- The UK government has published its own assessment of the potential benefits of striking a post-Brexit trade deal with Donald Trump.
- The analysis suggests a deal could increase the size of the UK economy by up to 0.2% over fifteen years.
- However, previous UK government analysis suggests that leaving the EU will shrink the economy by up to 6.7% over the same period.
- Visit Business Insider’s homepage for more stories.
Brexit will cost the UK economy up to 30 times more than the country hopes to gain back from securing a new trade deal with Donald Trump, new official figures suggest.
The UK’s Department for International Trade on Sunday evening published its objectives for talks with Trump’s administration ahead of negotiations getting underway later this month.
The department’s analysis estimates that an independent new trade deal with the US, which is only possible due to Brexit, would boost the UK economy by £3.4 billion meaning an increase to the UK economy of 0.1% to 0.2% over the next ten to fifteen years.
However, this figure is dwarfed by the estimated cost of a Johnson’s own Brexit deal.
UK government analysis published in November 2018 suggested that a “modelled average FTA (free trade agreement)” along the lines of Johnson’s planned deal with the EU would reduce economic growth by up to 6.7% over a 15-year period.
Analysis of Johnson’s deal last year by the independent think tank UK In A Changing Europe found an almost identical hit to the economy of 6.4%.
This means the cost of Brexit is set to be over thirty times bigger than the economic gain of a trade deal with the US.
Pro-Brexit figures in Johnson’s government have in the past questioned such forecasts.
Conservative MPs accused former Chancellor Phillip Hammond of being too gloomy when the Treasury revealed its analysis of how a new free trade deal with the US would benefit the UK economy.
However, this most recent analysis of a trade deal with the US is pretty much in line with previous government projections.
Former UK trade official David Henig on Monday that the projection matched past analysis on the impact a proposed free trade deal between the EU and US would have on the UK as an EU member state.
“This is in line with TTIP forecasts. 0.1% of GDP from a modest deal,” he told Business Insider.
Henig, who is now UK Director at the European Centre for International Political Economy, added: “These forecasts are based on the same models that suggested a much larger economic hit as a result of a shallow UK EU deal.”
Naomi Smith, CEO of cross-party campaign Best For Britain, said: “It isn’t economically sensible to rip up all of our existing trade deals in order to pursue an arrangement with the US worth just a fraction of our trade with the EU.”
She added: “If the Government is serious about making a success of Brexit, it should start by ensuring we maintain the strong trading relationships we already have as part of the EU, rather than prioritising the relatively low benefits of a US trade deal.”
Powered by WPeMatico