Economist details exactly why UK-EU trade WON’T collapse overnight without a Brexit deal

AS the deadline to agree a trade agreement between Brexit Britain and Brussels looms closer and closer, an economist has claimed a no deal outcome will not collapse UK-EU trade overnight.

The UK formally left the European Union back in January but negotiations are currently at a standstill with neither side able to break the deadlock. Concerns over a no deal outcome have been raised with seemingly no progress made in recent weeks.

Prime Minister Boris Johnson has vowed to leave by the end of the transition period in December, with or without a deal in place.

Although businesses have been told to prepare for a no deal outcome, an economist has detailed why UK-EU trade will not collapse overnight without a deal.

Economist Catherine McBride claimed trade does not need an agreement and points out the EU’s biggest markets are the US and China.

She added an agreement does not “generate trade” but the consumer demand and business suppliers do.

Ms McBride said: “The idea that trade or financial ties between the EU and the UK would ‘collapse overnight’ without an agreement is not something you would expect to read in the financial media.

“Trade agreements do not generate trade - consumer demand and business suppliers do.

“Trade agreements can make trade easier but if consumers want to buy something, then that demand will be supplied with or without a trade agreement - even if the product is banned by the government.”

Ms McBride also claimed the very worst outcome would see tariffs added to products crossing from the EU into the UK and vice versa.

But she argued it would become a bigger problem for the EU.

She said: “At the very worse, if tariffs are added to products crossing from the EU into the UK and vice versa, then EU-UK trade would merely become more expensive.

“But this would be a bigger problem for the EU than the UK because the UK is a net importer of goods from the EU.

“It is the UK that provides a lucrative market for EU merchandise.”

Source: Express