WTO rules would open a Pandora's Box
Both before and after the referendum vote last year, the idea was mooted that the UK could always fall back on World Trade Organization (WTO) rules if it failed to agree a deal with the EU.
However, CBI President Paul Drechsler warned his audience at the Lord Mayor’s recent Business and Investment dinner, this scenario would have disastrous consequences.
“Wherever I go across Europe, I hear concerns about the UK leaving without a deal and falling into WTO rules,” he said. “We should be under no illusions about what this would really mean. A ‘no deal’ scenario would open a Pandora’s Box of economic consequences.”
The UK would face tariffs on 90% of its EU exports by value and a raft of new regulatory hurdles, Mr Drechsler claimed.
Some firms are getting ready for this possibility in order to reduce economic damage, he continued, while some are sitting tight and hoping for a deal.
“But in reality,” Mr Drechlser said, “many firms can’t prepare because the cost of change is simply too high to even consider it.”
Whether you’re a salmon farmer in Scotland, an aerospace giant in the Midlands or a tech start-up in Cambridge, he went on, Brexit will affect your business so the CBI is busy talking to Ambassadors from other EU countries, as well as sister organisations in France, the Netherlands, Ireland, Germany and Malta.
Because leaving without a deal would bring significant tariff and regulatory barriers to trade, Mr Drechsler concluded, business strongly supports the Government in its ambition to secure an ambitious trade agreement with the EU.