The U.K.'s hard-line Brexit backers are making their move. If they get their way on the U.K.'s new trade arrangements, they will face a test of gravity.
Many of those plotting to oust Prime Minister Theresa May also favor reverting to basic World Trade Organization rules — thereby creating new barriers with Europe — arguing that it would supercharge economic activity with other, faster-growing countries further afield. That is at odds with the theory of trade gravity, which states that the level of commerce between two countries is in proportion to their size and proximity.
The idea is that a twofold increase in the distance between countries leads to a corresponding decline in trade volume by half. According to research by the London School of Economics, it helps explain why the U.K. has far greater trade with Germany than Canada — a nation with which it shares more historical and cultural links.
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