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1/ Alex makes a really important point about No-Deal not ending uncertainty, and I wanted to expand on it a little by discussing *some* of what businesses will and won't know after a No-Deal.
Welcome to threadtown, pals.
Welcome to threadtown, pals.
2/ Tariffs
Businesses exporting from the United Kingdom will know the tariffs they'll face in the EU, and elsewhere.
In the EU they'll face the Bloc's MFN tariff rates (ec.europa.eu/taxation_custo…), and they'll face the MFN tariffs of others that haven't rolled over FTAs.
Businesses exporting from the United Kingdom will know the tariffs they'll face in the EU, and elsewhere.
In the EU they'll face the Bloc's MFN tariff rates (ec.europa.eu/taxation_custo…), and they'll face the MFN tariffs of others that haven't rolled over FTAs.
3/ Tariffs 2
Businesses importing from anywhere without a rolled over FTA will know what tariff they'll be paying (gov.uk/government/new…) but not how long the tariff temporary tariff regime will last, or whether Boris Johnson's administration will tinker with it.
Businesses importing from anywhere without a rolled over FTA will know what tariff they'll be paying (gov.uk/government/new…) but not how long the tariff temporary tariff regime will last, or whether Boris Johnson's administration will tinker with it.
4/ Tariffs 3
Businesses facing tariffs in the EU and around the world won't know how long it will be until as-yet-hypothetical FTAs eliminate or reduce these tariffs, if at all.
More than likely, tariff relief will be years away for most partners. Trade agreements take time.
Businesses facing tariffs in the EU and around the world won't know how long it will be until as-yet-hypothetical FTAs eliminate or reduce these tariffs, if at all.
More than likely, tariff relief will be years away for most partners. Trade agreements take time.
5/ Paperwork
A No-Deal scenario means, definitively, all future trade between the UK and EU will require the standard paperwork which is currently made unnecessary by the Single Market and Customs Union.
No scenario short of rejoining alleviates that.
A No-Deal scenario means, definitively, all future trade between the UK and EU will require the standard paperwork which is currently made unnecessary by the Single Market and Customs Union.
No scenario short of rejoining alleviates that.
6/ Paperwork 2
What businesses won't know is when and if an EU-UK FTA will be negotiated, and what the Rules of Origin they'll have to meet will look like (though the EU's existing FTAs offer a guess) and what paperwork they'll need to prove compliance (again, can guess).
What businesses won't know is when and if an EU-UK FTA will be negotiated, and what the Rules of Origin they'll have to meet will look like (though the EU's existing FTAs offer a guess) and what paperwork they'll need to prove compliance (again, can guess).
7/ Regulations
Businesses will know how some EU regulations will apply to them, because these are covered in the EU's No-Deal Preparedness notices.
They will not know if and for how long temporary unilateral EU measures might be extended.
ec.europa.eu/info/brexit/br…
Businesses will know how some EU regulations will apply to them, because these are covered in the EU's No-Deal Preparedness notices.
They will not know if and for how long temporary unilateral EU measures might be extended.
ec.europa.eu/info/brexit/br…
8/ Regulations 2
Businesses will hope the UK and EU's regulatory bodies can come together to quickly sign MRA's and other low-level deals to facilitate meeting and demonstrating compliance with one another's standards.
They won't know when, if and where this will happen.
Businesses will hope the UK and EU's regulatory bodies can come together to quickly sign MRA's and other low-level deals to facilitate meeting and demonstrating compliance with one another's standards.
They won't know when, if and where this will happen.
9/ Regulations 3
While UK regulatory sovereignty and its potential has often been cited as a benefit of Brexit, there is little clarity on how the Johnson government will actually change regulations.
Ditto what an EU, without the UK in the room, may decide to do.
While UK regulatory sovereignty and its potential has often been cited as a benefit of Brexit, there is little clarity on how the Johnson government will actually change regulations.
Ditto what an EU, without the UK in the room, may decide to do.
10/ Services
Businesses supplying and procuring services from the EU will know some of the restrictions and barriers they'll now face, but many of these are within the competency of individual EU Member States or the UK Government.
