A respected think-tank has revealed how the British Government can fight back EU attempts to punish them for Brexit by imposing trade tariffs.
A new report on EU-UK trade after Britain leaves the union – set for early 2019 – outlines policies which can stop domestic business from losing out, even if Brexit negotiations do not result in a trade deal.
According to the Civitas think-tank, Britain can use the fact that it imports more from the EU than vice versa to remove the costs of trade tariffs to domestic industries, and pocket £4billion of extra public funding in the process.
The imposition of tariffs – which exist all over the world – has become a bogeyman fear of Brexit opponents, who fear they will usher in an economic apocalypse that will cripple Britain for good.
However, according to the new paper from Civitas, the UK is in a much stronger position than the rest of the EU to deal with such an outcome, and could gain billions of pounds for the public purse in the process.
“Mitigating the impact of tariffs on UK-EU trade” – which can be read in full here – says that the Government can use income from tariffs it will collect from the EU to devise its own £8.8billion industrial support package.
By offering funds to promote research and development, giving cash to disadvantaged regions, slashing electricity prices and also opening a short-term transition fund, the UK could turn the situation to its advantage.
The measures all comply with the rules of the World Trade Organisation, and would not be open to challenge from foreign governments.
According to the calculations in the study, the costs of the programs will be more than offset by UK revenues from tariffs it would collect from EU companies.
Most people in the UK – and members of the government – want to maximise free trade with the EU in whatever settlement is finally negotiated.
But some fear that belligerent negotiators in Brussels could sabotage that aim and spark the imposition of tit-for-tat trade barriers.
The Civitas publication shows that – even in this kind of sub-optimal scenario – the UK is far from helpless, and could turn the situation to its advantage.
A new release announcing the publication said: “The analysis should give British negotiators confidence that they can walk away if the right EU trade deal is not forthcoming from the 27 remaining members.
The report’s author, William Norton, added: “The real conclusion of this paper is that the UK should stop obsessing about the EU and worrying about how they will react.
“We should get on with the task of managing our own affairs in our own interests, and leave the EU to worry about their own problems.
“That is the only way to make a success of Brexit. The EU-27 aren’t going to spend much time trying to help us. What does ‘Brexit’ mean? It means having nobody else to blame.”