December 21, 2016

UK firms need barrier-free trade with EU after Brexit, says business lobby group

The CBI has warned that UK firms must have “barrier-free” access to European markets after Brexit.

It said UK companies should not be subject to tariffs, with only “minimal” other barriers in place. It has also called for a migration system that allowed firms to obtain the skills and labor they need.

The report comes after conversations with trade associations and firms of all sizes across the UK.
“There are serious concerns in the business community about disruption if the day after the UK leaves the EU, its final ‘deal’ is not complete, with all trading and regulatory issues full ironed out,” it said.

There are some companies for whom avoiding high tariffs on their goods trade is critical, and others who prioritise avoiding non-tariff barriers to trade, particularly around services,” it stated. “Additional barriers to any sector’s trade will be detrimental to other sectors. A new arrangement with the EU must therefore be open and comprehensive, covering goods and services.

L. Alan Winters writes in his article on international trade regulation and job creation, “The effects of major trade policy changes on aggregate employment are mixed, although there is evidence that, in the long term, trade liberalizations boost employment (at least in developing countries) and that more open economies have higher levels of employment, other things being in equal.”

He advises policymakers to not expect international trade policy to have major or even possibly predictable effects on aggregate employment. He says “Policymakers concerned about employment levels should think about the aggregate economic balance and labor market institutions, and not interfere with international trade.”

Related articles:
International trade regulation and job creation, by L. Alan Winters

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