Britain's Free-Trade Dilemma: Threats to Jobs and Prosperity

Strategic Insights -

Senator Phil Gramm's proposed free-trade agreement between the US and the UK would damage both countries, as it would require the UK to leave the European Union. This would jeopardize 3 million British jobs that rely on exporting to Europe. The UK's trade policy is currently managed under the EU, providing tariff-free access to 375 million consumers. In contrast, leaving the EU would result in potentially 8.7% tariff barriers from the EU. American companies, such as Ford Motor Company (UK), also rely on the UK's EU membership to export to the EU market.

Key Takeaways:

  • The UK's trade policy is managed under the EU, providing tariff-free access to 375 million consumers.
  • Leaving the EU would result in potentially 8.7% tariff barriers from the EU.
  • 3 million British jobs rely on exporting to Europe.
  • Ford Motor Company (UK) exports approximately £2bn a year to the EU market.
  • The White House does not support the proposed free-trade agreement.
  • Senator Phil Gramm's proposal would require the UK to leave the EU.
  • Britain's EU membership allows American companies to export to the EU market.
  • Prof. Mirrlees also favors free trade, but believes the UK has more clout to push for global free trade by having a strong voice at the heart of Europe.

Statistics:

  • 3 million British jobs rely on exporting to Europe.
  • 58% of the UK's goods exports go to the EU.
  • 13% of the UK's goods exports go to the US.
  • 375 million consumers have tariff-free access to the UK due to its EU membership.
  • 8.7% tariff barriers could be faced by the UK if it left the EU.
  • Ford Motor Company (UK) exports approximately £2bn to the EU market.
  • 60% of trade between the UK and the US is tariff-free due to existing EU-US agreements.

Sources:

  • Podium (6 July)
  • Office of National Statistics (1999)
  • National Institute