Head-to -Head

Would a no-deal Brexit be good for Bri­tain?

Business Spotlight - - CONTENTS -

Ev­ery busi­ness per­son knows that no deal is bet­ter than a bad deal. Re­gret­tably, we face be­ing trapped in a re­ally bad deal with the EU that hand­cuffs us to the sin­gle mar­ket and cus­toms union, with sim­i­lar rules on free­dom of move­ment. Noth­ing will have changed. There’s ac­tu­ally no such thing as “no deal” — the re­al­ity is that we would move to the World Trade Or­ga­ni­za­tion (WTO) rules, which is how we trade with most other na­tions out­side the EU. There is a third sce­nario, which is that we could of­fer a Cana­dian-style free-trade agree­ment to the EU as long as they agree it by Christ­mas 2018.

A no-deal Brexit would save Bri­tain the £39 bil­lion (€43 bil­lion) that the prime min­is­ter has agreed to pay the EU. We can use this to deal with any short-term is­sues that arise — to in­vest in busi­nesses, give tax in­cen­tives to ex­porters, ac­cel­er­ate our in­fra­struc­ture and grow our econ­omy. “No deal” means no tran­si­tion pe­riod. Cru­cially, we as a sov­er­eign na­tion can then start to make trade deals very quickly with im­por­tant na­tions like the United States. We can be­gin to get rid of un­nec­es­sary EU reg­u­la­tions that hin­der Bri­tish busi­nesses even though 90 per cent of Bri­tish busi­nesses don’t ex­port to the Euro­pean Union. And we can start to con­trol our own bor­ders in the way that we see fit. That’s de­liv­er­ing on what peo­ple voted for.

Le­gal schol­ars say that the Euro­pean Union can­not put up il­le­gal non-tar­iff bar­ri­ers against us the day af­ter we leave. That would go against WTO rules. We will not erect any bar­ri­ers on this side, nor put in place any tar­iffs. We have of­fered se­cu­rity co­op­er­a­tion with the Euro­pean Union. The Ir­ish bor­der is a thorny is­sue only be­cause the EU has used it as a ne­go­ti­at­ing tac­tic. Their own ex­perts pro­duced a re­port for them called “Smart Bor­der 2.0” on a tech­no­log­i­cal solution to a fric­tion­less bor­der.

The idea that we’re go­ing to run out of food is “project fear” non­sense. If we can’t buy our or­anges from Spain, we’ll buy them from South Africa. This is a huge op­por­tu­nity for Bri­tish farm­ers to pro­duce even more food than we do now. Post-march 2019, there will be new ar­range­ments, but EU cit­i­zens will re­main wel­come to stay here and work here. We con­tinue to see sig­nif­i­cant for­eign and do­mes­tic in­vest­ment. Em­ploy­ment has risen. Our GDP con­tin­ues to grow. We con­tinue to be proven right. A no-deal Brexit is the worst of all pos­si­ble out­comes. The IMF fore­casts a fall in GDP of four per cent for Bri­tain and 1.5 per cent for the re­main­ing 27 EU mem­ber states. It’s a lose-lose sce­nario. We’ll be putting trade bar­ri­ers in place im­me­di­ately with our largest trad­ing part­ner. We lose pref­er­en­tial ac­cess to all of the global trade deals the EU has ne­go­ti­ated for its mem­ber states, in­clud­ing the UK. We won’t be part of new trade deals com­ing on stream with Canada and Ja­pan. The UK will be ne­go­ti­at­ing with pow­er­ful coun­tries like China and the US from a much weaker po­si­tion. We’re no longer part of one of the world’s largest trade blocs. The av­er­age time to agree a trade deal is four to five years.

No­body wants a bad deal with the EU. But the con­ces­sions the UK has had to make is the re­al­ity of go­ing into ne­go­ti­a­tions with a party that is in a stronger po­si­tion, and is stronger eco nom­i­cally. The £39 bil­lion is owed for obli­ga­tions the UK legally signed up to. Re­fus­ing to pay will raise real ques­tions, not just from the EU27 but from po­ten­tial trade part­ners worldwide.

No-deal Brexit means no-deal ev­ery­thing. No ac­cess to Europol or EU data­bases when it comes to track­ing down Bri­tish crim­i­nals who have es­caped abroad. Long queues at our bor­ders. Phar­ma­ceu­ti­cal com­pa­nies and farm­ers warn that we need to stock­pile medicine and food. Emer­gency mea­sures will be put in place, but that’s hardly ideal. We are vol­un­tar­ily putting our­selves in a po­si­tion of real eco­nomic un­cer­tainty. To switch to WTO ar­range­ments, the UK must agree on its trad­ing sched­ules of tar­iffs and quo­tas, not just for the EU27 but for all other coun­tries to sign up to. There is no guar­an­tee we can do that by 29 March 2019.

No-deal Brexit means the im­me­di­ate loss of visa-free op­por­tu­ni­ties for Bri­tish peo­ple to live, work, study and re­tire across the EU. The po­si­tion of 3.2 mil­lion EU cit­i­zens liv­ing and work­ing in the UK will be un­cer­tain. Al­ready, ap­pli­ca­tions for doc­tors and nurses from other parts of the EU to work in the NHS are down. Prior to 2016, we were one of the fastest-grow­ing economies in the G7. We’re now at 0.1–0.2 per cent growth. This is “project re­al­ity”. That’s why Bri­tish peo­ple are com­ing round to a peo­ple’s vote, a sec­ond ref­er­en­dum on the fi­nal Brexit out­come.

Deal or no deal? What would be bet­ter?

THOMAS COLE is head of pol­icy and re­search at Open Bri­tain, part of the pro-euro­pean Peo­ple’s Vote cam­paign (www.open-bri­tain.co.uk)


is co-founder of the pro-brexit cam­paign group Leave Means Leave (www.leave­meansleave.eu)

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