Leaving EU single market 'will harm UK trade'

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A new report has indicated that the UK's international trade prospects would inevitably be harmed if the country leaves the European single market.

The British government has been warned of the potentially significant negative impact on international trade that would result from the UK leaving the European single market.

A new report from the Centre for Economics and Business Research and the campaign group Open Britain has indicated that the UK could be inviting economic damage upon itself by opting for a so-called "hard Brexit" that involves completely severing ties with the single market in order to regain control over immigration laws.

According to the research, every major industry in the UK is linked to the single market and could be harmed by a switch to a system of free trade agreements (FTAs) negotiated on a sector-by-sector basis, as this process would inevitably involve having to prioritize some industries over others.

This was one of a number of potential downsides to pursuing FTAs over continued single market access cited by the report. For example, the uncertainty involved in the negotiation process could hold back investment, while Britain would also most likely have less control over decision-making processes in the case of an FTA than it would as a member of the European Economic Area.

Additionally, it was noted that adopting the World Trade Organization model of trading rules in lieu of single market membership would lead to importers and exporters facing tariffs and possible regulatory divergence problems.

Given that many of the largest and fastest growing UK sectors export mostly to the EU, the Open Britain campaign - which is backed by senior politicians from the three major UK political parties - has urged the government to take heed of the report and offer clarity on its negotiating position.

Labour MP Chuka Umunna said: "Every major sector of our economy is linked to the single market and could be harmed through an arrangement that prioritizes one sector over another. The benefits we have within the single market cannot be replicated outside it without cost, since every alternative inevitably means increased barriers to trade."