Those in favour of hard Brexit, like Secretary of State for International Trade, Dr Liam Fox seem to think once we leave the EU we needn’t bother about trade with the EU so much, as we will have the freedom to trade with the rest of the world in a free and easy manner.
After taking a look at GDP data from the World Bank here, I don’t share the good doctor’s prognosis.
The US economy is currently the largest economy on the planet with 24.7 per cent of global GDP. The EU (including the UK) is second largest with 22.4 per cent of global GDP.
Currently, as a member of the EU, the UK is part of the second largest global trading block. That makes the EU (and by extension the UK) a very lucrative trading partner.
But when we leave the EU, the EU will still be the second largest trading block (albeit with a reduced share of global GDP down to 18.5 per cent). The UK will fifth largest trading block with 3.9 per cent of global GDP.
Post Brexit the EU are not going to give the UK an easy trade deal, and the US and China will still see the EU as their primary trading partners rather than the UK.
Now, imagine you are India, Brazil, Canada, or any of the other 160 countries that are smaller than the UK but still make up one-third of world’s GDP. Now ask yourself would you rather focus your time on getting good trade deals with the US, the EU and China, or would you want to get spend your time on thrashing out a trade deal with the UK?
I’m generally not a fan of pie charts for the reasons given here, but in this case I think a pie chart illustrates my point well – see below.
The UK economy is significantly smaller than the big three trading blocks and is broadly comparable to Canada, Brazil and India. We will not be one of big players.