GENEVA: As British Prime Minister David Cameron struggles to accommodate eurosceptics in his own party, trade experts warn that quitting the European Union would force Britain not just to rework trade relations with the EU, but also with the EU's trade partners and probably the World Trade Organization.
Moreover, it would struggle to maintain the same level of trading rights it now enjoys, they say, including those that benefit London's financial centre, a major contributor to the national economy and a significant exporter.
Cameron has pledged an in-out referendum in 2017, and opinion polls suggest the public is inclined towards the exit, which would leave Britain in need of a deal to ensure exports to the EU are not hit with EU import tariffs, which averaged 5.3 percent in 2011, and 13.9 percent in agriculture.
"I don't see any advantage in doing it," said Roderick Abbott, a Briton who served as deputy director-general of both the WTO and the European Commission's trade department.
"Could we negotiate a free trade area with the EU? It would be feasible, but you have to be sure that's what the other side wants. Having said 'we want to shut the door and stop paying into your budget', can we then say 'please give us free trade for free?'"
About half of Britain's goods exports and over a third of its services exports go to the EU, about 234 billion pounds ($356 billion) in 2011.
Imports were 261 billion pounds. Without a good deal, Britain could find itself in a worse position than competing exporters, such as Norway, Switzerland, South Africa, South Korea and many others, which have preferential trade agreements with the EU.
Those agreements gradually eliminate tariffs on goods traded between the two sides. A WTO study shows virtually all South Korea's exports to the EU will be duty-free by 2016. By leaving the EU, Britain would also lose the duty-free advantages on the other side of those deals.
That would mean paying tax on exports to countries like Switzerland, its biggest non-EU market in 2012 after the United States.
The EU is currently pursuing deals with the United States and Japan, too. The U.S. deal, championed by Cameron, seeks to go far beyond tariff cuts and make it much easier for European and U.S. firms to do business in each other's markets.
"The size of the British economy is still to be reckoned with in the world economy but of course its share is rapidly shrinking, and that means the willingness of other countries to prioritise the UK ahead of others is probably going to shrink," said Fredrik Erixon, who heads the European Centre for International Political Economy in Brussels.
HAGGLING OVER QUOTAS
Petros Mavroidis, a WTO expert at Columbia University, said there would be no need to renegotiate Britain's membership of the global trade body, since both it and the EU are already members.
But that would depend on Britain not trying to take any of its rights to EU agricultural subsidies and quotas with it.
indiatimes.com
Moreover, it would struggle to maintain the same level of trading rights it now enjoys, they say, including those that benefit London's financial centre, a major contributor to the national economy and a significant exporter.
Cameron has pledged an in-out referendum in 2017, and opinion polls suggest the public is inclined towards the exit, which would leave Britain in need of a deal to ensure exports to the EU are not hit with EU import tariffs, which averaged 5.3 percent in 2011, and 13.9 percent in agriculture.
"I don't see any advantage in doing it," said Roderick Abbott, a Briton who served as deputy director-general of both the WTO and the European Commission's trade department.
"Could we negotiate a free trade area with the EU? It would be feasible, but you have to be sure that's what the other side wants. Having said 'we want to shut the door and stop paying into your budget', can we then say 'please give us free trade for free?'"
About half of Britain's goods exports and over a third of its services exports go to the EU, about 234 billion pounds ($356 billion) in 2011.
Imports were 261 billion pounds. Without a good deal, Britain could find itself in a worse position than competing exporters, such as Norway, Switzerland, South Africa, South Korea and many others, which have preferential trade agreements with the EU.
Those agreements gradually eliminate tariffs on goods traded between the two sides. A WTO study shows virtually all South Korea's exports to the EU will be duty-free by 2016. By leaving the EU, Britain would also lose the duty-free advantages on the other side of those deals.
That would mean paying tax on exports to countries like Switzerland, its biggest non-EU market in 2012 after the United States.
The EU is currently pursuing deals with the United States and Japan, too. The U.S. deal, championed by Cameron, seeks to go far beyond tariff cuts and make it much easier for European and U.S. firms to do business in each other's markets.
"The size of the British economy is still to be reckoned with in the world economy but of course its share is rapidly shrinking, and that means the willingness of other countries to prioritise the UK ahead of others is probably going to shrink," said Fredrik Erixon, who heads the European Centre for International Political Economy in Brussels.
HAGGLING OVER QUOTAS
Petros Mavroidis, a WTO expert at Columbia University, said there would be no need to renegotiate Britain's membership of the global trade body, since both it and the EU are already members.
But that would depend on Britain not trying to take any of its rights to EU agricultural subsidies and quotas with it.
indiatimes.com
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