Once again, the deadline for an agreement between Great Britain and the EU is passing today. This makes a no-deal more likely, and more and more states and companies have to prepare for it. Six questions and answers.
Where are we in the Brexit saga? Great Britain has not been a member of the EU since February 1st. In a transition phase until the end of 2020, an agreement on future relationships is to be negotiated. But time is running out. Problems and changes are inevitable even with an agreement, because the British are leaving the internal market and the customs union. Without an agreement (no-deal Brexit), massive disruptions for the economy on both sides are to be expected. Experts assume that there is no longer enough time for an agreement that covers all areas.
What is changing at the border? Regardless of what the agreement looks like, trucks will have to declare the import and export of goods in the future. That means around 400 million new declarations per year for companies on both sides of the border. The cost of this is estimated at CHF 15.6 billion. The British NAO comes to the conclusion that the British IT system is not ready for the digital processing of customs documents. The border controls will delay traffic. In Dover, London expects a backlog inland with up to 7,000 trucks.
Will tariffs be introduced? If there is no trade agreement, both sides will introduce tariffs in addition to the declarations. The rules of the World Trade Organization (WTO) would apply. Tariffs would rise 37.5 percent on dairy products, 11.5 percent on clothes and 10 percent on UK cars.
Why is everyone talking about the automotive industry? The automotive industry is an important employer and is closely interlinked across the English Channel. Around 60 percent of all individual parts that are installed in the UK come from the EU. Certain components cross the border several times before being assembled. For the auto industry alone, 1,000 trucks cross the border every day. If no deal can be reached, every border crossing of individual parts and finished cars would be taxed at around ten percent.
According to the Acea association, the EU and UK industries would suffer losses of CHF 100 billion over five years. That puts hundreds of jobs at risk. On the island, the auto industry is often the only employer in structurally weak regions. The industry fears tariffs because of the rules of origin even with an agreement.
Why could criminals rejoice? If there is no agreement and no emergency regulation, the British would no longer have access to the database in the Schengen information system SIS II. 90 million data on wanted criminals, missing persons or illegal immigrants are stored in it. The British police not only fed in data, but requested 572 million data in 2019. That would no longer be possible without an agreement.
No more cooperation with Europol
Police cooperation via instruments such as Europol will also end and even the European arrest warrant would no longer be valid on the island. This creates refuge for criminals and makes fighting terrorism much more difficult. An emergency settlement in this area is likely.
Where are the emergency rules for a no-deal?
Aviation industry: Without an agreement, air traffic would come to a standstill. The airlines would lose their take-off and landing permits. Temporary exemptions are likely in this area. Financial sector: An emergency regulation for so-called clearing in derivatives trading has been adopted. But all other areas of the financial industry are facing uncertain times.