features of the challenge ahead are its sheer complexity and the number of fundamental questions that remain unanswered. It is not even clear whether, or on what basis, the UK will be a member of the World Trade Organisation (WTO) when we leave the EU, since it is the EU that belongs to the WTO rather than its individual constituents. With such huge issues to resolve, one of the few things we can be sure about is that the task Britain is embarking upon is very likely to dominate our country’s politics and its economic prospects for decades to come.
