The pitifully small amount the UK Government's new trade deal hopes will benefit Wales
That huge Brexit boost we were promised? It's not looking goodby Will Hayward
New research has shown just how little Wales will benefit from the UK’s hoped-for post-Brexit trade deals.
One of the big advantages of Brexit, according to the pro Leave campaigns, was that the UK would be able to trade on a more global scale. Much attention was given to the great untapped markets around the world we would be able to access once we were out of the EU.
The UK is currently attempting to sign free trade agreements the US, Australia and New Zealand.
However analysis of their plans from Welsh Parliament researcher Rhun Davies, has showed just how miniscule some of the benefits will be for the Welsh economy.
According to the UK Government’s own figures these are the amounts the individual agreements would change Wales’ GVA (gross value added) over the next 15 years:
- New Zealand deal - Wales would see an increase of between 0% to 0.05%
- Australia deal - Wales would see an increase of between 0% to 0.05%
- Japan deal - Wales would see an increase of between 0.05% to 0.15%
- United States deal - Wales would see an increase of 0.05% to 0.15% or 0.25% to 0.40% (depending on the extent of tariff liberalisation and reduction in non-tariff measures agreed)
The UK as a whole will likely see some increase in GDP as a result of the detail (except the New Zealand deal which will be very minimal). This will not be substantial as the likely impacts of the USA deal will be no more than a 0.16% increase in GDP over a 15-year period. Australia will be no more than 0.02%.
This will not be close to covering the potential shortfall of a no-deal Brexit. The value of Welsh exports was £17.2 billion in 2018 with exports to the EU accounting for 61.2% of Welsh exports, compared with 49.9 per cent of UK exports.
This does not mean that there will be nothing at all for Wales in the UK Government’s attempted international trade deals. According to the Senedd research: “The negotiating objective documents also provide some examples of where the UK Government believes there are specific benefits for sectors in Wales from each agreement. For example, a UK-US agreement could benefit Welsh lamb producers, the Welsh automotive, steel and ceramics sectors.
“Additionally, the documents state that Welsh businesses currently exporting medicinal and pharmaceutical products to Australia could see reduced barriers to trade from a UK-Australia agreement.”
On top of the loss trade to the EU as a result of a no deal Brexit, there is also the loss that Wales may see as it will no longer be a net recipient from the EU budget. Research from Cardiff University found that the estimated net benefit from the EU for Wales in 2014 was around £245 million. This was equal to around 0.4% of Welsh GDP. Wales’ net benefit from the EU equated to around £79 per head in 2014. This compares with a net contribution of £151 per head for the UK as a whole.
The Welsh Government have repeatedly called for the UK Government to seek an extension on their current negotiations with the EU to prevent a no deal Brexit after talks were hampered by the Covid crisis.
In an interview with WalesOnline back in May, First Minsiter Mark Drakeford described the UK Government as “lemmings”.
He said: “I remain astonished that every time government ministers are asked they just maintain that we are leaving on December 31, like lemmings running as fast as they can towards a cliff.
“I think it is astonishing that the UK Government will, on top of the economic shock of coronavirus, knowingly impose the shocks that come on leaving the European Union without a fully developed deal.
“The chances of getting the deal that this government said it wanted and said was achievable by the end of December, with everything we are going through, seems so remote to me.”