Published On: Tue, Jun 11th, 2019

Brexit news: Why no deal will be ‘entirely manageable and will lead to minimal disruption’ | UK | News

Since Theresa May’s resignation, a no deal scenario has re-emerged as a potential conclusion to Brexit negotiations, with Boris Johnson, Dominic Raab and Esther McVey expressing their willingness to crash out of the EU without an agreement. However, tomorrow, Labour will launch the first step to bloc the future Prime Minister forcing through a no-deal Brexit against the wishes of MPs, by tabling a cross-party motion. If passed, the move would then give MPs control of the timetable on June 25 and could then potentially be used to begin legislation to prevent the UK from leaving the EU with no agreement in place.

The current legal default is for the UK to leave the EU with or without a deal on October 31.

As both the Labour and Conservative party appear deeply divided over the issue, in a new publication for Politeia, a forum for discussing economic, constitutional and social policy, Professor of International Economic Law at City University David Collins argued that a no deal Brexit will be entirely manageable for Britain.

Mr Collins noted given the strategic importance of the EU as a trading partner for the UK, the negotiation of an EU Free Trade Agreement (FTA) covering both goods and services should still be still a top priority.

However, the expert claimed that “without such an agreement in place, trade terms with the EU will be under the framework of the WTO”, which has proven to be “successful” around the world.

He wrote: “Although sometimes misleadingly and ominously described as ‘no deal’, ‘crashing out’ of the EU, or the ‘cliff edge’, trading under WTO rules will be entirely manageable and should lead to minimal disruptions.

“WTO rules should minimise the harmful impact of many potential legal barriers to trade between the UK and the EU as well as between the UK and third countries.

“Given that the WTO framework accounts for most of the world’s trade and has a track record of success in removing barriers to trade, this arrangement is entirely manageable and should not be a cause of anxiety for the British public.

“Most of the work preparing for trading on WTO terms has already been done and more is pending.”

Mr Collins suggested that the success of the WTO in promoting economic growth and increased standards of living around the world belies the attempts to dismiss it “pejoratively as the ‘no deal scenario’ in which the UK would operate in the absence of FTAs.

The WTO’s purpose, the Professor noted, is to eliminate barriers to trade in goods with a view to raising standards of living.

Mr Collins concluded: “WTO membership lowers consumer prices and therefore has a beneficial impact on real wages and competitiveness throughout the economy.

“The implications for the UK of trading only on WTO terms outside of the EU and without FTAs are broadly positive.

“Overall productivity would likely rise as the structures of production would become concentrated in non-protected sectors.

“The UK would no longer need to maintain tariffs on sectors which it has no significant domestic production to satisfy industrial lobbies elsewhere in Europe.

“Some economists have estimated that this would lead to a net gain to consumer welfare and GDP of 4 per cent.

“Furthermore, WTO membership would allow UK to abandon the burdensome EU regulations required by the Single Market, which many economists have argued should bring further efficiency gains in terms of GDP.”

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