UK’s trade plans in case of a no-deal Brexit

UK’s trade plans: More red tape and higher business costs — here are the UK’s trade plans in case of a no-deal Brexit

British businesses should prepare for higher barriers to trade in case the government doesn’t reach a deal with the European Union over Brexit, Downing Street said Thursday.

In a series of ongoing publications of what would happen in case of a no-deal, the U.K. government said that European goods entering the U.K. would require an import declaration, customs checks could be carried out and customs payments could also be applied.

At the same time, when importing goods from the EU, U.K. businesses would have to pay VAT (value added tax, currently 20 percent) and complete paperwork before receiving European products.

Those exporting from the U.K. to the EU would have to apply the same regime that is currently in force for products that are sold outside of the EU — meaning more paperwork and costs too.

“It’s not what we want, and it is not what we expect,” Dominic Raab, the U.K.’s Brexit chief, told a news conference about not reaching a deal with the EU.

“We need to have a sensible, responsible and realistic conversation about what a no-deal situation really means in practice,” he added.

As a result, Prime Minister Theresa May’s government has started to advise people on how to prepare for that eventuality. The U.K. is due to leave the EU on March 29 next year and their future relationship after that date remains unclear.

Negotiators are aiming to reach a Brexit resolution in October to ensure there is enough time to approve it across Europe. However, political and technical constraints are making that informal deadline harder to achieve.

In fact, not only the U.K. and EU legislators have been stepping up their own preparations for a no-deal scenario, as key policy makers, including the governor of the Bank of England, have warned that there is a real risk that such a scenario might take place.

SGA World