EU trade deal after Brexit would take more than 2 years: UK MPs
The MPs called on the U.K. to ignore existing models such as the Swiss or Norwegian set-ups | Dan Kitwood/Getty Images
The U.K. would “start from scratch” renegotiating trade deals and would not be guaranteed access to the single market after Brexit, a cross-party group of MPs found in a special parliamentary report published Tuesday.
The influential House of Commons foreign affairs committee, whose MPs are split evenly on each side of the referendum debate, unanimously signed off the report, which said that the political fallout of a U.K. withdrawal would not favor a quick deal despite the economic rationale for both sides.
It said any agreement between London and Brussels would take longer than two years, leaving Britain outside the single market on simple World Trade Organization tariff rules. The U.K. would also have to start negotiating new deals with countries who already have trade agreements with the EU. This could take up to 10 years, the committee said.
However, the committee warned there were also “severe and entrenched challenges for the U.K.” posed by staying in the EU – notably the migration crisis.
While the Leave campaign will highlight dangers picked up in the report of staying in the EU, Downing Street will be delighted at the core message of the report that the consequences of Brexit are unknown.
The MPs called on the U.K. to ignore existing models such as the Swiss or Norwegian set-ups, to pursue “a bespoke arrangement, including a comprehensive Free Trade Agreement.”
“As time heals,” the report says, “mutual interest will progressively trump any short-term hurt feelings and both the climate for, and interest in, agreement in the mutual interest would improve.”
A vote for Brexit could also weaken the U.K.’s international clout – and that of the EU – the MPs warned. “Leaving the EU would limit the UK’s international reach, not least by removing the UK’s influence over those European Commission-led instruments.”
They added that Brexit would leave the EU less economically liberal and much more likely to take a softer stance against Russia – both of which were not in the U.K.’s interests.
The MPs’ report found that the challenges posed by Brexit were “considerable” but none were “insurmountable.” “In our view, swift action by the Government and FCO [Foreign and Commonwealth Office] could mitigate many of these potential problems, and indeed open up new opportunities for the U.K. to redefine its international role.”
However: “A vigorous response would require resources and a decision to double, or even treble, the budget of the FCO.”
On the other hand, MPs also expressed concern about the U.K.’s influence in driving EU foreign policy, as well as “the slow and cumbersome character of EU policy-making” and its “failure to grapple with extreme instability on its borders.”
If these problems are not addressed in the near future they could evolve into “major long-term risks for the U.K. inside the EU,” the report said.
“Complacency on the part of the Government and FCO could ensure that the immediate risks we have outlined here become much more severe and entrenched challenges for the U.K. in future, if it remains inside the EU,” the MPs stated.