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An academic think tank in the UK has warned that if no deal is reached with the EU in post-Brexit trade talks, the British economy could hit three times more in the long run than the coronavirus.
The group ‘UK in a Changing Europe’ says shortages of fresh food and medicine, queues at ports and borders and more ‘hassles’ to travel to the continent are also possible.
A report by the organization, based on models with the London School of Economics, says that the impacts of the coronavirus can mitigate or hide the immediate impact of a no-deal exit.
But he warns that failure to reach an agreement with Brussels would have a significant long-term impact.
The authors write: “The claim that the economic impacts of Covid-19 outshine those of Brexit is almost certainly correct in the short term.
“Not even the most pessimistic scenarios suggest that a no-deal Brexit would lead to a production drop comparable to that seen in the second quarter of 2020.
“However, assuming a reasonably strong recovery and government policies succeed in avoiding persistent mass unemployment, in the long term, Brexit is likely to be more significant.
“Our LSE model of the impact of a no-deal Brexit suggests that the total cost to the UK economy in the long run will be two to three times higher than the Bank of England’s forecast of the impact of Covid-19. “
The report warns that a no-deal Brexit runs the risk of disrupting parts of the UK economy that have been resistant to Covid-19, not least food supply chains.
The transition period, which kept the UK aligned with the EU single market and customs union rules to allow trade to flow smoothly after Brexit, expires at the end of the year unless both parties agree to an extension. , something that Boris Johnson has ruled out.
Talks on trade agreements between the two sides continue, but the prime minister has set an October 15 deadline for reaching an agreement, otherwise, he has said he will simply withdraw from the negotiating table.
Professor Anand Menon, Director of ‘Britain in a Changing Europe’, said: “While the Prime Minister said that no deal is a ‘good result’, our report shows that it can cause significant disruption and will have a negative economic impact. significant.
“Just as important will be the political consequences of not reaching an agreement, in particular with the UK and the EU, but also within the UK, in particular Northern Ireland, and also internationally.”
Leaked Brexit letter warns of 7,000 trucks queuing in Kent with two-day waits
The UK minister responsible for no-deal planning, Michael Gove, has written to logistics groups with the government’s planning for a “reasonable worst-case scenario”, warning of possible two-day delays for cargo traveling to France in January. .
The Cabinet Office document states that, in the worst case, between 30 and 50% of the trucks that cross the English Channel will not be ready for the new regulations that will take effect on January 1, 2021, while a “lack of capacity for trucks in French ports” could reduce traffic flow through the strait to 60-80% of normal levels.
“This could generate maximum queues of 7,000 trucks bound for the port in Kent and associated maximum delays of up to two days,” the documents said.
These delays could last at least three months, shippers were warned, as alternative routes are sought and supply chains become familiar with the new systems and requirements.
Gove is to outline the working scenario, which the Cabinet Office stressed is not a forecast, to MPs in the House of Commons today.
In his letter, Gove said: “Regardless of the outcome of the UK-EU negotiations, traders will face new customs controls and processes.
“Simply put, if traders, both in the UK and the EU, have not completed the correct paperwork, their products will stop when they enter the EU and there will be a disruption.
“It is essential that merchants act now and prepare for new procedures.”
But sector heads have accused the government of not doing enough in recent weeks because of the threat of post-Brexit border delays.
Logistics UK, formerly the Freight Transport Association, was furious last week after being told that the government’s Smart Freight system, designed to reduce the risk of cargo delays once Britain is out of EU rules, It would still be in test mode in January when British exports face new border regulations.
In response to the worst-case document, UK Road Transport Association Executive Director Richard Burnett said: “We have been constantly warning the government that there will be delays at ports, but they are simply not committed to the industry to find solutions.
“Traders need an additional 50,000 customs brokers to handle the mountain of new paperwork after the transition, but government support to recruit and train those additional people is woefully inadequate.
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