Brexit can be seen as either prosperous or a mess that depends on the impact on the economy. Most of the public debates are about whether the UK should focus on extending the custom unions market or should go for a single market of their own. However, several trade possibilities and groupings can happen between the UK, European Union and other nations.
All the arrangements will abundantly depend on the negotiation deal between the UK and the EU. It will involve various issues between both sides and can be particularly challenging for the UK, as it can cause adverse effects with the EU in future associations. Both nations have announced their plan to have a healthy relationship after this agreement but if the discussions keep ongoing, it can commence to the two bodies being unable to reach a definitive settlement.
It is possible to present several legislative and financial challenges for both parties.
As most of the ventures funding is between US, UK and European countries, it can lead to contrary trade scenarios between these nations after Brexit. A study explored the adverse effect of Brexit on the relations between the US and the UK, by effecting their administrative and political sector.
If the UK is not able to come to an agreement with the EU in the financial sector, it can lead to an adverse effect on both of the nations. These disputes will be beneficial for the US.
If the UK decides to exit without any deal or by solely following the WTO rules. It would lead to great commercial losses for them. Some research shows that negotiating under the WTO commands will decrease the UK GDP by around 6 percent for the next ten years after Brexit, or a $150billion loss. The WTO outcome will result in a fall for the UK in comparison to the EU and will result in notable losses and raises non-tariff trades that will wreck the abilities of UK companies to trade services to European countries as all of the sectors dominate the UK economy by contributing around 80 per cent of the GDP. Under the WTO rules and regulations, the EU will incur tremendous losses in the coming years. The financial loss to the EU could be around 0.6 per cent of its overall GDP of ten ages after Brexit.
Whereas the other seven several trade scenarios will be in support of the UK than the rules set by WTO, but most would lead to some losses as compared to it’s the current position as an EU member.
Among all the scenarios possible, the one that would benefit the UK would be an agreement between UK-EU and US. The UK would be working on a 7 per cent GDP growth rate that is far better than the WTO regulations and the current EU membership. It is because of the entrance gained by the UK to the US and EU markets and benefits from their economic growth proposed in the deal. However, an adjustment like this is very unpropitious in the current legislative conditions.