Brexit secretary David Davis says UK must prepare for chance of no deal with the EU
Brexit secretary David Davis has told cabinet ministers to prepare for the possibility of the UK not reaching a deal with the EU after leaving the EU.
Davis described the UK leaving the EU without a trade deal as an “unlikely scenario” but warned the UK must prepare for the failure to negotiate a deal, the Prime Minister’s spokesman said, according to Reuters.
Davis reportedly emphasised the need for a “smooth exit” from the EU to other members of the Cabinet, while describing the meeting as the UK’s “most important peacetime operation.”
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If the UK fails to negotiate a deal within the tight two-year time frame offered by Article 50 of the Lisbon Treaty the trade relationship with the EU will default to the terms stipulated by the World Trade Organization (WTO).
Trade experts warn a move to WTO rules will likely be chaotic if the government is not well prepared. For instance, there is currently significant uncertainty for businesses looking to trade abroad on how the customs union will work in such circumstances.
To avoid WTO terms the UK will have to negotiate a wide-ranging trade deal with the EU. Estimates of the time a trade deal will take to negotiate vary, although the UK’s former ambassador to the EU, Sir Ivan Rogers, said it could take as much as a decade.
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The other option is some kind of transitional arrangement, which chancellor Philip Hammond has publicly said will be necessary to give businesses certainty.
However, Davis has previously said a transitional deal would contradict the will of the British people by delaying the final exit from the EU.