It could take Britain decades to disentangle its trading relations with the EU and negotiate new ties with the rest of the world after Brexit, the head of the World Trade Organisation has warned.
Leave campaigners are making a high-risk bet in staking the economy on their ability to conclude new tariff deals quickly and smoothly, Roberto Azevêdo, director-general of the WTO, said.
Suggestions that Britain could fall back on rules that guarantee basic free trade among the organisation’s 162 members to short-cut lengthy negotiations were unfeasible, he said.
This “extreme” solution put forward by some Brexit campaigners would require Britain to scrap all import tariffs, he said. “I think it’s very unlikely that politically this would be feasible.”
On a visit to London today he is expected to warn that both Britain and the EU would be likely to be required to renegotiate existing WTO deals.
Giving an example of the complexity of the issues, he said that Brexit could require Brussels to allocate to Britain a portion of agricultural subsidies currently granted to the EU as a whole. That in turn could mean countries such as New Zealand and Brazil becoming involved with the talks as they sought to protect their farmers. “It could be a few years, it could be decades. But our experience suggests that to expect smooth sailing and quick results would be a high-risk bet,” he said.
Mr Azevêdo told The Times: “It seems that there is a great deal of confusion about the trade implications of a British exit from the EU. I think it’s important to provide the facts. The likelihood is that a British exit would lead to a sequence of complex negotiations — with the EU itself, with the 58 countries that have trade agreements with the EU, and also with all the other members of the WTO. These negotiations would be complex and drawn out.”
The pound hit a three-week low against the dollar amid City jitters caused by an apparent swing in opinion polls to Leave.
Boris Johnson waved aside fears of a Brexit-induced currency slide and challenged what he said was the key claim from the Remain camp that the economic advantages of being in the EU justified a “sacrifice” of control.
“We will prosper and thrive as never before,” the former London mayor said. “The pound will go where it will, over the short term. But believe me, in the long term you can look forward to fantastic success for this country.”
It was a “delusion” to think that Britain could boost its prosperity by “bartering away our freedom and democracy”. He claimed that Brussels was waiting until the referendum was out of the way to seek an increase in budget contributions plus extra cash to fill a £20 billion black hole of unpaid bills.
David Cameron compared the consequences of Brexit to putting a bomb under the economy. “And the worst thing is we’d have lit the fuse ourselves.”
Nigel Farage, the Ukip leader, dismissed Mr Cameron’s bomb comment as hysterical but added that John Longworth, the former head of the British Chambers of Commerce and a prominent Brexit campaigner, also reached for explosive imagery.
Standing alongside Mr Johnson and Michael Gove, Mr Longworth said that the eurozone might explode “and believe me we don’t want to be in the same room when that bomb goes off”.
Mr Cameron had joined senior figures from other parties to launch a dossier detailing 23 alternative trade models they claimed had been espoused by Leave campaigners. They said that each would have “a profound and damaging effect on our economy”.
Mr Cameron said he was proud to stand alongside Labour’s Harriet Harman, the Lib Dem leader Tim Farron and the Green leader Natalie Bennett at The Oval in south London in “an unprecedented show of cross-party unity”.
Ms Harman accused the Leave camp of speaking in code about wanting to abolish EU regulations, which she said would mean cuts to parental leave and protections for part-time and temporary staff. Mr Farron accused Leave of running a campaign based on lies.
Sajid Javid, the business secretary, and Lord Mandelson, the former EU trade commissioner, warned that British companies could face a £34.4 billion “export tax” on trade with the EU if the country voted to Leave.
They challenged Brexit campaigners to set out their plans for the UK’s trading relationship, saying that leaving the single market without an alternative would be an act of economic sabotage.