Nearly all the possible trading relationships between the UK and the EU following Brexit would be less favourable than remaining in the European Union, according to US think tank The Rand Corporation.
Rand said the worst option would be a ‘no deal’, as it would leave the UK economy 4.9% worse off by 2029.
A ‘no deal’ scenario would also have a negative effect on the EU economy, but it would be ‘relatively minor’, the report said. Even a ‘soft Brexit’ involving staying in the free market would not be as positive economically as staying in the EU.
The Rand Corporation receives half its funding from the US government, playing a significant role in America. In Europe, they have advised the UK government, as well as the European Parliament and the European Commission, on policy issues such as mental health.
Its report argues that Brexit was likely to have a ‘mostly negative effect’ on American interests in Europe, given the UK is a firm ally of the US in security matters and a supporter of free markets.
‘An EU without the UK may be more willing to create barriers for non-EU companies, to the detriment of US companies and the American economy,’ the report says.
‘In the development of EU defence policy, for example, the UK aim was often to ensure that EU measures did not undermine NATO and the strong transatlantic partnership.’
That approach could change once Britain has left the EU.
