Britain the losses of Brexit outweigh the gains of the trade deals signed after it

Emily Thornberry: "The government's big economic bet is to offset the losses caused by Brexit by boosting our trade with the rest of the world, but this analysis shows that that bet has always been doomed, even according to the government's own numbers."

According to an analysis of government figures, it turns out that the value of all trade agreements entered into by the United Kingdom since its exit from the European Union does not exceed 50 pence per capita annually.

In a report published by the newspaper " The Independent" ( Independent ) British writer John Stone said that all agreements Boris Johnson brand new after Britain 's exit from the European Union will achieve a combined economic benefit ranging between 3 and 7 £ only per capita over the past 15 next, according to figures official government.

UK-EU trade plunges in first month of Brexit rules

The writer pointed out that this small economic boost, which contributed to GDP growth by about 0.01% to 0.02% only, is not comparable to the economic hit resulting from Britain's exit from the European Union, which the government estimates at 4% of GDP during the same period.

According to an analysis by The Independent in collaboration with leading academics at the University of Sussex's Trade Policy Monitor in the UK, popular FTAs ​​"barely help the UK meet the challenge of making up for the shortfall in GDP in the wake of Brexit".

The writer mentioned that the British Prime Minister boasted about deals that, in his words, would create “a new dawn” and represent “Global Britain at its best,” but among the dozens of deals announced since Brexit, only two are expected to have a significant economic impact. in the absolute.

Brexit losses

Official estimates from the Office of Budget Responsibility put the loss of Brexit at more than £1,250 per capita over the coming years, more than 178 times the country's gain from trade deals.

As the analysis shows, the vast majority of the free trade agreements announced by the government, such as the one with South Korea, Singapore, and Vietnam, are merely attempts to replace those countries' treaties with the European Union, which Britain previously enjoyed as a member of the union. .

The writer quoted the prominent trade economist Professor L. Alan Winters, who conducted the analysis in cooperation with the research officer at the Center Guillermo Larballister, that these deals do not add any commercial gains to the United Kingdom, and since they are not ideal alternatives, they in fact harm the Kingdom slightly.

Labor took advantage of these results to announce that the government had lost its bet on Britain's prosperity, and called on the opposition to improve Johnson's Brexit trade deal with the European Union in a way that "enables the United Kingdom to stop its trade hemorrhage with Europe."

According to a source in the Ministry of International Trade, the analysis was based on "old and consistent" data, although most of the data were issued last summer as part of the government's strategic efforts to conclude agreements.

Commenting on the findings, a spokesperson for the Department for International Trade said the Global Trade Outlook published in September showed that the center of gravity in global trade was moving away from Europe towards the fast-growing markets of the Asia-Pacific region. promising, and seizing the enormous economic opportunities as a flexible and independent trading nation."

But according to the analysis prepared by experts for The Independent, Britain's new agreement with Japan and presented by the government as a major achievement beyond what was agreed with the European Union, is actually worded very similarly to the EU-Japan agreement, with some small differences.

In this case, a technical change in customs rules is expected to overshadow the benefits of a slight extension in digital trade, which would put some UK exporters at a disadvantage compared to their EU counterparts.

Compared to the EU's agreement with Japan, the academics wrote, "For no deal, the government estimated that the Japan agreement would raise UK GDP by about £1.5 billion (0.07%, or £22 per capita), but compared to what the UK would have achieved." If you don't leave the EU, the gains will be minimal or negative."

Miserable trade deals

With regard to the deals concluded with Australia and New Zealand, the Kingdom is not expected to achieve any new economic benefit from them, because these countries participate in a small percentage in the United Kingdom’s trade, and the analysis also indicates that the agreements have not been signed or ratified yet, and they are currently considered Just "agreements of principle".

The World Trade Ministry source added that the government is seeking to conclude another set of ambitious trade agreements with major economies such as India, Canada, Mexico and the Gulf - although these agreements are not tangible - and in recent months the government has stopped claiming that it is about to conclude a trade agreement with the United States after The defeat of Donald Trump that dashed any hope of that happening.

But academics at the UK Trade Policy Monitor do not believe that trade agreements can offset the economic damage caused by Brexit, and the academics say, "As non-European partners account for about half of the UK's trade exchanges, it is in order to offset the loss of Brexit. From the European Union, which the Budget Office estimated at 4%, agreements must be made with each of them to bring about trade changes that would create a 4% increase in GDP.”

“But the sad thing about the matter - as they put it - is that the government is happy to accept the economic losses resulting from leaving the European Union in exchange for political gains mainly in strengthening its sovereignty, and concluding trade agreements with other countries is just a way to make the most of a losing option from an economic perspective. ".

According to Emily Thornberry, the shadow international trade secretary, the government's big economic bet is to offset the losses caused by Brexit by boosting our trade with the rest of the world, but this analysis shows that that bet has always been doomed, even according to the government's own figures. ".

“That is why it is time to change course, the government cannot continue to pursue ineffective policy, and instead, we need to take action to stem the bleeding of our trade with Europe, and fix the loopholes in the Brexit agreement,” Thornberry adds.