At a time of such noise and conflicting ‘truths’ about Brexit, what can we reasonably say? It is not our brief to make a political judgement, but the politics of the moment will have a short term and long term impact on trade. Also, the situation could change significantly and quickly.
So what can we say?
- Despite the vote passed in Parliament against ‘no deal’ on the 29th January, Brexit without a deal is still possible. The fundamentals of tariff and non-tariff barriers are explained in Unit 9 of Trade & Export Online. From this understanding, we can only conclude there will be an uneven impact under this scenario.
- If the risk of ‘no deal’ rises further there will be pressure on the UK and EU members to put in place further measures to reduce the short and long term impacts. However, it is wiser to assume mitigation, rather than the elimination, of such impacts!
- At this stage the wise counsel for any business potentially impacted is to ensure contingency arrangements are well advanced.
- It is still feasible that a viable customs arrangement could be reached. However, whilst on the 29th January Parliament passed a vote in favour of renegotiating the Irish Backstop, it is far from certain how far the EU will go to accommodate that stance.
- Arguments have been put forward suggesting many of the unresolved customs issues could be managed using available technology and practice. At one level these have a thread of feasibility, but may not be a comprehensive short-term answer. Governments have to balance the facilitation of trade with the imperative of maintaining the integrity of borders in the face of a variety of threats, conflicting priorities and self-defined ‘red lines’.
- Whilst there is no current mandate to delay Brexit, the pressure for this may well rise. Either if the prospect of ‘no deal’ grows, or in the face of lobbying over impacts. Also, it is not unreasonable to conjecture that if progress is made in negotiations that more time may be required to ensure their conclusion and the implementation of a ‘soft landing’.
These elements have been in play throughout the negotiation, but whilst the emphasis on them has fluctuated, a high level of uncertainty remains.