As Boris’ dinner with Ursula von der Leyen, the European Commission President, fails to end Brexit trade deadlock, the deadline for the end of the transition period is looming, and it’s looking likely that any deal needs to be struck by Sunday, or the UK is leaving the EU without one.
Despite the Prime Minister sending his Brexit negotiator, Lord Frost, to Brussels on Sunday for 48 hours of “intensive” discussions with Michel Barnier and concessions from both sides, sticking points remained, which Johnson and von der Leyen failed to overcome last night.
Failure to agree on new trading arrangements by Sunday will mean the UK leaving without a deal and trading on WTO terms, which would introduce tariffs and quotas.
Medicines are not subject to tariffs under WTO rules, but agricultural and manufactured goods such as cars would become more expensive. The price of cars could increase by 10% while some foodstuffs such as cheese and beef could see a 50% price hike.
‘Yellowhammer’, the leaked Whitehall document outlining the possible worst-case no deal scenarios, predicts a three-month “meltdown” at UK ports and significant tariffs on manufactured and agriculture exports after the UK leaves the EU.
There is some hope that the European Commission may implement contingency plans to smooth out significant disruption albeit on a temporary, unilateral basis. But even this is unlikely, unless it is in the EU’s interest.
For example, the last time no-deal appeared to be a possibility the commission made plans for bare bones transport connectivity, which gave UK aircraft temporary but limited permission to land in EU airports.
Government ministers are trying to reassure the public that “extensive plans” are in place to guarantee vaccines will still come in from Europe, even in the result of a no-deal Brexit.
The Office for Budget Responsibility (OBR) warned that no-deal would leave the UK worse off to the tune of 1.75% in terms of real GDP next year and that unemployment could reach 8%, while the Bank of England fears that a no-deal Brexit would do more long-term economic damage to the UK than the coronavirus pandemic.
No deal is not sustainable for the long term and eventually the two sides will need to return to the negotiating table.
Metro’s post Brexit task team are working tirelessly to ensure we minimise disruptions.
Please contact Jade Barrow or Andrew White for further information.