Brexit BOOM: No deal with EU could trigger immediate bonus with lower prices for Britons

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Trade talks between the UK and EU began in March, with the hope of agreeing a comprehensive Free Trade Agreement (FTA) before the end of the transition period on December 31 – a deadline Boris Johnson refused to extend. But after seven rounds of official negotiations – led by Britain’s David Frost and Brussels counterpart Michel Barnier – progress has stalled, increasing fears no trade agreement will be in place from January 1, 2021. Ahead of the start of the eighth round of official talks in London next week, Mr Barnier set a strict deadline of October 31 for a deal to be agreed so it has time to be ratified in the European Parliament before the transition period deadline at the end of the year.

But he has continued to warn that stubbornness from the UK on a series of red lines, including fisheries, state aid and the EU’s level playing field, is increasing the prospect of a no-deal Brexit.

Patrick Sullivan, chief executive of the Westminster-based think tank Parliament Street, believes the EU will make the first significant move in upcoming trade talks as it desperately attempts to prop up the struggling Eurozone economy.

The Eurozone’s rebound from its deepest economic downturn on record ground to a sudden halt in August – in the April to June quarter, the bloc’s economy plummeted 12.1 percent as coronavirus lockdowns led to businesses being shut and people staying home.

IHS Markit’s final Composite Purchasing Managers’ Index (PMI), seen as a good gauge of economic health, sank to a score of 51.9 last month from July’s 54.9.

Mr Sullivan told “The EU will blink first because if Europe has any hope of getting its economy back on track, investment is paramount which is where the City of London comes in.

“Only through access to London’s financial expertise can Eurozone economies become more resilient.”

“A Brexit deal is more important to the EU. Removing these barriers while still selling to the EU across even small tariffs, as is done by the rest of the world, could usher a new era of lower prices and increased competition in the UK.

“It comes down to this, regardless of the Britain’s future relationship with the EU, it is hard not to see a future without the UK thriving economically.”

He added: “As the clock ticks down, no-deal Brexit does become more likely.

“If this does happen, the first thing the UK should do from January 1, 2021 is to remove all of the tariffs on goods produced to any scale outside of the UK.

“This would lead to an immediate post-Brexit bonus to consumers.”

But Best for Britain, which launched in April 2017 to stop Brexit and continue the UK’s membership of the EU, has warned a no-deal Brexit will have a massive negative impact on the EU and Britain.

The group’s chief executive Naomi Smith believes without a comprehensive FTA, trade will be held back by red tape, as well as the probability of delays at the borders and surging tariffs that will leave UK consumers struggling with price increases.

She said: “UK-EU trade will continue, whatever happens, and walking away would simply push our existing issues into next year and beyond.

“However, without a comprehensive Free Trade Agreement, that trade will be unnecessarily constricted by red tape, border delays and tariffs which will drive up the costs of both goods and basic foodstuffs for British consumers.

Ms Smith continued: “The EU is the UK’s largest trading partner. In 2019, UK exports to the EU were £300billion (43 percent of all UK exports). UK imports from the EU were £372billion (51 percent of all UK imports) and so a trade deal is essential from a UK standpoint.

“However, the EU is concerned at Britain undercutting its level playing field rules, and becoming the principal EU competitor, on Europe’s doorstep, so it’s fair to say a deal is essential for the EU too.

“We need to get away from zero-sum politics, and to accept that deals benefit everyone – the pie itself gets bigger.”

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