Chapter 5: Trade


 How will Brexit affect Britain's trade with Europe?

Britain will have to reach a new trade agreement with the European Union. The task will be complex and will have to be carried out under the pressure of the two-year deadline. These discussions will need to consider the framework for exporting and importing goods (cars and food) and the basis for continued services trade (such as legal advice on big company takeovers) to and from the EU.
One of the most prominent matters about a possible new deal would be tariffs imposed on UK goods and services. This is a very distinct possibility, as the no-fee policy under effect now, only exists between EU members. Brussels could easily impose a 5% tariff on all UK exports (more than eight of 10 UK-made cars are sold abroad), to which Britain could respond with tariffs on imported goods. In any case, it seems like EU has the upper hand since they are willing and able to apply more pressure than the British politicians.

It is important to note at this point, that these negotiations will take place between the UK and all 27 member states jointly instead of a separate deal with every country. That is because EU maintains a single harmonized customs border which will not be affected by Brexit, so Britain will have to strike a deal on the continued terms of trade with the other members.

On the other hand, one aspect of trading that is not affected by Brexit is with the US. The ability to trade under today’s standards is unchanged, although it excludes Britain from any future negotiations and deals between the US and European Union, such as the recently controversial TTIP trade deal.
After all, the two sides are entering a period of long and harsh negotiations, that will be based on political will. An outcome close to today’s no-fee standards is possible, as current British status quo prevails, even though it would be difficult to accept for millions of people who campaigned and voted for leaving the EU.



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