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The UK would then be trading with the EU at a disadvantage when compared to other nations which do have bilateral trade deals with the EU. Similarly there is no reason why other third countries like (say) India must give the UK the same concessions they have given the EU and every reason why they might not (size of market, history, geopolitical tensions etc.).
To get an idea of the effect of this I refer you to this paper.
Abstract: The UK exit from the European Union (Brexit) is likely to have a range of impacts, with trade flows likely to be most affected. One possible outcome of Brexit is a situation where WTO tariffs apply to merchandise trade between the UK and the EU. By examining detailed trade flows between the UK and all other EU members, matching over 5200 products to the WTO tariff applicable to external EU trade this paper shows that such an outcome would result in significantly different impacts across countries. Our estimates of exposure at the country level show an extremely wide range with reductions in trade to the UK falling by 5% (Finland) to 43% (Bulgaria) taking into account the new tariffs and the elasticity of the trade response to this price increase. Food and textiles trade are the hardest hit, with trade in these sectors reducing by up to 90%
Median elasticity assumption results in a fall in EU to UK trade by 30% and a 22% reduction in UK to EU trade. The mean elasticities are slightly higher and would generate falls of 37% in EU-UK trade and 27% in UK-EU trade. The upper and lower bounds of the estimates are given by the maximum elasticity estimates which would generate trade falls of 56% and 45% in EU-UK and UK-EU trade respectively and the minimum estimates would result in trade declines of 17% and 12% respectively.
These are massive reductions in trade and are based on Minimum WTO tariffs.
And non of the above takes into account the effect of devaluation, which will devastate EU-UK trade much further.
Index of Frank's Diaries
EU's ratio is extremely low --AS IS "free trade" commitment-- by comparison to that which so-called developing nations impose on imports from any and all trade "partners". And you can bet that 0.4 summarizes trade sanctions imposed on NATO's "adversaries."
Compare that benchmark to current costs of EU interstate tariffs which the UK loses as "third-country". Between member countries customs duties are forbidden. EU need not declare a new CCT regime in order for UK gov't to appreciate the "disadvantages" of out-group, international sovereignty ... unless the UK gov't declares itself a NATO adversary. Then you may expect a truly frosty welcome to the "special relationship."
But whichever cost the other 99.6% bear is sufficient to tip the UK into a permanent state of insanity or piracy. As it is, no one can say if the gov't has prepared for any EU demand for reimbursement of the cost of inspection and compliance (abrogated by UK in its retarded position paper) on to the balance of charges on EU budget outstanding.
For example in March OLAF slammed lax UK border controls and recommended the European Commission reclaim 2 billion the agency said was lost because Britain had failed to apply the correct EU duties on imports of Chinese clothes and footwear in recent years.
Then, there's the whole move of euro-denominated R&D and derivatives trading out of the City. ISDA shure as shinola isn't paying for that.
Diversity is the key to economic and political evolution.
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