LONDON — In recent days negotiators have seemed tantalizingly close to striking a post-Brexit trade deal between Britain and the European Union. But time is running out with just two weeks until the Dec. 31 deadline when Britain withdraws from the European Union’s economic zone, the single market and customs union.
That could mean heavy new taxes on traded goods, gridlocked ports and some types of food disappearing from British supermarket shelves, as well as conflict over fishing rights.
The trading arrangement between the two sides would default to World Trade Organization rules, and deliver a huge hit to businesses on both sides of the English Channel, but particularly in Britain. Here’s why the negotiators talk about a “moment of truth” in the efforts to avoid a chaotic final chapter to the Brexit saga.
How bad could ‘no deal’ be?
Quite bad. Britain has spent decades integrating its economy with continental Europe and companies import and export goods freely without paying taxes — known as tariffs. That would change if a trade deal was not reached, with tariffs applied to a range of goods crossing the border. Cars, for example, would attract tariffs of 10 percent. Farmers could be hit too. The average tariff on lamb meat is 48 percent — threatening some exporters with ruin, and dairy items would be subject to tariffs of about 35 percent.
The other big risk is of extra bureaucracy clogging ports. Some of this is inevitable on Jan. 1 — with or without a trade deal — because checks will increase, and traders will have to complete millions of customs declarations they did not have to before. But no deal would worsen this and, if ports jam on one side of the English Channel, trucks get stranded on both. Under what the government calls a “reasonable worst-case scenario,” up to 7,000 vehicles could stack up on the motorways with delays of up to two days. In Kent, in southern England, a 27-acre site is being built to handle idling trucks, and other contingency plans include one to deploy portable toilets for stranded drivers.
OK, so it’s bad news if you are a farmer, automaker or truck driver, but what about other people?
About a quarter of all food eaten in Britain is produced in the European Union and disruption would come at a time when, because it’s winter, fruit and vegetable imports are high. Food prices would likely rise, and one supermarket chain has estimated that tariffs could increase overall British food bills by 3 to 5 percent. There could also be shortages of some, mostly perishable, products. The supply of others could be hit too, including some medicines, though the government says it has contingency plans to use a variety of different ports and also fly supplies in, including Covid-19 vaccines.
Surely all this would hurt the Europeans, too?
That’s correct, and Britain would raise money in tariffs because it imports more goods than it exports to the European Union (in 2019, it recorded an overall…
Go to the news source: Tariffs, Traffic and Red Tape. What a ‘No-Deal’ Brexit Could Mean for Britain.