The scope of ‘No Deal’ cannot currently be known. It covers a range of possibilities from no on-going relationship (including an immediate cessation of cross border transactions and transit) to a collection of sector/ topic based interim measures to preserve a form of status quo. 

Consequently ‘No Deal’ is not a single outcome. It may take different forms over time. Over time, UK Government may be able to introduce bespoke solutions favourable to its economy/society (although this is unlikely to be practicable in the immediate term).

Planning for ‘No Deal' is therefore difficult and businesses may need to take a flexible approach. For some businesses this may import substantial risk to ongoing operations in the short term. In the medium term it may provide opportunities for certain sectors.

In the context of ‘No Deal’, it is worth noting:

  • No country has ever left a major trading bloc in this way so there is no precedent and considerable uncertainty in numerous dimensions.
  • EU has set out its formal legal position in Notices to Stakeholders covering a wide range of topics and sectors. These provide for the end of existing relationships and participation in relevant committees on Brexit. 
  • UK Government has issued a similar set of documents. These highlight a wide range of immediate discontinuities arising from No Deal.
  • Third party countries are likely to want to understand long term trading relationship between UK and EU before undertaking serious negotiations with the UK. Once such relationships are known it may be possible for the UK to negotiate bespoke deals with trading partners.
  • EU has issued details of limited No Deal interim measures. EU’s approach to No Deal is likely to be to preserve its own advantage, and limit damage to EU where possible with limited regard to the impact on UK. Such discussions will be conducted in the context of a significant loss of trust.
  • Finding stop gap solutions with the EU is likely to be challenging and time consuming. The solutions are likely to be sub-optimal at least in the short term. In the longer term more solutions (including technologically based solutions) may become available.
  • There is likely to be considerable business and public pressure on government to address the expected range of unwelcome and potentially serious consequences of No Deal in the short term. This may add to political instability until a status quo can be established.

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