With Britain due to vote next month on whether to leave to European Union, a cross-party group of British lawmakers has warned that negotiations on an exit could take a decade.
The report by the House of Lords’ EU Committee, part of Britain’s parliamentary framework, predicts that leaving the bloc would entail ‘lengthy and difficult negotiations.’
“The analysis suggests that striking a comprehensive trade agreement is going to take anywhere between four and 10 years,” said Stephen Booth of policy analyst group Open Europe.
The "Vote Leave" campaign to quit the European Union has dismissed the findings, and says it would be in Europe’s interest to strike a quick trade deal because Britain is a big market for goods like French wine and German cars.
“We do have an alternative, and it’s a glorious alternative. A relationship with Europe based not on the whims of un-elected bureaucrats, but on cooperation between elected governments,” London Mayor Boris Johnson, a key figure in the "Vote Leave" campaign said last month.
The debate comes days after President Barack Obama said Britain would go to "the back of the line" in negotiating a trade deal with the United States if it chose to leave the European Union.
The "Vote Leave" campaign wants Britain to strike deals with growing economies outside the European Union. They cite the 2014 free-trade agreement between Switzerland, which is not an EU member, and China.
“The Swiss-Chinese deal illustrated that Switzerland had to open up its markets more than China and in a more timely manner. So clearly I think the U.K. wouldn’t necessarily have all the leverage. But it might be able to be a bit more flexible and nimble, or concentrate on issues that it wants to concentrate on. And that’s the trade-off I think the U.K. would face,” said Stephen Booth of Open Europe.
Banking and insurance
Close to 80 percent of Britain’s economy is made up of services like banking and insurance, much of it headquartered in the City of London.
For more than 300 years, Lloyd’s of London has acted as a global marketplace for insurance. Underwriters have witnessed shipwrecks, oil spills and revolutions.
But there are fears a new storm could blow business completely off course, as an exit from the European Union could see Britain lose its so-called "passporting rights", thereby cutting off London’s role as a gateway to the rest of the European Union.
"Having the EU together with Lloyd's in London and the other insurance companies here in London, London playing its role as a financial center for Europe, is I think extremely important,” said John Nelson, Chairman of Lloyd’s.
Germany, Europe’s biggest economy, has warned of the damage a British exit would cause. Thomas Oppermann of the Social Democrats, one of the governing coalition partners, offered a stark assessment of a so-called ‘Brexit’.
"The financial service providers in the City of London must look with horror to the day when such a decision is made,” he said.
Campaigners who want to remain in the European Union say other cities like Frankfurt and Paris are eyeing London’s lucrative role as Europe’s financial hub, and its rivals could play hardball in any negotiations over a British exit.