A briefing on the UK's choice of trade arrangements outside of the EU

This briefing note, prepared by Loughborough University for the ESRC UK in a Changing Europe Initiative, reviews the choices for UK trade arrangements after Brexit. It draws on public domain research by leading UK trade researchers and on the presentations and discussions at a conference, hosted by Loughborough University at our Queen Elizabeth Park, Stratford, London Campus, on Dec 9th, 2016. It reviews the economics arguments for free trade, the institutional arrangements that support free-trade and summarises some key statistics about UK external trade. It also argues that the presentation of Brexit as a binary choice between ‘soft’ (retaining current trade arrangements with the EU) and ‘hard’ (jettisoning all existing trade arrangements in order to start out afresh) is a dangerous oversimplification. This ignores the realities of negotiation with the EU and other trade partners (the choice is not all or nothing, there is opportunity in negotiation to agree anything across a wide range of potential outcomes). The key policy challenge is choosing between a slow and managed Brexit, extended over a period of five to seven years, ensuring low costs of trade between the UK and the EU and avoiding substantial economic costs, or a rapid Brexit which is likely to reduce GDP by between 5 and 8 percent.