Brexit Trade Costs Will Be ‘Material’ Deal or No Deal: Deutsche Bank



Olga Cotaga | Reuters

LONDON (Reuters) – Deutsche Bank analysts estimate that the costs to trade between Britain and the European Union will be high even if the two sides manage to strike a deal by the end of the year because of the impact of non-tariff barriers.

“Tariffs make up only a small part of the direct trade cost from leaving the EU,” the analysts wrote in a note.

“Of more significance is the prevalence of non-tariff barriers. These will weigh on trade regardless of whether the UK and EU trade on preferential terms or not,” they said.

Deutsche Bank expects Britain to agree on a Canada-style trade deal with the bloc in the coming weeks, which is referred to as a Free Trade Agreement (FTA).

Such a deal would knock 0.6% off Britain’s gross domestic product (GDP) with a cost of 0.2% to the EU’s GDP, the analysts said.

To read the full article, click here.