Only one of the eight presented options would see the UK economy better off than it is now: a trilateral UK-EU-US free trade agreement, which does not seem very likely.
Leaving the EU with no deal, which would mean reverting to basic World Trade Organisation (WTO) rules, would cause the greatest economic loss for the UK, the study said. The result would be a loss in GDP of nearly 5%, or $140 billion, in the ten years after Brexit, compared with the UK’s economic performance inside the EU.
Researchers at RAND have measured likely monetary changes in GDP growth, GDP per capita, trade and foreign direct investment for the UK, EU and US across the eight trade scenarios.
The scenarios include five ‘hard Brexit’ options: WTO rules, a free-trade UK-EU deal, a free trade UK-US-EU deal, a UK-US deal, and an extended transition period during which EU and UK tariffs do not change, but other non-tariff barriers emerge.