The legal analysis:
After exit, WTO rules would apply which would allow the UK to decide the level of our own tariffs on imports, provided that tariffs on average are no higher than under the EU customs union.
The UK will be able to participate in new trade agreements with non-member countries from the day after exit. The process of negotiating new trade deals can be started during the 2-year notice period leading up to Brexit, with a view to bringing them into force on or soon after the date of exit.
There will be no need for complicated renegotiation of existing free trade agreements as was misleadingly claimed by pro-Remain propaganda.
The UK could apply to re-join EFTA with effect from the day after Brexit. There is no reason why the four current EFTA countries (Iceland, Liechtenstein, Norway Switzerland) would not welcome us back, given that the UK is one of EFTA's largest export markets. EFTA membership would allow us to continue uninterrupted free trade relations with the four EFTA countries, and also to participate in EFTA's promotion of free trade deals with non-member countries around the world.
After Brexit, the UK would be able to negotiate new trade deals unencumbered by these special interests much faster than the EU, and with a higher priority for facilitating access to markets for our own export industries including services.
It is completely untrue that you need to be a member of a large bloc like the EU in order to strike trade deals. The actual record of the EU compared to that (for example) of the EFTA countries demonstrates the direct opposite.
WTO rules provide for non-discrimination in tariffs, and outlaw discriminatory non-tariff measures. The UK would be in a strong position to negotiate a mutually beneficial deal providing for the continued free flow of goods and services in both directions.
'Fortress Europe' rules of the single market positively require us to impose restrictions on trade between ourselves and non-Member states, so driving up costs to our consumers and industry. Therefore the aim should not be to preserve participation in the European single market with its negative features. Instead, the aim should be access to the single market.
Trade with the rest of the world is now more important to us than trade with the EU. This is not some passing phase but a long term and persistent trend that seems likely to continue into the future.
The interests of the UK are dramatically different from those of all other member states of the EU. Our global trade is much more important to us than it is to other EU member states, while our exports to the rest of the EU are much less important to us than any other major EU state.
We import 66% more goods from the EU than they export to us. Any measures which inhibit trade between the UK and the r-EU after exit (such as the imposition of tariffs) would disproportionately affect EU exporters compared with UK exporters. German car workers and French agricultural producers are dependent upon reaching a harmonious and mutually beneficial trade deal with the UK.
Unlike a customs union, members of a free trade area can decide on the level of the standard tariffs which they charge to non-members of the free trade area. The UK could charge lower or nil tariffs on goods where there is no substantial UK industry to protect, to the benefit of our consumers and industry.
All non-EU territories in Europe have free trade agreements with the EU apart from Belorussia.
Since rules on free movement of goods and services are for the benefit of consumers in the state of importation, there is a strong argument for replicating these rules and applying them to goods and services imported from non-EU states as well, something which we are currently prevented by our EU membership from doing.
The UK is currently compliant with a mass of regulations and directives. Continued mutually beneficial cooperation in non-trade matters does not need to be embodied into a trade agreement.
After Brexit the EU will cease to have any competence in respect of the UK’s trade or other external relations, and the UK will automatically assume rights and responsibilities in respect of 100% of its relationship with other members under the WTO Agreements. In addition, trade relations between the UK and the remaining EU (“the r-EU”) will cease to be governed by the EU treaties, and will automatically be governed by the framework of the WTO Agreements - unless of course a replacement trade agreement is negotiated between the UK and the r-EU which comes into force on exit.
One of the key principles of the WTO Agreements is non-discrimination in trade relations. This means that WTO members are not allowed, for example, to charge different tariffs on goods imported from different countries except in clearly defined and limited circumstances. Thus, following Brexit and assuming for the sake of argument that no trade agreement were reached between the UK and the r-EU, the r-EU would apply its standard external tariff rates to imports from the UK but would not be allowed to discriminate by charging higher rates to the UK than to other non-EU countries. Similarly, the UK would apply its standard external tariffs to imports from the r-EU.
The UK would not be obliged to charge tariffs on its imports at the same rates as it is obliged to charge while it is a member of the EU customs union, and would certainly have the legal right to reduce them as it sees fit.
As a global trading nation, the UK has a strong interest in the general reduction of tariff levels around the world and would certainly not wish to act in way which would be against the spirit if not the letter of the WTO Agreements. The UK would certainly wish to apply a similar principle when it leaves; i.e. to keep its average tariffs the same as or lower than under the EU’s current tariff regime.
The UK would be under no obligation to maintain its tariffs at the same level as it is currently obliged to impose under the EU customs union. In many cases EU tariffs are set at high levels in order to protect industries in other parts of the EU where the UK has little or no domestic industry to protect, such as textiles and clothing, shoes and many kinds of heavily protected agricultural produce. In these cases the UK receives no benefit but pays twice over for the privilege of protecting foreign industries from lower cost competition in the world market: our consumers pay higher prices than they need for the products concerned, and on top of that and to add insult to injury, the UK have to hand over the tariffs collected at our ports to the EU as part of its so-called "own resources".
It would be a clear and unequivocal benefit of leaving the EU to have the right to set tariffs at levels which suit our own circumstances and probably, as a nation with a bias to free trade, reducing them in many cases.
The international counterparties to the existing EU FTAs will almost certainly follow general State practice in State succession cases and accept the rolling over of FTA arrangements so that they continue to apply to the UK after Brexit.
EFTA operated as a free trade area in Europe alongside the EEC and contained, in addition to the UK, Norway, Sweden, Denmark, Switzerland, Austria, and Portugal. In 1973, the UK and Denmark joined the EEC and as a result withdrew from EFTA.
It would be logical for the UK to apply for readmission to EFTA in advance of Brexit, with a view to its membership taking effect immediately upon EU exit. There seems no reason why the four current EFTA states should not welcome such an application. The EU and its Member States are not parties to the EFTA convention and would have no say over such an application for membership. The immediate effect of the UK joining EFTA upon Brexit would be to preserve the existing free trade relations between the UK and the EFTA states, avoiding the risk of, say, Swiss exports into the UK being subjected to tariffs (and vice versa). Notably, in 2013, the UK was Switzerland’s fifth most important export market in the world (Swiss official website), while the UK was Norway’s single most important trading partner receiving 25% of Norway’s total exports in that year (Norway official website). All four EFTA states have standards of living comparable to or even higher than the UK so do not present any mass migration risk.
By rejoining EFTA, the UK would be able to seek the extension of existing EFTA FTAs to itself, and also to give a large positive impetus in collaboration with its EFTA partners to forging new agreements and extending existing free trade agreements particularly in the area of trade in services.
Although claims have been made to the contrary, it is clear that the UK is legally entitled to negotiate and conclude, during the period before exit, trade agreements which will come into force from and after the date of exit: