Deal or no deal, the UK will be out of the EU’s customs union and single market in just over three months, on January 1, 2021.
Michael Gove warned today, in a worse-case scenario, of two day long queues of 7000 lorries in Kent. The UK Government also plans to somehow control lorries coming into Kent at all if they lack the right paperwork.
Gove has infuriated business by suggesting such disruptive queues would be businesses’ fault for not preparing adequately to grab the "new opportunities" Brexit apparently offers.
Brexit, of course, was always going to impact substantially on borders and international trade – though new opportunities look sparse compared to the expected economic damage.
Introducing a hard border between the UK and its biggest trading partner will create disruption and economic costs – two to three times the economic costs of Covid-19 according to a new LSE report.
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Even if the UK had chosen a "softer" Brexit route, there would have been costly border frictions.
Outside the EU, there’s no escape from customs and/or regulatory checks – as a cursory look at the EU-Turkey or EU-Norway borders shows (even though Turkey is in a customs union with the EU and Norway in its single market).
But Boris Johnson is taking the UK to a much less integrated relationship with the EU than either Turkey or Norway. There may still be a basic free trade deal this autumn, if Johnson backs down from his crazed threats to break the EU-UK Withdrawal Agreement. Otherwise, there will be no deal and chaotic disruption.
The biggest problem is how much information and guidance is still missing. How late we are in the process.
A basic deal would ensure an absence of tariffs on most or even all goods. That could speed up those Kent lorry queues quite a bit. But a whole range of other customs checks will remain, not least so-called "rules of origin" provisions to ensure goods coming from other countries, such as China, do not send exports via the UK to avoid paying tariffs.
There will also be regulatory checks and certification rules to ensure UK goods meet EU technical and health and safety requirements. It’s a huge challenge for both government and business.
Dr Anna Jerzewska, Geneva-based director of consultancy Trade and Borders, says: “The biggest problem is how much information and guidance is still missing. How late we are in the process.
"In order for the border to be ready for January 1 so many different groups of people need to be ready: various government departments, traders, hauliers, customs agents, brokers, ports."
More government guidance, she says, should be available in October and IT systems ready perhaps in November.
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This is all perilously late. And with UK brinkmanship in the talks, no one even knows if it will be a deal or no deal.
And this is not only about delays and bureaucracy in goods crossing the border, damaging though that is to cross-border supply chains and just-in-time production. It’s also about services.
Most free trade deals focus on liberalising trade in goods more than services, so the chances are, even with a deal, that the UK’s services trade with the EU (where it actually has a surplus) will be particularly badly hit.
Overall, creating a hard border between the UK and EU will reduce trade and lower growth. Even UK Government estimates have suggested that a Canada-style deal could reduce growth over 15 years by over 6% - or over 9% for a no deal Brexit.
A Brexit reckoning is coming for the UK economy. Even amidst the economic downturn from Covid-19, the disruption and damage from Brexit will be clear for all to see.
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