The director-general of the World Trade Organization (WTO) has dismissed claims that Britain would be able to carry on trading tariff-free with Europe as normal in the event of a no-deal Brexit.
In a recent interview with the BBC, frontrunner for British prime minister Boris Johnson said an obscure trading law called Gatt 24 would mean businesses could continue buying and selling in Europe as normal if Britain crashes out of the EU without a deal on October 31st 2019.
However, WTO leader Roberto Azevedo told Prospect magazine the politician is mistaken and that Gatt 24 cannot be invoked unless the parties involved have already reached an agreement on a future trade deal.
He explained that the law would only apply in the short period between a deal being agreed and its implementation - meaning that in a no-deal Brexit: "Article 24 would not apply, and the standard WTO terms would. You could expect to see the application of tariffs between the UK and EU where currently there are none."
Under standard WTO terms, tariffs of anything up to ten per cent on cars and 35 per cent on dairy products can be applied, meaning thousands of items currently being traded between the EU and UK could have extra levies imposed upon them.
This would add significant costs for both businesses and consumers without the protection of a free trade agreement keeping prices in check.
Meanwhile, former WTO director-general Pascal Lamy likened a no-deal Brexit to the UK dropping two leagues in a sporting competition in terms of its effect on trade.
The WTO currently has 164 members and aims to establish a 'base level' trading framework across the world. However, in comparison with the benefits offered to Britain by the single market, its terms are likely to look especially unfavourable to companies trading with their partners in other countries.