Even the most fervent Brexiteer would have to admit to being impressed at the cohesion and chutzpah of the European Union negotiating team. Michel Barnier talks as if it is the UK that most needs a deal, while the rest of the EU could carry on just as well as before, or better, without one, given that it would be able to attract business and investment away from us. For the EU to concede a trade deal, therefore, would seem to be little more than an act of kindness towards a fallen friend.
As a diplomatic bluff, it is strikingly successful. But the economic reality is rather different. A free-trade deal benefits all. But if there were to be no deal, then what would happen? A report by the Halle Institute for Economic Research and the Martin Luther University of Halle–Wittenberg this week sought to explain. Its basic case is that EU exports to Britain would drop by 25 per cent, as the UK reaches further out to global suppliers.
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