A Trade Policy for a Brexited Britain

The primary objective of trade policy should be to promote the interests of UK consumers, not producers. The UK’s best post- Brexit trade policy should therefore be to trade as freely as possible with the rest of the world. Free Trade would bring considerable benefits to the UK. These benefits include lower consumer prices, greater productivity and higher wages. Free trade is also progressive in its impact: the poor benefit proportionately more than those who are better off. It is in the interests of UK consumers and UK importers generally to buy as cheaply as possible, which implies that tariffs are a form of self-harm. The UK should therefore commit to a policy of unilateral free trade with the rest of the world, thereby eliminating all barriers to imports, and it should do so regardless of whether other countries impose tariffs on their imports from the UK or not. Unilateral free trade should be supplemented by efforts to reach free trade agreements with our major trading partners. The priority should be to seek deals with the United States, Canada, Australia, New Zealand and the EU. The purpose of these deals should be to promote free trade, and it important to avoid deals that focus on other objectives such as regulatory harmonisation. In the event that there is no trade deal with the EU, the default position should be that a Brexited Britain would continue to trade with EU on the same tariff-free basis as it presently does. The UK does not need a trade deal with the EU and the UK should be willing to walk from any bad trade deal. The UK bargaining position with the EU on trade issues is then simple. The UK should be willing to seek a trade deal with EU provided that such a deal leads to greater free trade, but it should make it clear that it regards no trade deal as better than a bad one