CBI President John Allan has sounded an alarm over an overlooked consequence of a ‘no deal’ Brexit – the implications for the UK of ceasing to be part of trade deals it belongs to through membership of the EU.
As a member of the EU, the UK currently benefits from 40 trade agreements over five continents. The CBI estimates the total amount of global GDP covered by the EU and the countries it has trade agreements and partnerships with to be 37%.
Calling for compromise on both sides of the Channel, Mr Allan said: “If the UK leaves the EU without a deal, we could cease overnight to enjoy the benefits of tariff-free trade with, and preferential access to, markets of fundamental importance for British products and services, from Japan to Turkey.
“Many British firms are unaware that it’s not just their relationships with EU customers at risk from a no deal Brexit, but relationships across the globe. From rapidly growing creative firms trading with South Korea to specialist machinery firms trading with Mexico, these EU Free Trade Agreements have supported firms of all sizes to grow and could be lost overnight.
“Despite the hard work of ministers and officials to ensure this does not happen, the consequences are serious. Individual businesses in every corner of the UK that trade with markets outside Europe would have tariffs worth hundreds of millions of pounds slapped on them instantaneously. Car companies risk being dropped from complex global supply chains that support these deals, and services firms risk losing vital protections that allow them to operate abroad.
“And by no longer being part of the EU’s trade deals, the UK will miss out on golden trade opportunities that have been years in the making. Indeed, these trade deals – spanning five continents – form the bedrock of our exports.
“This looming danger has been widely overlooked and is yet another reason to add to the lengthy list of why no deal is not an option for the UK economy, and is a great risk for jobs in local communities. It is critical that compromise on both sides of the Channel is shown and that politicians work together quickly to come to a deal. With the UK remaining a member of these deals throughout the transition period, we will then have the necessary time to focus on getting the trade deals that will lie at the heart of the UK’s future prosperity right.”