Trade talks between Great Britain and the European Union are near collapse and are not likely to yield a deal anytime soon. On Sunday, the parties extended the talks but with the two sides so far apart on many issues, Prime Minister Boris Johnson has been warning businesses to prepare for a no-Brexit business climate.
Leaving the EU was always going to be difficult but few Brexit supporters could have foreseen the chaos that’s about to envelop Great Britain on the land, sea, and in the air.
The UK could experience shortages of vegetables and other goods it sources heavily from Europe for months to come, the Sunday Times reported, with prices for consumers likely to soar due to newly-imposed EU tariffs.
UK shops are already experiencing shortages and delays due to congestion at ports caused by Brexit stockpiling.
Representatives from the UK toy industry told Business Insider this week that many popular children’s toys will be unavailable to consumers this Christmas because of the delays.
The ports are clogged with shipping as manufacturers are trying to get their cargo unloaded before the deadline. And it isn’t only tariffs that will be a bother.
If no deal is agreed, it would be forced to trade with the bloc according to rules set out by the World Trade Organization. That would mean new tariffs and other barriers, such as regulatory checks and paperwork.
The British PM said his government will continue to try to reach a trade deal, but warned there may not be a resolution by the January 1 deadline. “I do think there is a deal to be done but we remain far apart on key issues.:
“And we have to take back control of our fisheries,” Johnson said.
Those fisheries are one of the key issues of contention that need to be settled before a deal can be reached. Johnson has ordered the Royal Navy to protect UK waters from the fishing boats of other EU countries.
The Royal Navy says it won’t be shooting at the vessels, only intercepting them and “escorting” them out of UK waters. But it underscores the seriousness with which the UK government is treating the idea of a no-Brexit deal.
The bad economics of Brexit had always been expected, but these results are worse than pre-Brexit vote analyses predicted.
The UK Office for Budget Responsibility (OBR) estimates that a no-deal Brexit would knock off £40 billion ($53 billion), or 2%, of the UK’s economic output in 2021, and leave more than 300,000 people unemployed by the second half of next year.
However, the OBR said in November that even if London and Brussels can reach a deal, their new trading relationship is expected to lead to a long-run loss of output of around 4% compared to Britain remaining in the European Union.
The short term will be brutal for Great Britain but the picture brightens in the near future. Not having the EU as a drag to its economy should lead to higher growth and employment in five years. The dislocations today are temporary. Great Britain will eventually ink a trade deal with the EU and the United States, which will ease those dislocations substantially.
Ten years from now, will people in England see Brexit favorably? I don’t think they’ll be able to tell the difference economically, but the sense of nationhood will be stronger. And that’s something to celebrate.