Sam Lowe at the Centre of European reform says not in a clear and interesting piece. Some quotes from him.
1. Whether we leave with a deal or not, buisness will have to adapt to
"to new customs procedures, regulatory requirements and restrictions on the provision of cross-border services... acknowledged by the UK government, with the recent publication of its border operating model, which spells out all the things companies trading between the EU and UK will need to do, whether there is a trade deal or not.
2. He continues "Furthermore, the macroeconomic impact of exiting the transition period with a free trade agreement is not very different from exiting without".
3. So why bother with an agreement at all? He sees a number of reasons:
A. Duty-free and quota-free trade
"A free trade agreement will still result in non-tariff barriers to trade. But it could remove all tariffs and quotas (so long as the products meet rules of origin requirements)".
And this is valuable in certain industries:
" For British exporters of products facing high tariffs, such as cars (10 per cent) and lamb (a chilled carcass faces a combined tariff of 12.8 per cent + €171.3/100kg), duty-and-quota free trade is essential if they are to remain competitive."
And it might help with reducing border frictions "For example, it could reduce the rate of physical inspection at the border on products of animal origin from up to 50 per cent of consignments to near zero. A trade deal could also create a framework for the continued recognition of professional qualifications in both the EU and UK, and make it easier for people to fulfil short-term services contracts in both territories."
B. Supplementary benefits
"The EU is yet to decide whether to allow businesses to conduct some EU-focused financial services out of the UK by granting the UK’s regulatory regime ‘equivalence’. It also needs to decide whether to recognise the UK’s data protection regime as ‘adequate’, and therefore whether to allow companies to continue storing the personal data of EU citizens on servers located in the UK. While these are unilateral decisions for the EU to take, and technically unrelated to the trade talks with the UK, political realities mean that the EU is much more likely to grant the UK equivalence and adequacy if there is also a free trade agreement."
He also suggests some others essentially around help with customs co-operation "A free trade agreement would probably include provisions that formalise co-operation between EU
and UK customs agencies. It would also create a more positive working environment, rather than
the inevitable animosity that would accompany failure to reach a deal" which would likely help with the Northern Ireland issue and the political goodwill from reaching an agreement.
