World Trade Organization chief Roberto Azevedo warned about the potential economic cost of a Brexit, stating that leaving the EU would cost UK consumers £9 billion in annual additional import tariffs.
Azevedo told The Financial Times that a Brexit would require the UK to negotiate its membership of the WTO, as it is currently represented by the EU – this is on top of having to strike new trade deals with countries around the world.
“Pretty much all of the UK’s trade [with the world] would somehow have to be negotiated,” he said.
“It is extremely difficult and complex to negotiate these trade agreements. And slow as well… Even if you are in a position to negotiate quickly with all these other members it doesn’t mean that they will be in a position to negotiate with you because they have their own priorities.”
Cost of tariffs
According to Azevedo, the estimated the cost of additional tariffs on goods imports to British consumers after leaving the EU would be as high as £9 billion, while UK exports would be subject to a further £5.5 billion in tariffs.
Mr Azevedo told the FT: “The consumer in the UK will have to pay those duties. The UK is not in a position to decide ‘I’m not charging duties here’. That is impossible. That is illegal.”
He added that determining whether to remain in the EU or leave “is a very important decision for the British people.”
“It is a sovereign decision and they will decide what they want to decide. But it is very important, particularly with regard to trade, which is something very important for the British economy, that people have the facts and that they don’t underestimate the challenges.”
Azevedo’s warning follows the recent publication of a report by the Institute for Fiscal Studies (IFS) which said that public finances would take a £20 billion to £40 billion hit in 2019/20 in the event of a Brexit – if GDP is 2.1% to 3.5% lower over the period as forecast by the National Institute of Economic and Social Research.