EU has more to lose than UK if Brexit leads to trade curbs, says study

A pedestrian shelters from the rain beneath a Union flag themed umbrella near the Big Ben clock face in the UK.
A pedestrian shelters from the rain beneath a Union flag themed umbrella near the Big Ben clock face in the UK.PHOTO: AFP

LONDON (BLOOMBERG) - The European Union would be hit harder than the UK if Britain faced trade barriers following its decision to leave the bloc, according to a study published on Friday (Sept 23).

About 5.8 million jobs are linked to trade with Britain, while only 3.6 million British posts are dependent on exports to the EU, policy analyst Civitas said in a report. The EU also has a greater proportion of its labor market at stake.

The findings may provide a boost for Prime Minister Theresa May as she prepares for negotiations to take Britain out of the EU. May has said she wants to retain as much free trade as possible and impose curbs on immigration, prompting EU leaders including German Chancellor Angela Merkel to accuse Britain of trying to "cherry pick" its exit terms.

"Based on the potential impact on jobs, each EU country should be aware of the significant economic benefit in terms of jobs stemming from trade with the UK," said Justin Protts, research fellow at Civitas.

"The EU does arguably have to negotiate as a bloc. However, each of the 27 remaining national government should be negotiating in the interests of those that democratically elected them."

Civitas said that 3.2 per cent of all German jobs are linked to exports to the UK, whereas only 2.4 per cent of British jobs are reliant on Germany. Almost one in 10 jobs in Ireland, Malta, Cyprus, and Belgium are connected to trade with the UK.

"It will be the pressure of their citizens on national governments that will force continental politicians to recognize that what is good for Britain and British workers is also good for their own populations," Christopher Mills, business spokesman for the UK Independence Party, which campaigned for Brexit, said in a statement.

"A fair deal that allows freedom to trade without unrestricted freedom of movement is the clear best solution, for us, and for them."