EU referendum: UK '˜to pay billions in trade tariffs if Brexit'

A fresh warning about the potential economic cost of Brexit has been issued by the head of the World Trade Organisation, who warned import tariffs would cost the country billions.

Nigel Farage travels on his battle bus as he campaigns for votes to leave the European Union. Picture: Christopher Furlong/Getty Images

WTO director general Roberto Azevedo said the UK would have to negotiate membership of the organisation – as it is currently represented by the EU – and trade deals with countries around the world.

The intervention came as the rival camps in the referendum debate clashed over a stark warning about the potential impact of Brexit from the Institute for Fiscal Studies (IFS), with David Cameron hailing it as the “independent gold standard” but Leave campaigners claiming it was influenced by funding from Brussels.

The WTO estimated the cost of additional tariffs on goods imports to British consumers after Brexit would amount to £9 billion, while British merchandise exports would be subject to a further £5.5bn in tariffs.

Mr Azevedo said: “The consumer in the UK will have to pay those duties. The UK is not in a position to decide ‘I’m not charging duties here’. That is impossible. That is illegal.”

Setting out the scale of the challenge facing the UK if it voted to Leave on 23 June, Mr Azevedo said: “Pretty much all of the UK’s trade would somehow have to be negotiated.”

Brexit campaigners have suggested that the UK would pull out of the single market in the event of a Leave win, and Britain could face being cut out of existing trade deals negotiated between the EU and other countries.

Mr Azevedo said: “It is a very important decision for the British people. It is a sovereign decision and they will decide what they want to decide. But it is very important, particularly with regard to trade, which is something very important for the British economy, that people have the facts and that they don’t underestimate the challenges.”

The intervention by the WTO chief follows warnings from other major international economic bodies and the respected IFS think-tank, which forecast that Brexit could lead to two more years of austerity.

The report said a vote to Leave could see public finances take a £20bn to £40bn hit in 2019-20, if gross domestic product is 2.1 per cent to 3.5 per cent lower over the period, as predicted by the National Institute of Economic and Social Research (NIESR).

It also rejected a key claim from the Leave camp that EU membership involves sending £350 million a week to Brussels which could be used in the UK.

Mr Cameron – whose policies have often been savaged by the IFS – said it was “always held out as the independent gold standard”.

“What they are saying about the £350m claim and what they are saying about the effect upon our economy of Brexit, that is very, very powerful and it backs up what the Treasury and others have been saying,” he said as he arrived in Japan for the G7 summit.

Vote Leave dismissed the IFS as a “paid-up propaganda arm of the European Commission” which could suffer a financial hit from Brexit because it benefits from EU funds. Ukip leader Nigel Farage said: “They’ve taken loads of EU money over the last ten years to produce a report in an attempt to frighten us. They’re using our money to tell us what we should think.”

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