Brexit: A “No Deal” will be hurtful to the UK!
Surprise, Surprise, not really though, but for someone this will be insights into an open field May-Day, and we are not talking strong and stable Conservative Party government. No, we are talking May Day, as in all aboard a ship sailing in stormy waters without any significant captain into the abyss. Theresa May, if she goes for the No-Deal with the European Union, she is risking a lot and will not gain much for the Kingdom, except for keeping the Brexiteers on her side and if that is worth it is another bargain.
Today, the European Commission published ‘Preparing for the withdrawal of the United Kingdom from the European Union on 30 March 2019’, which is various amount of document saying what will happen, other than the notices of withdrawal, which they have made for all types industries and stakeholders within the Union. Today, they have unleashed documents showing possible outcomes if the negotiations fails.
What is most striking was ‘Main consequences of scenario 2: withdrawal on 30 March 2019 without a withdrawal agreement’, where the arch nemesis of possible soft transition from being a member state to become a third country to Union appear. The results are devastating at least and at best a big blow to everyone who thought it would be genuine good idea to do it in that way.
First assessment as a third country, the EU Laws Cease to apply in the United Kingdom, which is cool in itself and gives, added freedom as a sovereign. The rocks starts to hit the boat, when the second assessment hits, that is “Citizens: There would be no specific arrangement in place for EU citizens in the United Kingdom, or for UK citizens in the European Union”. Meaning, there are no plan or any legal framework for how to take of or, if the UK citizens in the EU has to leave or the EU citizens has to leave as well. This is putting many lives of expats into limbo in the EU, but also in the UK.
The Third assessment by the EU concerning a no deal is: “The European Union must apply its regulation and tariffs at borders with the United Kingdom as a third country, including checks and controls for customs, sanitary and phytosanitary standards and verification of compliance with EU norms. Transport between the United Kingdom and the European Union would be severely impacted. Customs, sanitary and phytosanitary controls at borders could cause significant delays, e.g. in road transport, and difficulties for ports”. Therefore, it is not like this will frictionless either, the EU will with all means put up a hard-border with checkpoints, to secure the transit of goods, it will be like in the past and the duty on goods will appear. The goods will be going through a massive check compared today and prolong the travel-time of the goods going into the Union. In addition, it will also be more costly, be more time consuming and add costs to the consumers, as the taxes on the products will come in the aftermath too.
The Fourth assessment: “Trade and regulatory issues: The United Kingdom becomes a third country whose relations with the European Union would be governed by general international public law, including rules of the World Trade Organisation. In particular, in heavily regulated sectors, this would represent a significant drawback compared to the current level of market integration”. This is yet another blowback, as the financial businesses and banking industry, will be left behind, not only the goods transiting to the Union, but all business will be left with WTO rules and tariffs as a third country, they will not have specialized agreements or securing trade between the Union and UK. This will surely hit industry, financial inclusion and all other cross-border businesses there are today between the parties, this will surely be costly and make it less accessible for Union Companies to access UK and vice versa.
The fifth assessment: “Negotiations with the United Kingdom: Depending on the circumstances leading to the withdrawal without an agreement, the EU may wish to enter into negotiations with the United Kingdom as a third country”. This is implying that the UK will have to configure their deals with Union and will come as a third country into negotiations, as they are outside and will not have benefits of previous membership. This meaning that they will come to Brussels as an outsider. They are really left with nothing and will start fresh negotiations without any pre-empty strikes or significant advantage, as they are not involved internally within the Union or based on the principals of the Union as whole.
The sixth assessment: “EU funding: UK entities would cease to be eligible as Union entities for the purpose of receiving EU grants and participating in EU procurement procedures. Unless otherwise provided for by the legal provisions in force, candidates or tenderers from the United Kingdom could be rejected”. This is showing the first cuts of funding and spending directly as a third country, as the Union funding and grants dries up. Therefore, the programs and the sudden closure of these will hit the UK. The collective spending on UK will stop and this will be costly for the UK. The UK will also not pay into these funds as a Member State, but will lose vital parts by the end of the membership.
Therefore, nothing good comes out of the no-deal. No securities of the citizens, goods will hectic and time consuming, the borders will be hard and the transit will take more time, the WTO laws put into effect and the trade regulations of free movement without tariffs will be gone, also trade in general across borders will be stifled. The final negotiations will be in another narrative, than today as the measures will be for a third country and not former member. The last issue that funding will cease, as much as the legal framework of the Union will stop too. There are little good news in this, other than becoming a sovereign, but all alone, which loose the benefits of today and have to pay a lot to gain anything positive in the future. Which is all but uncertain, the EU puts barriers, but as their protocol for a third country, the Tories cannot pick and mix. Even as they are putting legislation in, who knows how this will hit.
But this should be a reality check for those who says “No-Deal” is a no problem, because the EU certainly have protocols they will follow and the consequences are dire. Peace.