Leaving the EU without a trade deal could cost British exporters more than £6bn a year in tariffs, new analysis shows.
If Brexit negotiations fail to result in an agreement within the two year timeframe, the UK will have to rely on World Trade Organisation (WTO) rules – a possibility acknowledged by Theresa May’s insistence that “no deal is better than a bad deal”.
Guardian analysis of the latest World Bank and UN international trade figures shows that Britain currently sends $204bn worth of exports to the EU every year, which, in the event of no deal, would be subject to £6.1bn in WTO set tariffs.
Sectors such as the car industry and agriculture, which rely on the single market, would be hit the hardest, the analysis shows, with tariffs increasing costs by 10 percent on cars, 15 percent on lorries, 23 percent on ham and 109 percent on sugar beet.
Nissan chief executive, Carlos Ghosn, said last week that future investment in the UK by the company is dependent on access to Europe, despite receiving assurances from the government that Nissan will remain competitive if it stays in the UK.
He told French magazine Le Point: “What we have made is European investment, not British, based in Britain … If walls are erected between the EU and Britain, investments will be reduced.”
The analysis, which examines the impact of WTO rules across 4,500 trade lines, shows unexpected industries could also be hit. The UK fashion industry could face bills of more than £1bn, while the ceramics industry would also suffer extra costs.
In addition, UK consumers could face higher prices and increased inflation due to WTO tariffs on imports from Europe.