Roger Bootle, chairman of independent macroeconomic research consultancy Capital Economics, has said Britain and the EU should sign a temporary agreement committing not to impose tariffs on each other’s imports and exports while a new free trade agreement is negotiated.
Mr Bootle argues the deal would be permissible under World Trade Organisation and has questioned why the government has not yet suggested this proposal to Brussels.
The 66-year-old eurosceptic economist explained delaying Brexit must be avoided at all costs because it would only exacerbate the uncertainty gripping businesses across the country.
The Brexiter has said his proposition, which has been backed by Conservative MEP David Campbell Bannerman and entrepreneur Michael Burrage, would be a vital step to averting any prolongation of Brexit.
Writing in his Daily Telegraph column, Mr Bootle said the new deal could “reduce the uncertainty and banish many of the fears of Remainers about the costs of Brexit.”
He added Mr Bannerman and Mr Burrage “point out that it is possible, if both the UK and EU agree, for us to carry on trading with each other without imposing tariffs while an FTA is negotiated.”
Mr Bootle said Article 24 of the World Trade Organisation’s general agreement on tariffs and trade would permit the agreement.
He said: “According to the legal expert Martin Howe QC, we can even achieve this result by operating a provisional or temporary FTA involving zero tariffs.
“If we did this, the anxiety about tariffs being imposed on our trade with the EU would go out the window.
“Equally, the absence of tariff barriers would reduce delays and frictions at borders.”
Mr Bootle queried why Theresa May did not pursue this option at the beginning of negotiations and why, more than two-and-a-half years after the referendum, she still has not put the idea to the EU.
He said: “Is there some legal barrier that would prevent us from doing so?
“If not, did the Government eschew this route because it thought that Mrs May’s ‘deep and special partnership’ with the EU would be preferable – and that it would be achievable?
“Or was the Government worried that a temporary FTA with the EU would prevent us from signing FTAs with the rest of the world?
“Or is this apparent rejection of the temporary FTA option simply another manifestation of the establishment’s wish to sabotage Brexit altogether?”
Mr Bootle suggested the government may have concluded that Brussels would never agree to such a deal but added this would be astonishing given how much the continent’s corporations would want to trade tariff-free with the UK.
He said: “European businesses would have strongly supported a zero-tariff temporary arrangement and surely they would have put intense pressure on their governments, and hence on the European Commission.
“Moreover, if the EU really wouldn’t have agreed to it then and still wouldn’t agree to it now, I can think of no clearer demonstration of warped EU politics trumping economic self-interest.”