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Chris Grey @chrisgreybrexit
, 9 tweets, 2 min read Read on Twitter
As with all such forecasts, the assumptions and caveats matter. This one is admirably clear about them and I’ve picked out some of the most obviously important ones in this thread. 1/9
“Our study does not consider the one-time costs faced by government and business of adjusting to Brexit, nor does the model capture the sector-specific impact on deeply integrated UK-EU supply chains, such as on the automotive sector, which is likely to be negative.” [= big]. 2/9
“... the EU would treat the UK no worse than any other important trade partner with which it does not have a trade agreement in place. Our assumption is that the UK would be treated like the USA …” [US-EU have no FTA but 130+ 'micro-agreements' that wd need renegotiating]. 3/9
“It is our view that the strategic impact of a failure to reach a negotiated exit of the UK from the EU, could be profound. However, this was outside the scope of this report.” [Fair enough but, indeed, profound, not least on ability to reach deals with other countries]. 4/9
“The EU’s current FTAs stay in place. Both the UK and the REU honour outstanding liberalisation commitments vis-à-vis third parties under existing treaties and we assume that third parties do the same.” [Highly speculative and implausible given relative UK-EU market size]. 5/9
“We do not factor in the one-time costs of erecting a possible customs border control between Ireland and Northern Ireland.” [OK, but (ongoing) human, economic & political costs matter even more]. 6/9
“We do not account for sector-specific issues related to the Single Market such as the Passport issue for financial services and air transport issues.” [Which are likely to be huge given UK dependence on City and fact of being and island]. 7/9
“We do not incorporate a Brexit effect for movement of persons.” [Which is likely to be huge for an ageing society at de facto full employment]. 8/9
Overall, my reading of this report is that a no deal Brexit would not be too bad so long as we make assumptions which ignore most of its bad effects. 9/9
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