No-deal Brexit - please could someone explain this?(13 Posts)
I've read about it, but still don't really understand what it means probably partly because it's all so uncertain.
Please could someone explain in really basic terms what a) 'no-deal' Brexit means and b) why 'no deal is better than a bad deal' (I'm genuinely confused about how no deal could be better than a bad deal, but can kind of see that maybe no deal and a bad deal would perhaps be pretty much the same thing, in a way).
We have to agree a trade deal with the EU. If we can’t agree in the time available we will have no such deal and will have to trade on World Trade Organisation rules (mostly).
The question of what is a good deal and whether it’s better than no deal is all founded on opinions.
If there is no deal with the EU then we will have to negotiate with the WTO as to how we will trade with other countries.
Not sure I agree with that - WTO terms will apply to non-EU countries anyway. The no deal version just means wto terms for trade with the 27 too, doesn’t it?
This is a good explanation I think www.economist.com/blogs/economist-explains/2017/01/economist-explains-4
As to why no deal is better than a bad deal - I think we are into soundbite territory here as no deal is also a bad deal!
Actually it’s more than that. Often when people talk about ‘no deal’ they mean no trade deal which would mean we have no preferential access to markets of countries within the EU meaning businesses potentially have to jump through all sorts of hoops and face taxes to trade. However the reality of ‘no deal’ extends far beyond that. There are thousands of agreements we are party to as part of the EU which enables the UK to do everything from import nuclear material to fly planes to the USA which will need to be replaced with new deals... a true no deal senario would be truly catastrophic which is why in general politicians mean a bad TRADE deal would be worse that no deal. Not literally no deal of any kind at all.
I watched a tax webinar on Brexit issues this week presented by one of the global accounting software providers.
Their view is that it highly unlikely that we will go onto WTO trading terms with the EU. It is not in the EU's nor the UK's best interests. Few developed countries around the world trade with each other on these terms, they are just there as a bare minimum.
They also said: Definitely not a Swiss style deal (neither Switzerland nor the EU would agree to these terms if they had their time again), unlikely Norway style deal, and more likely a 'Canada-plus' deal (i.e. Canada deal is goods, Canada-plus would add terms for services).
No deal means we have no agreement on trading terms with the EU countries. So they could impose huge tariffs on goods that we export to them, effectively killing our access to those markets. Without agreements on data sharing, cross border services couldn't operate. Without air transport agreements, U.K. airlines would have no rights to use the airspace and airports of EU countries. This is vastly simplistic but gives some idea of the no deal scenario.
I have no idea why someone would say that no deal is better than a bad deal. It's nonsense.
What is a Canada-style deal? Is it a reference to how Canada trades with other countries?
WTO terms will apply to non-EU countries anyway
The UK has no WTO terms, it is currently a WTO member as part of the EU. The US has already rejected the joint EU UK tariff proposals
It is worth noting the CETA (the EU Canada deal) has been being negotiated in one form.or another since 2004.
Canada deal was between the EU and Canada for preferential terms on trading. The webinar I watched seems to say the agreement needed to go further on services for the UK-EU deal.
No deal means we trade on WTO terms with the EU and with all of the other non-EU countries in the world.
As a member of the EU, we have trade deals with many non-EU countries, including a deal called Everything But Arms with some of the very poorest countries in the world, allowing them zero tariff trade with the EU.
What is important to remember with regards to trade is that it is not just about having low tariffs on products, but also the non-tariff barriers. That includes exciting stuff like documentation requirements and checks at the borders, quotas and so on.
This kind of stuff is likely to be very costly - people in businesses have to fill in paperwork, lorry drivers have to wait extra time at the borders, the country has to spend more money on personnel, they need new appropriate computer systems to handle this and they need more space to do the border checks.
On top of that, a no deal scenario (with absolutely no deals done on anything) could also impact stuff like Open Skies (aviation regulations - in the very worst case, UK-EU flights could be grounded) and Euratom (regulation on nuclear energy - which includes radiation used at hospitals) and many other deals.
No deal is not better than a bad deal - it is a lie in the same way as the £350m/week to the NHS was.
A bad deal would include some sort of arrangement on some of these very important matters, and that is better than no deal at all.
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