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Britain must ‘face the possibility’ of no Brexit trade deal

23rd Jul 20 4:40 pm

With less than six months to go until the end of the Brexit transition, the UK’s chief negotiator David Frost has warned that Britain must “continue preparing for all scenarios.”

The EU’s chief negotiator Michel Barnier said a Brexit trade deal agreement is “unlikely,” whilst Frost said the UK will not agree to a level playing field on fisheries.

Frost said, “We have always been clear that our principles in these areas are not simple negotiating positions but expressions of the reality that we will be a fully independent country at the end of the transition period.

“That is why we continue to look for a deal with, at its core, a free trade agreement similar to the one the EU already has with Canada – that is, an agreement based on existing precedents.

“We remain unclear why this is so difficult for the EU, but we will continue to negotiate with this in mind.”

However, Frost is still hopeful a deal could be reached by September, “despite all the difficulties.”

“We will keep working hard to bridge the gaps and find a way through,” Frost added.

Barnier told a news conference in London, “The UK is effectively seeking for near-total exclusion of fishing vessels from the UK’s water.

“That is simply unacceptable.”

The UK has been accused of not showing any “willingness to break the deadlock” and claimed the British government have “not shown the same level of engagement and readiness to find solutions respecting the EU fundamental principles and interests.”

Barnier added, the “time for answers is quickly running out,” and “if we do not reach an agreement on our future partnership there will be more friction.”

From next year it is most likely the UK will trade with the EU on World Trade Organisation (WTO) terms, if no trade deal is agreed.

The UK and EU have until October at “the latest” to reach a deal or risk facing quotas and tariffs.

Barnier added, “If we want to avoid this additional friction we must come to an agreement in October at the latest so that our new treaty can enter into force on 1 January next year.

“This means that we only a few weeks left and that we should not waste it.”

Andrew Duncan, Partner and UK CEO, Infosys Consulting, “Despite Boris Johnson driving hard for a Brexit deal to be sealed by the end of the month, there is ever-present uncertainty around the EU trade relationship.

“The economically disruptive ‘cliff-edge’ outcome of a no-deal Brexit still remains possible, and sterling would almost certainly depreciate sharply again. Such an outcome will significantly extend the post-crisis recovery in GDP growth that we were hoping for in 2021 and beyond.

“Advancements in digitisation, automation, artificial intelligence and advanced analytics that have accelerated as a result of COVID-19 will undoubtedly play a big role in driving growth in the case of a no-deal Brexit. For example, friction at the border could lead to longer delivery times and critical production holdups. AI and predictive analytics can help predict customer buying patterns, so organisations can keep up the drive for personalised products without sacrificing real-time supply and mass customisation.

“Additionally, changes to immigration laws post-Brexit are likely to restrict freedom of movement between EU countries and the UK, and the C-Suite now face pressing choices on skills and labour. It’s likely that organisations will increase the pace of automation to bridge this potential shortage and deliver productivity gains.

“Consequently, over the coming months, C-suite and top management must review their technology strategy and ensure budgets and resources are in place to drive the necessary changes that are needed to run smoothly if we leave the EU without a deal.”

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