Brexit: UK faces 'Herculean task' in trade talks

Dr Fabian Zuleeg
Image caption Dr Fabian Zuleeg was speaking to Holyrood's economy committee

The UK faces a "Herculean task" to negotiate new trade deals with other countries when it leaves the EU, a Holyrood committee has heard.

Economists said the talks would take decades, would require concessions and would likely leave the UK worse off.

This was because the UK was "not the country most other nations are lining up to trade with".

They also dismissed the idea some parts of the UK could remain in the single market if the rest of the UK leaves.

The UK government has suggested it will pursue a "bespoke deal" for Britain when it enters Brexit negotiations with the rest of the EU next year.

Tariff-free trading

Its political opponents, including the SNP, have warned against a so-called hard Brexit which would see the country lose its single market membership.

Membership of the single market allows tariff-free trading across Europe and preferential trade deals with other countries across the world.

There has been speculation that parts of the UK such as Scotland could stay in the single market and that the financial sector could secure an arrangement which will allow "passporting" - the right to sell services freely across the EU - to continue.

Giving evidence at the economy committee on the economic impact of leaving the EU, Dr Fabian Zuleeg of the European Policy Centre said he believed this was "highly unlikely".

Image caption The committee was taking evidence on the potential economic implications of the UK leaving the EU

He said: "There are some considerations as to whether there can be special deals. The one I think which is highly unlikely is a special deal for any part of the UK to remain in the single market.

"I wouldn't necessarily assume there will be a special deal for financial services in London.

"I think there is relatively little incentive to give competitors good access to the market without any kind of give from the UK."

As the markets "start to anticipate a harder and harder Brexit, the bigger the costs are going to be," Dr Zuleeg said, as the UK would have to pursue its own trade deals with other nations.

'Big ask'

"The question of assuming that there might be free trade agreements with all these places around the world, that might be the case but that's quite a big ask to negotiate," he said.

"It takes a lot time and will require quite a lot of giving up on the UK's side to actually get free trade deals with these places."

Dr Matias Margulis, an economist from the University of Stirling, said: "I just want to echo how much of a Herculean task it is going to be for the British government to not only renegotiate its trade relationship with the EU, but also with all the existing 50 countries the EU has preferential trading agreements with that the UK currently enjoys.

"What we are looking at, at safe estimate, is several decades of just renegotiating the current access the UK currently enjoys.

"The reality is the UK has not negotiated a trade agreement since the late 70s, it has no capacity to negotiate these agreements.

"It is now a much smaller economy, it does not have the leverage of negotiation (it did as part of the EU), so when it does strike new deals they are likely to be not as good as the deals it currently has, and nobody is getting in line to sign trade deal with the UK - it is not that important an economy globally.

"It is not the country most other nations are lining up to trade with, so I think there has to be some realism of where the UK sits in the global picture."