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How Britain Will React to a WTO-Based Brexit

Author

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  • Minford Patrick

    (Cardiff University, Cardiff Business School, Colum Drive Cardiff, CF103EU, United Kingdom of Great Britain and Northern Ireland)

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.

Suggested Citation

  • Minford Patrick, 2019. "How Britain Will React to a WTO-Based Brexit," The Economists' Voice, De Gruyter, vol. 16(1), pages 1-5, December.
    • Handle: RePEc:bpj:evoice:v:16:y:2019:i:1:p:5:n:12
    DOI: 10.1515/ev-2019-0027
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    References listed on IDEAS

    as
    1. Patrick Minford & Sakshi Gupta & Vo P.M. Le & Vidya Mahambare & Yongdeng Xu, 2015. "Should Britain Leave the EU?," Books, Edward Elgar Publishing, number 16679.
    2. Holger Breinlich & Swati Dhingra & Saul Estrin & Hanwei Huang & Gianmarco Ottaviano & Thomas Sampson & John Van Reenen & Jonathan Wadsworth, 2016. "BREXIT 2016: Policy Analysis from the Centre for Economic Performance," CEP Brexit Analysis Papers 08, Centre for Economic Performance, LSE.
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