It could take the U.K. "many years" to establish fresh trade deals with fellow members of the World Trade Organization once it has left the European Union, the chief economist of the Geneva-based body said.
While the U.K. is now inside the WTO as one of the EU's 28 nations, leaving the bloc will require it to submit its own schedule of tariffs for the approval of trade partners, all of whom must agree to them. At that point, any of the other WTO members can flag issues, forcing the U.K. into a series of talks that could take years to resolve, said Robert Koopman.
"My sense is they are there to negotiate and are likely to find some things to negotiate," Koopman told a conference in London on Monday. "It could take a long time."
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The economist noted it takes about five or six years to strike trade deals. In the meantime, the U.K. would be exposed to an average WTO levy of 5.3% and more than double that amount for some items, including cars, clothes and spirits.
"Every WTO member is going to be able to look and say, 'It does affect me,'" Koopman said. "Members are looking out for their interests."
The U.K. is planning to use its international aid budget to curry favor among developing countries it hopes will assist them in any trade talks, Bloomberg reported last week. Trade Secretary Liam Fox said last month he would not let slow progress in talks at the WTO hold back his global trade agenda.
Former Deputy Prime Minister Nick Clegg said Monday that the risk of higher tariffs was a reason to stay inside the single market despite the signals from the government it is willing to go it alone.
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