Expert group responds to Economist for Brexit’s claim that food prices will go down when we leave the European Union

By Brexit Challenge Team, 21/10/2016

In response to criticism from Economists for Brexit, members of the expert group that support the Brexit Challenge process have written a letter to the Financial Times today (Friday 21 October) - here's what they had to say:

Sir, Professor David Blake and others (Letters, October 19) attack Nick Clegg’s analysis of the impact of Brexit on food prices, asserting that it would be “absurd” to assume that the UK will continue to maintain high EU tariffs on food and other goods outside of the single market. Instead, they believe UK will choose to cut tariffs unilaterally, “slash[ing] the cost of consumer goods”.

As a group of independent experts advising Mr Clegg on Brexit-related policy issues, we stand by our view that trade tariffs would be an inevitable consequence of a hard Brexit. Once we leave, the EU will apply the Common External Tariff to the UK in accordance with its customs legislation. In time, a comprehensive Free Trade Agreement may be agreed that will lower those tariffs, but this will most likely take many years to conclude.

For the UK to choose unilaterally to drop tariffs on imports from the EU would be an act of economic self-harm. WTO rules dictate that if we drop tariffs on imports from one country, we are obliged to do the same for imports from the rest of the world.

That would at a stroke undermine any prospect of securing FTAs, as we would already have unilaterally removed our tariffs and would find countries unwilling to offer reciprocal tariff reductions. We would have squandered our negotiating capital, including with the EU.

Second, tariffs are generally set where they are in order to protect domestic producers. We question whether British farmers would welcome Prof Blake’s suggestion that the government should unilaterally permit tariff-free access to our market for foreign agricultural imports.

But the clearest possible evidence that Prof Blake and his fellow Economists for Brexit are mistaken comes from the secretary of state for international trade. In a speech to the WTO on September 27, Liam Fox declared that the government will “continue to uphold” the EU’s existing tariff schedules when the UK leaves the Union. These schedules include very high tariffs on food, drink and the raw ingredients on which so many UK manufacturers rely.

Roderick Abbott, Former Deputy Director General, WTO
Anthony Cary, Former Head of Chris Patten’s cabinet at the European Commission
Sir Robert Cooper, Former adviser to Javier Solana and Catherine Ashton
Andy Lebrecht, Former UK Deputy Permanent Representative to the EU
Ian Mulheirn Oxford Economics
Prof Dame Helen Wallace

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