Britain has begun publishing its guidance for a no-deal Brexit. Namely, the possible circumstance in which Britain withdraws from the European Union on March 29, 2019 without a framework deal with the E.U. for future relations.
And it’s clear the British government has been planning extensively for months now about just what a no-deal Brexit might mean. In a series of documents released on Thursday, the government explained how a no-deal Brexit would likely lead to financial fees for U.K.-European Union financial transactions, increased customs compliance costs, and a number of other challenges. Yet, the government also notes that it has stockpiled medicines to avoid any critical challenges.
The preparation is well-deserved. A no-deal Brexit is regarded as the worst possible outcome because it would mean a dramatic split in trading agreements, questions over movement of peoples, and shared European continental cooperation on issues ranging from tourism to security.
Yet, although negotiations between the U.K. and the E.U. are presently deadlocked, there are signs that a deal may be reached prior to the Brexit date of March 29, 2019. For one, the E.U. has a vested interest in a deal because of its trade surplus with Britain. You can only bully your customers so much.
Second, improved U.S.-European relations may also now allow President Trump to nudge the E.U. to reach a deal with Prime Minister Theresa May. After all, the recent visit of European Commission President Jean Claude Juncker to the White House is regarded by European officials as a striking success. The Europeans were shocked by Trump’s amenability to a consensus-based trade deal, and the president’s warm words for Juncker. In the context of existing tensions on issues such as business dealings with Iran and NATO defense spending, E.U. leaders are keen to curry Trump’s favor wherever possible. He supports Brexit and wants a good deal for Britain, so this is a good and relatively painless opportunity to push the E.U. in that direction.
Still, the documents released today do indicate that Brexit may have some short- to medium-term growing pains. Fortunately, Britain seems increasingly ready.
