EU trade power

The main effect of the EU exercising its trade power will be to cause scarcities and higher costs within the EU. Goods and services currently procured from the UK will have to be replaced with supplies from elsewhere. In Ireland, this will result in higher transport costs, and even if the UK government were sensible enough to allow tariff free entry of goods from the EU, this would still result in a reduction of the volume of goods imported, due to the changes in EU-Sterling flows.

The EU negotiators seem to imagine that they are doing the British a favour by allowing people in the EU to purchase UK products. Their view of trade and economics resurrects the mercantilism which dominated in the seventeenth century but had been rebutted by the eighteenth, though not before mercantilist policies had led to the ruin of Spain, Portugal and France; the persistence of mercantilism was an important contributory factor to later nineteenth century colonialism and the First World War.

UK businesses will have to find new customers, within the UK or abroad. Since the UK will be importing more from the rest of the world, without the restrictions imposed by EU membership, the demand for UK products will arise naturally as a consequence of increased sterling balances held in the rest of the world.