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Project Fear was wrong but Brexit’s rewards are also yet to materialise - by Roger Bootle

It will take a strong economic recovery combined with tough control of spending to head off higher taxes says Roger Bootle (Chairman of Capital Economics) in this article for the Telegraph dated 11.07.21:

It is now just over five years since we voted to leave the EU and it is nearly six months since we actually did leave fully. Accordingly, this seems a good time to reflect on the economic advantages and disadvantages that we’ve noticed so far.

I have been struck by how many erstwhile Remainers think that Brexit has already proved to be a complete economic disaster. This is news to me. Admittedly, many small companies have found the administrative burden of exporting into the EU too onerous and some are giving up on the EU market altogether. In time they may direct their attention to other markets but even so it is likely that their involvement in overseas trade will be somewhat lower than when we were members of the EU. This will be a loss. But on the whole this is not the picture for large companies and their trade volumes have held up well.

On balance, the worst fears of Remainers about our trading relationships have not been realised. We have achieved a trade deal with the EU with zero tariffs and quotas. Admittedly, this deal is less than perfect, not least because it does not include financial services. But with regard to the City of London, again the worst fears of the pessimists have not been realised and it is clear that they are not going to be. Some jobs have been lost to Frankfurt et al, but the numbers are comparatively low and could easily be offset as the City branches out in new directions.

We have managed to roll over nearly all of the EU’s existing Free Trade Agreements (FTAs) with other countries. The pessimists had argued that we would find this extremely difficult – they were wrong.

As far as new FTAs are concerned, we’ve managed to secure them with only Australia, Japan, Iceland, Norway and Liechtenstein. The really big prize, namely a deal with the US, still looks far from imminent. Even so, this may not matter much since there is a good chance that we will be admitted to the Trans-Pacific Partnership, which is a large grouping of countries that will soon probably include the US.

For the full article in pdf, please click on this link:

Project Fear was wrong but Brexit’s rewards are also yet to materialise - article for the
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