Not necessarily. Despite Downing Street promised the United Kingdom would not seek to impose any protectionist measures in the post-Brexit era, but it might be out of its hand. The British government has been putting every ounce of effort to finalize new bilateral trade deals with its international partners in order to avoid hitting a wall after January 2021. However, there are little-to-no signs showing the United Kingdom can actually enter this new era in a stronger position.
Any protectionist measures would trim consumers’ choice, because some products or services would be unenviable due to imposed quotas on imported items. Moreover, paying more in exchange of a poorer quality, and charging the increased production cost on the costumers charging would cause inflation to increase. Overall, protectionism reduces the purchase power of consumers. Additionally, infant industries might be chronicle affected by these protectionist measures. These industries would not make any efficient or intelligent long term-investments, because of the favorable protectionist environment in place. If it were to last, this situation could hinder its vital maturation process, and consequently damages its success on the short and long-term.
A trade war between the UK and other nations would be the worst-case scenario. If Britain has to enforce protectionist measures for a longer time than expected, it would attract the wrath of other governments and companies that cannot sell anymore their goods in markets where they normally could. The warring nations would impose countervailing tariffs, quotas, and encourage subsidies to deal with the UK. Such war would cost billions of dollars in losses, costing dearly for everyone involved since their real GDP would take a catastrophic setback.
It is clear why the UK should try to come up swiftly with other alternatives to a post-Brexit Britain applying a protectionist agenda.
The « BREXIT in a nutshell » posts are abstracts of a university paper written by my brother.
At first, I asked for the paper to get some facts straight. However, while reading, I realized that it was clear, simple, understandable, straight to the point, and I couldn’t do a better job addressing the topic. Therefore, with my brother’s consent, I tweaked the passages & published it.