BREXIT: Business Must Prepare For Brexit Consequences -Barnier: MNI

–UK Will Be Out Of The Single Market, Customs Union
–Business Must Envisage Possibility Of ‘No Deal’

BRUSSELS (MNI) – Both European Union and UK businesses need to actively prepare for Brexit, including the possibility of no deal, EU Brexit chief negotiator told EU representatives on Thursday morning.

“Business should assess, with lucidity, the negative consequences of the UK’s choice on trade and investment. And prepare to manage them,” he said. “There will be no business as usual,” he stressed.

Addressing the European Economic and Social Committee, a EU consultative body representing employers and labour unions, Michel Barnier stressed though that the EU was looking to reach a deal with the UK.

During his speech, he stressed that “whatever the outcome of the negotiations will be,” the situation will be different on the the 30th of March 2019, when UK becomes a third country “which cannot have the same facilities or the same rights as a Member State”.

That concretely means that UK business will loose immediate access to the EU single market and will be out of the custom union.

Remaining in the single market or in the custom union as a third country is impossible, according to Barnier, given the various red lines put forward by the UK — including the end of free movement for EU citizens; full autonomy over UK law and free trade agreements; and no oversight of the EU Court of Justice. “There can be no sector by sector participation in the single market”, as Barnier put it.

No deal, which is a possible outcome to the negotiations, even as Barnier aims for an agreement, would be worse, as it would mean a return to World Trade Organisation rules for EU-UK trade.

That means “customs duties of almost 10% on vehicle imports, an average of 19% for alcoholic beverages, and an average of 12% on lamb and fish, for which the vast majority of British exports go to the EU,” according to Barnier.

Barnier insisted that he wants an agreement, but stressed that goods and trade issues will be dealt in a later stage of the negotiations, as he first want to make progress on the most urgent issues: “citizens’ rights, the financial settlement and the border issue, especially the Irish border”.

“Once we have a clearer picture of the form this new relationship will take, we will be able to discuss the possibility of transitional measures,” said Barnier.

“March 2019 is 20 months away. Time flies”, he concluded.

THURSDAY, JULY 6, 2017 – 04:31

–MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

Source: MNI

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