Monday 16 October 2017

Brexit and Trump: two upsets with a big price tag

If Britain leaves the EU's customs union, the trading complications that follow could cost us dearly

STRATEGY: German Chancellor Angela Merkel greets British PM Theresa May in Berlin last Friday. Photo: Sean Gallup/Getty Images
STRATEGY: German Chancellor Angela Merkel greets British PM Theresa May in Berlin last Friday. Photo: Sean Gallup/Getty Images
Colm McCarthy

Colm McCarthy

Brexit and the election of Donald Trump to the US presidency, the two big political surprises of 2016, are both negative in their economic implications for Ireland. Some additional clues as to just how negative emerged last week.

UK Prime Minister Theresa May and her trade secretary Liam Fox visited India last week, exploring possibilities for increased business. A recurring post-referendum mantra from the Brexiteers is the notion that a brave new world of unexploited opportunities has opened up and Britain can replace lost trade with Europe by taking to the high seas. There is even a slogan, 'Global Britain', to accompany this reassuring prospect.

There are two snags. The first is that Britain does relatively little trade with countries like India, whose main trading partners are in Asia. Trade with Ireland or Belgium is far larger than trade with India.

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