What would the barriers to trading with the EU be if the UK left?

27 April 2016

As a member of the EU, Britain is part of a customs union with other members – which means that all tariff barriers on trade in goods and services have been removed. Importantly, the EU has also reduced non-tariff barriers* to trade to create a single market.

Following Brexit, trade costs between Britain and the EU could possibly rise, because tariffs and non-tariff barriers to trade may well be implemented. The UK would also miss out on future steps that the EU takes towards deeper integration and the reduction of non-tariff barriers within the EU. But the outcome could go either way.

In an optimistic scenario, Britain would get a free trade deal like Norway, so Brexit would not create tariff barriers with the EU. But Britain might see a rise in current and future non-tariff barriers because it would still need to comply with rules on country of origin and potential anti-dumping charges, the way Norway does.

In a pessimistic scenario, Britain would not immediately strike a trade deal with the EU, and in the interim trade would be governed by WTO rules. In addition to non-tariff barriers, the EU would then impose tariffs on British exports, as it does on the United States.

* Non-tariff barriers include measures like border controls, country of origin checks, differences in regulations over things like product standards and safety, and threats of anti-dumping duties.

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