UN study projects $32 billion loss for UK post no-deal Brexit

Brexit Beyond Tariffs: The role of non-tariff measures and the impact on developing countries maintains that without UK-EU agreements, or non-tariff measures (NTMs), in place, post-Brexit exports could fall by $32 billion.

Potential losses under a “no-deal” Brexit from tariffs are estimated at between $11.4 billion and $16 billion of current exports – and the new study says NTMs would double those losses.

The study also projects that even if a “standard” free trade agreement were to be signed by the parties, the UK’s exports could still drop by nine per cent.

This is because standard trade deals normally focus on reducing or eliminating tariffs rather than NTMs and Britain has already indicated it will diverge from the EU in terms of regulation.

As the EU market accounts for 46 per cent of the UK’s exports, a no-deal Brexit would deal a major blow to the UK’s economy, according to the study by the Geneva-based agency. 

Moreover, mounting trade costs due NTMs and potentially rising tariffs would more than double the adverse economic effects of Brexit for the UK, EU and developing countries, the study notes.

NTMs include regulatory measures protecting health, the environment and traditional trade policies, such as quotas.

Regulations affect most of the products we use in our daily lives, from packaging requirements and limits on pesticide usage to restrictions on toxins in toys and emission standards for cars.

“EU membership has its advantages to deal with non-tariff measures that even the most comprehensive agreement cannot replicate. This offers important lessons to other regions trying to deal more effectively with such non-tariff measures,” said UNCTAD Director of International Trade Pamela Coke-Hamilton.

Developing countries boon

On the flipside, a no-deal Brexit could offer opportunities to developing countries, as trade barriers between the UK and the EU would benefit third countries suppliers.