Without a bilateral agreement, the UK would be reduced to third-country status on 29 March 2019

Agreements no longer valid for the UK

The UK would need to renegotiate at least 759 treaties

  1. 295 bilateral trade treaties
  2. 202 regulatory cooperation agreements (ranging from competition policy to data sharing)
  3. 69 agreements on fisheries
  4. 65 agreements on transport (mainly aviation)
  5. 49 agreements on customs controls
  6. 45 agreements on nuclear energy
  7. 34 agreements on agriculture.

The UK would have to comply with WTO rules  to access the Single market on which it is highly dependent (44% of its exports of goods and services and 53% for its imports are with the EU).

  1. It would face quotas for some agricultural goods
  2. Customs tariffs that range from 2% for minerals and metals to 11.5% for clothing, 11.6% for fish products and even 35.9% for dairy products.
  3. Daily life in the UK would be affected, as the supply of medicines and food products depends largely on imports ( 30% of food products consumed in the UK are imported)
  4. Without regulatory alignment, exporters would also have to deal with all the complications of restored borders, such as certification and controls, which could result in additional delays and congestion at the border.
  5. Mobilising the technological and human resources to ensure border controls is in itself a challenge. The combination of these logistical problems, ancillary administrative burdens and additional costs would permanently hinder bilateral trade with the 27 Member States of the EU.

Such a hard Brexit would also have consequences for the UK’s trade with the rest of the world.

  1. When the UK leaves the EU, it will no longer be covered by the 40-some-odd free trade agreements signed by the EU. In other words, their trade policy would restart from a blank slate.
  2. Restricted access to the Single Market would reduce the attractiveness of the UK to third countries and the level of foreign direct investment could fall even more sharply.

Economic Impact

  1. The cost of such a scenario would vary across economic sectors. The shock would be much greater for the UK than for the EU-27, since the UK is more dependent on access to the Single Market than the EU-27 are on market access to the UK. In 19 Member States, trade exposed to Brexit is less than 2% of GDP, and in 12 of them it is even less than 1%. 
  2. Over ten years, the UK’s GDP could fall by 4.9% compared to only 0.7% for the EU. The UK government’s own estimates imply a loss of 8% of GDP for the country over a 15-year period.

While the magnitude of macroeconomic effects from a No Deal scenario are quite clear, the list of other problems that arise continues to grow. The re-establishment of a border between Northern Ireland and the Republic of Ireland could restart the bloody conflict that ended with the 1998 Good Friday Agreement.





Add new comment