It may well be the scenario in which everyone loses the most, but the prospects of a so-called “no-deal” Brexit grows by the day. German manufacturers are among the many whose business will be affected.
Bookmakers — those who accept wagers and bets — are everywhere on British streets. The odds they offer on various events are generally held up as one of the most reliable guides to the prospect of something happening or not.
When it comes to the most vexatious issue of the day — the UK’s Brexit deal — British bookmakers rate the chances of the current EU-UK draft agreement being signed off by all parties by March 30, 2019 (Brexit Day) as only 50:50.
A no-deal Brexit is still very much on the table. Chaos, division and rancor abound in British politics. There’s disagreement in Europe too, with Spain threatening to hold up the deal over Gibraltar. Other European governments reportedly have concerns over concessions granted to the British.
If the worst happens and the UK leaves the EU without a deal of any kind, many aspects of life will change on both sides of the English Channel but it’s arguably business people who will be most affected in the short term.
The huge German manufacturing sector has a particularly big stake in the discussion. Ulrich Ackermann is a foreign trade specialist representing the German Mechanical Engineering Industry Association (VDMA), the body which represents Germany’s influential machinery manufacturing industry.
“If a hard Brexit comes, then I think in the first weeks and months, we will have chaos,” he told DW. “But what I could imagine is that after some days or weeks, both sides decide, ‘ok, let’s go back to the status quo’. Because everyone will realize —hopefully the British side too — that chaos doesn’t make any sense.”
Back to the WTO
What would chaos look like? Firstly, if the UK leaves without a deal, there will be no transition period, provisionally agreed to last until December 2020. That would mean that from March 30, 2019, all EU-UK trade would be under World Trade Organization (WTO) rules.
The implications of that for EU companies that have trading relationships with the UK, either through supply chains or direct sales are profound. Under WTO rules, there would need to be immediate customs and regulatory checks, and tariffs would need to be levied on goods moving between the EU and the UK.
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