EU members have a common trade policy and are represented by the EU in all trade negotiations with the rest of the world. After Brexit, Britain could look for new trade deals with countries such as China, India and the United States. CEP analysis shows that trade with such non-EU countries could indeed rise after Brexit. But the magnitude of these increases is not enough to offset the decline in trade with the EU. Also, the US has already stated that it would not do a trade deal with Britain alone.
Even without Britain, the EU is the world’s second largest exporter behind China and the world’s second largest importer behind the United States. This makes the EU a desirable trade partner and gives the EU an important voice in trade negotiations. Since Britain is a sixth of the size of the EU market, Britain alone would have less bargaining power in international trade negotiations than the EU currently has. CEP research also shows that the EU has pursued trade policies that have benefited British households even more than consumers in other EU countries. This all means that reorienting the focus of Britain’s trade policy away from Europe is unlikely to make up for the loss from reduced trade with the EU.View all facts