Brexit - Hard Brexit the Reality



=Hard Brexit - the Reality=

Is a no deal better than a bad deal?
It has often been said by Theresa May that no deal is better than a bad deal. As we stand now we'll be either accepting a bad deal or no deal whatsoever. A good deal is no longer on the table. The government, having spent the greatest part of the negotiation period arguing amongst themselves, are now at a point where they will have to accept the terms laid down by the EU. To negotiate one of the most complex processes in the history of the UK and not have a plan before starting the project is beyond irresponsible. It borders on the insane. Whether you are a remainer or a leaver there is no way that the handling of the process can please you. In the section Triggering Article 50 the starting point for even a medium sized project is detailed. This would a medium sized project where the delivery time was, like Brexit, two years. The timescale for delivering a good Brexit of 2 years was always ambitous (hence the transition period) and it was imperative that prior to submitting article 50 that we had all deliverables understood and lined up, with as much prior preparation carried out as possible as well as a plan for every minute detail of the 2 year leaving period once A50 had been submitted.

This section looks at what is on the table at the moment and details of what these two remaining outcomes mean for the UK, as well as giving further insight into what it means when the government talks about "WTO Terms".

The sections have been prepared with the use of the videos "3 Blokes in the Pub - Talk NO DEAL Brexit"

No Deal
This is crashing out at 11pm 29 March 2019. This is where we will stand at that point:

WTO Tariff Schedule

 * The World Trade Organisation (WTO) has 164 member countries
 * Tariff schedule agreed between all members lays out what the tariffs will be for all goods traded between members of WTO
 * The tariff schedule has 4500 product groups
 * Within each product group their are many products. For example in the steel product grouping there are 3200 different types of steel plate
 * Each product within the product groups has its own schedule of tariffs to be charged under WTO terms
 * The UK as part of the EU is within the Commons Custom Tariffs (CCT)
 * The EU looks at all products made within its borders and sets the tariff under CCT to place high tariffs on goods it makes and low tariffs on goods it needs to import into the union
 * Items that we cannot make or grow within the UK, but are made or grown in the EU, as part of the EU we have tariff free trading. For example vegetables and fruit that we buy from Spain, which we can't grow in the necessary volumes in the UK.
 * The UK will need to go through all 4500 product groups (and products within those groups) and decide what tariffs to charge on what products
 * This is a highly complex process because the UK will need to balance off the issue that we need to import some products while we also produce the product domestically. Getting the balance right to ensure the domestic production survives and we can still import the additional product needed to meet our needs will take years of negotiation with supply countries.
 * The sheer number of products will mean that this process will take years
 * We cannot simply copy the CCT into our tariff regime as we no longer are part of the EU and so cannot measure in the tariff free supply we presently benefit from
 * This also means we will lose trade agreements with 60 other countries as well as the EU, as our trade is carried out with these countries under EU agreements. With no tariff schedule, no way of measuring or collecting tariffs this will mean that we will not be able to trade with 87 countries that we do 90% for our export business with
 * As the UK will have no trade agreements with countries and will have no Common Custom Tariff (CCT) agreement with the WTO we will be termed as having "third country status" with the WTO
 * Third country status means that tariffs will be charged at the highest rate until a trade agreement is in place
 * UK trade agreements will be put in place during the transition period. No deal means no transition period. Effectively upon leaving the EU, UK goods will cost 20 to 30 percent more to importing countries than they do today
 * This would be a no win situation for the UK as we would need to set our tariffs as low as possible to continue receiving goods, but we couldn't apply that to a just the EU. Under EU rules we would have to apply the same level tariff to all WTO member countries
 * We are protected from for example the EU using its internal zero tariff regime to damage the UK market by the CCT agreement. This would no longer be the case
 * Othe WTO member countries could not offer us zero percentage tariffs as this would mean they would have to offer it to all other WTO member countries, destroying their own internal markets

Bad Deal Brexit

 * Quotas breakdown is 1/28
 * Once we have our quotas agreed we have to send it to the WTO and all 164 members of the WTO have to agree it