The government’s own modelling suggests the hit to GDP after 15 years would be almost 8% with no deal, against less than 5% for a thin Canadian-style one.
A Leader article in The Economist says the food industry would suffer from EU protectionism, with farmers facing tariffs of 40% or more on lamb and beef exports. Research by UK in a Changing Europe, an academic think-tank, suggests that food prices would rise by as much as 4%.
It says the only big obstacles to an agreement are fish and the EU’s desire for a credible regime to police state aid to industry.
Fisheries contribute barely 0.2% of European GDP and both sides would suffer from there being no deal. European vessels would lose access to richer British waters; British fishermen would lose tariff-free access to the EU market, which buys 70% of their catch. The French are insisting that the EU’s over-generous quotas should persist after Britain leaves.
If the UK does not reach a trade agreement with the EU by the end of the year, that does not rule out the possibility of one in the future.
All of the problems it would generate, it has been said, would focus minds on reaching an agreement as soon as possible.
However, some on both sides believe that in this case, talks would not continue for some months into 2021.
- Brexit no deal could severely disrupt agrifood
- Can the UK and the EU reach a deal on Northern Ireland?
- Ireland to support food firms in no-deal