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- How the UK can soften the hard Brexit? - The ifo Institute
How the UK can soften the hard Brexit? - The ifo Institute
The Ifo Institute in Munich hasIfolculated how the United Kingdom can keep the negative economic consequences of a hard Brexit as small as possible: by unilaterally waiving all import duties after March 29.
"That would be a very smart trick for the British government," says Gabriel Felbermayr, head of the ifo Center for International Economics. "Without British import duties, consumption in the Kingdom would fall by only 0.5 percent, much less than with a hard Brexit with import duties a la World Trade Organization (WTO). This would shrink consumption by 2.8 percent. With comprehensive free trade agreements with many countries a la Global Britain, consumption would still fall by 1.4 percent."
"In the case of food in particular, WTO tariffs would lead to extreme price effects, presumably in the order of 12 to 15 percent, similar to those for cars, textiles and shoes," Felbermayr continues. "It is questionable whether this is so favourable for the British government from a domestic political point of view.“ In any case, the question is whether Great Britain is at all technically capable of implementing comprehensive customs controls on its high imports.
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