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Argh. Can we not do the 'new FTAs vs Brexit GDP comparisons'.
Of course new FTAs aren't going to make up for leaving the single market in GDP terms. They can't, because FTAs involve less economic integration (and therefore less of a sovereignty trade-off).
Of course new FTAs aren't going to make up for leaving the single market in GDP terms. They can't, because FTAs involve less economic integration (and therefore less of a sovereignty trade-off).
Compensating for Brexit is not the reason to do FTAs. These 'gotcha' arguments have more than a whiff of fighting the last war about them.
The reason the economic hit from leaving the single market is relatively high is precisely because the Brexiteers had a point; it was so much more than just a trade agreement.
You can argue the econ hit isn't worth the sovereignty but ultimately that argument was lost in 2016
You can argue the econ hit isn't worth the sovereignty but ultimately that argument was lost in 2016
Final point - small projected gains from FTAs are not unique to the UK, they're the nature of the beast. It's not like we're doing uniquely crap FTAs.
Projected gain to EU GDP from EU-Mercosur over 15 years is +0.1%. Projected gains to US and EU GDP from TTIP were about +0.5%
Projected gain to EU GDP from EU-Mercosur over 15 years is +0.1%. Projected gains to US and EU GDP from TTIP were about +0.5%
PS: modelled GDP hit from an FTA Brexit is around -5% (NB that's slower growth, *NOT* the economy shrinking); modelled hit from WTO Brexit is around -8%.
So even an FTA with the EU, our largest trading partner, on our doorstep, is only worth about +3% compared to not having one.
So even an FTA with the EU, our largest trading partner, on our doorstep, is only worth about +3% compared to not having one.
Does all this mean FTAs are pointless? Of course not. It just means GDP modelling doesn't really capture their benefits and isn't a very good yardstick.
