This is an update to a previous Insight article from February 2019 titled, ‘What Can We Reasonably Say?’
This was designed to make sense, amongst the noise, of the trade impacts of Brexit uncertainty at that time. Once again we are in a time of political turmoil. So can we shed any further light on current prospects?
- Political developments have made a ‘no deal’ Brexit more likely.
- Any ultimate relationship negotiated with the EU is now more likely to be a free trade agreement rather than a customs union. That may take time to negotiate and the climate under which that takes place could impact the time-line.
- Considerable uncertainty remains about the transition post 31st October
- Government and businesses are more likely to be advanced in plans to deal with any short-term shock. A lot of costs have already been incurred as a result.
- Impacts are likely to be uneven. Agricultural and food products are more vulnerable to material tariff increases if we assume WTO rules will be applied. Sectors and businesses with complex, cross-border, supply chains will be more exposed to non-tariff issues relating to customs clearance. Conversely, it is possible to identify activities that will be relatively unaffected, precisely because they do not rely on EU trade.
- It is hard for businesses to plan long term in areas most directly impacted by Brexit whilst uncertainty persists.
- In common with all ‘shocks’, the less financially robust are less equipped to ride out the consequences.
Trade & Export Online Units covering Sources of Information and Customs Procedures provide more depth to the underlying principles touched on in this article for anyone wishing to work through the implications. Click on the course slides below to access the learning.