UK will be worse off after Brexit: RAND Corp.
The UK will be in a less favorable situation to strike new trade deals after leaving the European Union (EU), a prominent think tank has warned, drawing a gloomy future for the post-Brexit Britain under “almost all scenarios.”
The RAND Corporation, a US-based non-profit group, made the prediction in a report on Tuesday, which measured percentage and monetary changes in GDP growth, GDP per capita, trade and foreign direct investment for the UK, the EU and the US under eight different trade scenarios.
According to the research, abiding by World Trade Organization’s rules after the divorce would push the UK further away from EU standards, significantly harming British businesses’ ability to trade with the bloc in the long run.
In case of a “hard Brexit,” a possibility that UK Prime Minister Theresa May has not ruled out, a free trade agreement between the UK and the EU would lead to a net decline of 1.9 percent in Britain’s GDP 10 years after Brexit.
A trade agreement with the US would lead to a 2.5-percent GDP decline while a UK-EU “transitional zero-tariff agreement” would see the drop decrease to 2.1 percent.
The only beneficial scenario, according to RAND, would be a trilateral UK-EU-US agreement, which would see the UK’s GDP grow by 2.2 percent.
“The analysis clearly shows that the UK will be economically worse-off outside of the EU under most trade scenarios,” said Charles Ries, the lead author of the report.
“It is in the best interests of the UK, and to a lesser extent the EU, to achieve some sort of open trading and investment relationship post-Brexit,” he added.
Conservatives lawmakers in Parliament, as well as former cabinet ministers, say the time has come for May to be completely open on how much Brexit will cost.
The PM’s inability to reunite a cabinet riddled with division about the country’s overall Brexit has added to the pressure.
EU leaders have been increasingly frustrated about divisions in May's cabinet over Brexit, saying they were still unsure what the UK wanted, even after five rounds of negotiations.
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