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Analysis

No-deal will hit business hard, EU spells out how

by Denis MacShane & Luke Lythgoe | 10.01.2018

Ministers are happy to threaten crashing out of the EU without a deal. Brussels has sent memos to individual industries spelling out exactly what would happen if the UK suddenly became a “third country”. It’s time the government admitted the painful reality of their threat.

The EU highlights many obstacles businesses will face. These include: operating licences for airlines no longer being valid; separate EU approval for chemical products such as disinfectants; changes to drug product labelling; trademarks for regional UK products no longer being valid; and restrictions on marketing British mineral water in the EU because it is “extracted from the ground of a third country”. If you ever wondered what “non-tariff barriers” are, this is it.

In many cases businesses can move operations to the continent, and avoid restrictions by showing an “effective and stable establishment” in the EU. Otherwise they will find it difficult, even impossible, to operate within Europe.

David Davis has strongly objected to the EU’s warnings, but what does he expect when one of his government’s most famous mantras is “no deal is better than a bad deal”? Although this rhetoric has been toned down lately, just yesterday May appointed Suella Fernandes as a new Brexit minister – a hard-Brexiter who once claimed leaving without a deal would be “great” for Britain.

Keep on trucking?

Perhaps one of the most far-reaching examples of how Fernandes is wrong is the risk that truckers and expats could lose their driving rights in the EU on March 30 next year. With 4 million lorries crossing the Channel by ferry each year and 2 million Brits living all or part of the year in the rest of the EU, one might have thought the government would have some interest in ensuring there was no risk to that flow of people and goods.

A Commission statement says vehicles intended for the carriage of goods or passengers need a certificate of professional competence. After Brexit, such certificates issued by the UK “will no longer be valid in the EU27”. Likewise, individual UK drivers licences will no longer be “mutually recognised” after withdrawal from the EU.

An earlier international convention, the 1949 Geneva Convention on Road Traffic, will almost certainly allow UK driving licences to be accepted for tourist purposes. But for expats it could be another story. In Spain, a non-EU citizen has to pass a driving test to keep driving after an initial period. The test is both practical and written. It is not clear how many of the retired Brits on the Costas have enough Spanish to pass a written driving test exam.

What’s more, “cabotage” – when a British lorry transports goods from one part of the EU to another – will become illegal. The UK would also lose its current rights to run bus and coach services inside the EU.

Assuming May agrees that the UK will keep obeying EU laws for a two-year transition period after Brexit, the prospect of lorries and cars no longer driving into France next March 30 will be averted. But for how long? Negotiations to achieve a road transport agreement between the EU and Switzerland lasted nearly a decade – from 1993 to 2002.

Solutions can be found, but only if Britain agrees to abide by EU rules. Far better would be to remove the threat by suspending or binning the whole Brexit process.

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Edited by Hugo Dixon

6 Responses to “No-deal will hit business hard, EU spells out how”

  • “Far better would be to remove the threat by suspending or binning the whole Brexit process.”

    Hugo is not far better, if you could only accept that we are going to leave. The fact is that the EU failed to make the case for the EU to the majority of British voters. We now no longer have to emulate the EU i.e. 28 people in the same bed fighting over the duvet. We can be different, the arguments for and against are now irrelevant, it is all about the future.

    With your intellect this site could be really powerful. I would love to see this site turning into the leading site for Brexit options, solutions and thought leadership. It no longer matters if someone is a Brexiteer or Remainder. What matters are the options we face and how we can advance the thinking within government.

  • “Far better would be to remove the threat by suspending or binning the whole Brexit process.”

    Hugo is it not far better, if you could only accept that we are going to leave. The fact is that the EU failed to make the case for the EU to the majority of British voters. We now no longer have to emulate the EU i.e. 28 people in the same bed fighting over the duvet. We can be different, the arguments for and against are now irrelevant, it is all about the future.

    With your intellect this site could be really powerful. I would love to see this site turning into the leading site for Brexit options, solutions and thought leadership. It no longer matters if someone is a Brexiteer or Remainder. What matters are the options we face and how we can advance the thinking within government.

  • It is now history that Mr. Wensleydale (aka David Davis) previously said (on ca. 26 / 27 October 2017):

    “the government was in the midst of carrying out approximately 57 sets of analyses, each of which has implications for individual parts of 85% of the economy. Some of those are still to be concluded”

    and in addition said: “She’ll (Theresa May) know the summary outcomes of them …” and “… she won’t necessarily have read every single one, they are in excruciating detail.”

    A great big thank you to Michel Barnier and team, who have had the thought, consideration and courtesy to forewarn UK companies just recently of the realities of a “no-deal Brexit”.

    Ooops, wasn’t this meant to be secret? Damm, I think Mr. Barnier has just blown it! Didn’t anyone tell him, that he had to redact it all? (i.e. Psst, keep the truth to yourself!)

    He’s just destroyed the Brexit Sectretary’s negotiating hand. Oh, dear!