Finance / Think tank urges UK to commit to unilateral free trade post Brexit
Think tank urges UK to commit to unilateral free trade post Brexit
18 August 2017
Import tariffs are a form of "self-harm" and should be scrapped after Brexit to lower prices for consumers, according to a free market think tank.
Walking away from the European Union without a deal on future relations would not be a disaster for the UK because the country could still enjoy most trade benefits, the Institute for Economic Affairs (IEA) said.
Britain should unilaterally offer free trade as well as striking agreements with major partners such as the United States, Canada and Australia, it urged.
The move would help the poorest by cutting the cost of goods being imported into the UK but would leave some businesses exposed to being undercut by cheaper imports.
"It is in the interests of UK consumers and UK importers generally to buy as cheaply as possible, which implies that tariffs are a form of self-harm," the IEA report said.
“The UK should therefore commit to a policy of unilateral free trade with the rest of the world, thereby eliminating all barriers to imports, and it should do so regardless of whether other countries impose tariffs on their imports from the UK or not.”
The UK would revert to World Trade Organisation (WTO) rules with the EU if a post-Brexit deal is not struck and consumers across Europe would be hit hardest if Brussels then imposed tariffs, the IEA said.
Jamie Whyte, IEA research director, said: “There are many myths being perpetuated about trade policy – and more specifically about the UK’s relationship with the EU – that must be debunked.
“Many people believe that disaster will befall us if we do not forge a deal with the EU. In fact, we could unilaterally eliminate all import tariffs, which would give us most of the benefits of trade and export to the EU under the umbrella of the WTO rules. Then we can seek free trade deals with all major trading partners, including the EU.”