Clarity may take months to emerge.
Businesses supplying and procuring services from the EU will know some of the restrictions and barriers they'll now face, but many of these are within the competency of individual EU Member States or the UK Government.
Clarity may take months to emerge.
11/ Data Flows and Privacy
The EU has a specific approach to the movement and storage of data. This approach is not shared by others, such as the United States.
A UK seeking to hew closer to the US line may risk the ability of UK firms to work with or handle EU data.
The EU has a specific approach to the movement and storage of data. This approach is not shared by others, such as the United States.
A UK seeking to hew closer to the US line may risk the ability of UK firms to work with or handle EU data.
12/ Mitigation Measures and Subsidies
Unless something radically changes, businesses are likely to know the government is planning on subsidizing some of those impacted by No-Deal but lack details on whom and how.
To date we have mostly conflicting reports on schemes.
Unless something radically changes, businesses are likely to know the government is planning on subsidizing some of those impacted by No-Deal but lack details on whom and how.
To date we have mostly conflicting reports on schemes.
13/ Northern Ireland
As I've written about before, the government's existing plan to just ignore the border is at best a short term fix, and at the least the RoI will likely have to build their side of the border.
Businesses will have no idea when and how that will all work.
As I've written about before, the government's existing plan to just ignore the border is at best a short term fix, and at the least the RoI will likely have to build their side of the border.
Businesses will have no idea when and how that will all work.
14/ Areas of Cooperation
The UK and the EU27 cooperate on literally hundreds of programs and joint initiatives. These have impacts for business and their status after No-Deal will take time to clarify.
For some, the UK will launch UK only alternatives. But which and when?
The UK and the EU27 cooperate on literally hundreds of programs and joint initiatives. These have impacts for business and their status after No-Deal will take time to clarify.
For some, the UK will launch UK only alternatives. But which and when?
15/ The best way to describe the "certainty" provided by No-Deal is that it provides clarity on the fact that lots and lots of largely uncertain but mostly bad things aren't going to be avoided or postponed.
How comforting business will find that knowledge is dubious. /end
How comforting business will find that knowledge is dubious. /end
16/ I lied I'm not done. Mwahaha.
A huge source of uncertainty for business will be how other businesses will respond to all this.
Will their suppliers be adequately prepared?
Will their freight forwarder get their paperwork right?
Will their shipment even make it?
A huge source of uncertainty for business will be how other businesses will respond to all this.
Will their suppliers be adequately prepared?
Will their freight forwarder get their paperwork right?
Will their shipment even make it?
17/ What about orders?
A bunch of firms are already reporting cancelled orders from Europe for Q4 2019.
Are those coming back? Is it a temporary cautious backing away because of uncertainty, or a more permanent shift away from UK suppliers?
A bunch of firms are already reporting cancelled orders from Europe for Q4 2019.
Are those coming back? Is it a temporary cautious backing away because of uncertainty, or a more permanent shift away from UK suppliers?
18/ Please note, most of what I'm describing is 100% true even if you assume Project Fear was completely wrong about Weeks 1-3 of No-Deal.
Everything more or less works as intended, no huge shocks, no panic, no shortages, no 40 mile queues on the M1.
That's an assumption.
Everything more or less works as intended, no huge shocks, no panic, no shortages, no 40 mile queues on the M1.
That's an assumption.
19/ Business might share that positive view, but likely they'll be a little nervous.
Even in a best case scenario, business will likely spend the first month of No-Deal waiting for the other shoe to drop as supplies of something critical run out or unforeseen problems occur.
Even in a best case scenario, business will likely spend the first month of No-Deal waiting for the other shoe to drop as supplies of something critical run out or unforeseen problems occur.
20/ A Transition Period won't alleviate all the uncertainties above, but it does provide a lot more time after the UK has left the EU for governments to reach agreements, put in place procedures and for businesses to prepare.
Stopping here because this is Twitter, not Tumblr.
Stopping here because this is Twitter, not Tumblr.
