Thread by @UKandEU

Our next panel on trade and the economy is starting now...with @MeredithCrowle1, @dgbailey, @jdportes, @hayward_katy and @JohnGPeet

#NegotiatingBrexit2020

. @MeredithCrowle1: no UK-EU trade agreement implies an 8% loss of GDP per head, whereas some kind of deal implies 4.5% loss

#NegotiatingBrexit2020

. @MeredithCrowle1: the UK would broadly choose high standards indepedently, so the political question is whether they'll commit to doing something they'd do anyway in a trade deal

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. @MeredithCrowle1: the big level playing field issues are state aid and taxation. The EU-Canada agreement manages these issues on WTO terms, which are very limited commitments.

#NegotiatingBrexit2020

. @MeredithCrowle1: the level playing field issues go beyond the UK-EU relationship and cannot be solved by it. There needs to be wider agreement on tax issues with other partners.

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. @dgbailey: we've seen a perfect storm in the automotive industry with slowing Chinese sales, declining diesel sales and Brexit uncertainty.

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. @dgbailey: no trade deal with the EU is forecast to reduce UK car production by around 10%. This implies significant job losses in many of the seats the Conservatives have just won.

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. @dgbailey: many manufacturing sectors want to see regulatory alignment to reduce checks necessary on trade between the UK and the EU

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. @dgbailey: even a bare bones trade agreement will be difficult for UK manufacturers, which are closely integrated with EU supply chains

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. @jdportes: Brexit has so far cost the UK about 2% of GDP, about 1.5% of this is down to a fall in business investment and 0.5% is due to reduced migration

#NegotiatingBrexit2020

. @jdportes: no trade deal with the EU is not the same as no deal. The short term disruption from such a scenario is not likely to be of significant macroeconomic importance.

#NegotiatingBrexit2020

. @jdportes: the spectrum of medium to long term potential outcomes has narrowed to either WTO terms or a minimal free trade agreement with the EU.

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. @jdportes: it is estimated that the long run economic impact of moving to trading with the EU on the basis of a free trade agreement is about 4% of GDP

#NegotiatingBrexit2020

. @jdportes: the implication of a free trade agreement is a hit of about 0.5 percentage points of GDP per year, but that doesn't mean the government's programme becomes unaffordable.

More likely is long term relative decline akin to Italy.

#NegotiatingBrexit2020

. @jdportes: there is reason for optimism on immigration compared to 2-3 years ago. The new system is as liberal as one could reasonably expect outside free movement.

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. @jdportes: the big risk is in implementing the new immigration system in just six months, which could become a car crash

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. @hayward_katy: the difficulties around the Irish border arise because it is a microcosm of what integration means, both within the UK and between the UK and the EU

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. @hayward_katy: the concerns in Northern Ireland now are about its place in the UK market - there could be an existential threat to intra-UK trade between GB and NI.

The government is not interested in frictionless trade, and this means for GB-NI trade.

#NegotiatingBrexit2020

. @hayward_katy: the UK failing to implement the protocol has severe potential economic consequences for NI businesses.

Far from the best of both worlds, NI falls between a rock and a hard place.

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. @hayward_katy: NI is seen by both the UK government and the EU as a risk rather than a responsibility.

Economic problems in NI never remain only economic, and border issues are always politicised.

#NegotiatingBrexit2020