According to the former boss of the Brexit department, Britain’s ability to trade will be faced with a “dead weight” because of the narrow EU deal sought by Boris Johnson.
There are concerns that Britain is not at all prepared to deal with such a situation after the official departure of the UK from the EU.
After European Union negotiators on Brexit were asked by Downing Street not to bother making a planned trip to London for further talks without an offer of a “fundamental change of approach”, there was a stalemate in the negotiations with the EU during
However the British prime minister did not completely call off the talks and they are slated to continue through this week. An extraordinary joint plea to both sides to carve out a deal was issued by more than 70 trade associations and professional bodies on Monday in a signal of how severe the unease about the deal is among businesses.
However, the actual impact of a “thin” EU deal on trade and business has been masked by the dire threat of a no-deal Brexit, and this is a growing concern among the government and industry. It will result in serious costs on manufacturers and practical difficulties for hauliers because of the imposition of significant “non-tariff barriers” on trade while a Brexit trade deal could have removed tariffs on trade. It is also expected that new barriers to trade would also be imposed on the UK’s large services sector.
Negotiators were essentially hammering out “the extent of new barriers to trade”, said Philip Rycroft, who ran the Brexit department until last year.
“No deal is certainly worse than a deal, but it is just worth remembering – customs declarations, security declarations, regulatory checks, rules of origin, compliance – all of the panoply of a border applies if we get the deal,” he said. “The change that happens at the end of this year, either way, is a massive logistical challenge and a very expensive one.
“You have the short-term impact, but then you have a dead weight on trade for ever, because that’s the nature of being out of the [EU’s] single market. It puts friction into our trading relationship with the EU – that friction equals cost. It will change the nature of the trade relationship between the UK and the EU. If you believe in free trade, that’s clearly not a good thing.”
Concerns over readiness for the changes due in January were expressed by the Cabinet Office and industry figures during a meeting between them that was held last week. The readiness of a new border computer system, as well as the impact on sectors such as financial, legal and business services, is another cause of concern for industries and businesses in the UK.
Even the best deal that is now on offer between the EU and the UK was “a long way from the kind of deal that was being discussed as a starting point during Theresa May’s discussions – which itself was a very long way away from the status quo”, said Ben Fletcher, executive director of policy at Make UK.
“Across the big business sectors there is a real nervousness that too many firms think that the potential deal is actually largely the status quo – there is a dangerous underlying belief that ultimately, someone will emerge from a building in Brussels with a deal and things will carry on as normal. There are real fears that the hidden shock here is that the scale of change, from where we sit today to where we might sit even with a deal on 1 January, is pretty significant – and pretty scary.”
(Adapted from TheGuardian.com)