Countries within the European Union will face annual tariffs of £12.9 billion ($15.7 billion) if the UK pursues a “hard Brexit,” according to new analysis from a prominent think tank.
The Civitas research found that British companies would face a lesser bill of £5.2 billion for tariffs if the UK fails to negotiate a free trade deal with the bloc.
A “hard Brexit” describes the version of events where the UK leaves the EU without a trade deal whatsoever. This is likely to happen if it opts out of the EU’s policies on immigration, such as the Freedom of Movement act. Prime Minister Theresa May has hinted that she favours that scenario, and has suggested that she will put immigration above single-market access on the agenda.
If the UK does opt for “hard Brexit,” it would fall back on World Trade Organisation tariffs when trading with the EU.
The analysis found that all but five of the other 27 members of the EU would face higher tariffs in that scenario than Britain would in return.
German firms would face costs of £3.4 billion on goods coming to the UK, while British firms would face tariffs of just £900 million in the other direction.
French firms could pay up to £1.4 billion, and £700 million in return. Here is the full chart:
Brexiteers will see the research as evidence that it is in the EU’s interest to strike a free trade deal with the UK.
Tory minister Chris Grayling, a prominent Brexit campaigner, told the BBC’s Andrew Marr show on Sunday that he was “convinced” the UK will strike a free-trade agreement with the EU, because it is in the “interests of everyone.”
“Nobody in continental Europe benefits from a reduction in the ability to trade with the United Kingdom,” he said.
The reality of negotiations may be different, however. Over the weekend a tiny region of Belgium vetoed an EU-Canada trade deal that had been 7 years in the making, which many believe spells trouble for Britain’s own imminent trade negotiations with the union.