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Flag of the European Union and the British Union.
Negotiations between the UK and the European Union on a post-Brexit trade deal will resume on Sunday as both sides try to salvage a deal following a crisis call between their respective leaders.
With a deal at stake, here is a rundown of what is at stake if the talks fail.
If an agreement is not reached, it would be a severe blow to businesses and consumers on both sides. Decades of free movement of goods, services, people and capital would come to an abrupt end when Britain leaves the single market and the EU customs union on December 31.
Businesses would face tariffs, quotas and potential chaos as they move goods across the border, City of London finance companies would lose their passport to offer services across the EU, and consumers would see their rights to live and stay on the other side of the border. the English Channel was reduced.
Even bringing a pet dog to the mainland would become more difficult.
The economic blow
Without a trade deal, the UK economy would suffer a short-term shock of around 1.5% of GDP, according to Bloomberg Economics. The Office for Budget Responsibility, Britain’s independent spending watchdog, forecasts a 2% drop in GDP.
Instead of frictionless trade with a market of over 400 million consumers, British companies would go back to trading with the EU under the rules set by the World Trade Organization in 1995. That means that imports and exports to the EU they would be subject to tariffs negotiated by the WTO. – essentially a tax on goods.
The EU average tariff rate is 3%, but some products would attract much higher levies: British carmakers would face a 10% tariff on all car exports to the EU, while farmers exporting dairy products they would see a 35.4% charge.
The auto industry alone would face a 55 billion pound hit due to a collapse in demand and local production due to tariffs, according to the Society of Automobile Manufacturers and Traders.
Tariffs could also lead to higher prices for businesses and consumers. For supermarkets, the cost would be 3.1 billion pounds ($ 4 billion) a year, according to the British Retail Consortium. About 85% of imported food from the EU would attract tariffs of 5% or more.
Around 43% of the UK’s exports, valued at around £ 300bn, go to the EU each year, and the bloc is the source of 51% of its imports.
City of London
Financial companies will lose their passport to offer services across the EU, whether there is a trade agreement or not, forcing them to change staff and strengthen their operations in the bloc.
Their access to customers would depend on the EU deeming UK standards equivalent to its own in 40 areas. Failure to reach a trade agreement would delay that process. Even if the permit is granted, the EU could still withdraw it without notice.
customs
Companies exporting to the EU will need to submit customs declarations with or without a trade agreement. To move goods from Dover to Calais, the UK’s busiest crossing point with the EU, trucks will need a government-issued permit stating that they have the correct documentation and will not be held by French officials.
Delays at the border would threaten to lead to chaos for manufacturers who depend on parts that arrive just in time, including aerospace and auto manufacturing companies, while fresh food products could rot in the lines of trucks.
Passports
Even with a trade agreement, British visitors to the EU will need more than six months on their passport to travel. Those staying in the EU for more than 90 days may require a visa.
Motorists may need an international driving license. Traveling with pets to the EU will also be more difficult. Animal owners will face a four-month process that includes blood tests, vaccinations and health certificates.
Immigration
The free movement of people between Britain and the EU will end. The UK plans to use a points-based immigration system, in which foreign workers must show that they meet certain criteria before they are allowed to come to Britain for work.
Criteria include speaking English, having an existing job offer and earning more than £ 20,480 a year.
