A post-Brexit trade deal with the US is estimated as having the potential to grow the UK economy by 0.16%, according to the Government’s negotiating objectives.
The £3.4 billion yearly increase outlined in the document published on Monday was predicted under the best-case scenario where the UK eliminates import tariffs with the States.
But if only “substantial tariff liberalisation” is achieved, then the increase estimated in 15 years was put at 0.07%, or £1.6 billion, in the Governments’ preliminary assessment.
Critics pointed towards estimates of a potentially larger hit to the economy caused by Brexit, and warned the blow will “pale in comparison to the benefits”.
Prime Minister Boris Johnson has committed to obtaining a Canada-style deal with the EU, which previous Treasury analysis suggested could shrink the UK economy by 4.9%.
The best scenario outlined on Monday was where a “deeper trade agreement” with “full tariff liberalisation” and a 50% reduction in non-tariff measures is struck.
Under this, real wages for workers were expected by the Department for International Trade (DIT) to increase by 0.2%, or £1.8 billion.
The scenario predicting a smaller boost to the economy was based on a 25% reduction of non-tariff measures and a “substantial tariff liberalisation”.
Labour’s shadow trade secretary Barry Gardiner said “we stand to lose more than we gain” under the Government’s proposals, which he said are “likely to cost us dearly”.
“The Government used to talk about ‘the sunlit uplands’ of their plans for the future. Well these uplands look pretty rocky and there’s not much sun,” he added.
Liberal Democrat international trade spokeswoman Sarah Olney accused the PM of being “seemingly hellbent on risking UK prosperity”.
“Boris Johnson has repeatedly claimed that negative impacts of Brexit will pale in comparison to the benefits,” she said.
“But today’s analysis is clear: the gains from the best-case trade deal with Donald Trump will not come close to outweighing what we expect to lose from leaving the EU.”
Treasury analysis predicted that a trade deal with the EU similar to Canada’s would damage the UK economy by 4.9% of GDP by 2035, compared with remaining in the bloc.
Leaving without a trade deal in place was estimated in the November 2018 study at having a 7.6% blow.
Labour MP David Lammy, a prominent Remain voice in the party, cited the analysis and said: “In what planet does this boost wages or create jobs for anyone except the Tory Cabinet?”
Meanwhile, the UK spelled out in the 184-page document that the NHS will not be on the table during free trade agreement talks with Washington.
UK negotiators would work to ensure that measures are in place to prevent hikes in medicine prices for the NHS, as the Government said the service “will not be on the table”.
“The NHS is not, and never will be, for sale to the private sector, whether overseas or domestic,” the document said.
The Government acknowledged public concerns about US meat, particularly chlorine-washed chicken and hormone-fed beef.
And the document committed negotiators to “ensure high standards” and protections were maintained for consumers and workers, while “not compromising” on environmental, animal welfare and food standards.
Trade Secretary Liz Truss maintained a tough stance ahead of the negotiations, warning the UK will “strike (a) hard bargain” and is prepared to “walk away if we need to”.
The PM had pledged to “drive a hard bargain to boost British industry” in the talks, which will take place alongside negotiations with the EU.
Talks in Brussels got under way on Monday when the PM’s Europe adviser David Frost met EU chief negotiator Michel Barnier.
Negotiations with Washington were expected to last a number of years and, though no start date had been set, they were anticipated to get under way by the end of the month.