The political asymmetry of the Brexit talks

You will doubtless have heard this argument many times: Britain will have to budge on the terms for a free trade deal with the EU eventually because there is a powerful asymmetry at work.

The case runs thus: Though it is perfectly true that the EU runs a big trade surplus with the UK, it is also true that more than 40 per cent of our exports go to the EU, while the UK market constitutes a much smaller share of the overall exports of any individual member state.

Therefore, in any trade Armageddon in which all exporting and importing between the UK and the EU ceased, we would have lost nearly half of our export markets (worth about 14 per cent of GDP), while they would have lost a smaller proportion of theirs (worth perhaps a couple of points off EU GDP).

And while there won’t be a total collapse of trade under any circumstances, the broad ratio of lost sales is still likely to apply, meaning that proportionately the hit to the UK economy will be much greater than to countries in the EU.