© European Union 2016 - European Parliament

25.07.2017

THE DAYS AFTER BREXIT - A SCENARIO

In spring of 2019, the United Kingdom will leave the EU. Nobody knows what will happen afterwards, but there are concerns what a hard Brexit might look like. A fictitious worst-case scenario.

By Eike Radszuhn

Jean-Claude Juncker <br>© European Union, 2017 | Photo: Mauro Bottaro

Thursday
March 28, 2019

In the end, it does not really come as a surprise. A weary Jean-Claude Juncker faces the television cameras and says out loud what has been looming on the horizon for weeks. "We tried everything, but found no solution," says the president of the European Commission flatly. In just a few hours, the United Kingdom will no longer be a member of the European Union - but discussions about a new agreement between the EU and the UK have been unsuccessful for the time being. "After the UK triggered article 50, we only had two years for negotiations," recalls Juncker. "We simply didn't have enough time."

Shortly after that, Theresa May addresses the public in front of 10 Downing Street in London. In front of the local press, the Prime Minister defiantly states: "The offers we made were fair, but it appears that some within the EU did not want to come to an agreement with us," she explains. The British people will continue to be open to an agreement, albeit with different priorities: "We can still count on our reliable economic partners in North America and in the Commonwealth." Trade with the EU, however, will only follow the minimum standards of the WTO rules as of midnight. The single market, the customs union, the joint trade agreements - they are all history for the United Kingdom.

Friday
March 29, 2019

On Friday morning, the French city of Coquelles is paralyzed. The trucks are backed up in front of the Channel tunnel, vehicles are only sporadically allowed to embark on the 50-kilometer journey to Folkstone. As of today, the United Kingdom is no longer a member of the customs union. Even though the UK and the EU are forgoing import duties for now, customs clearance must still take place when crossing the border. In the past, containers were simply waived through, but as of today and until further notice, papers are being checked and cargo hatches opened.

But neither side of the English Channel is prepared for this procedure. The makeshift customs stations are nowhere near sufficient to deal with 4,500 trucks every day. Since there are no parking spaces, the trucks have lined up all the way to the highway. The British and French governments promise to do something about this situation and plan to hire more customs officers. For the time being, however, machinery deliveries from Germany will not reach their British customers without delay. And mechanical engineering companies in Germany also have to wait for components from the United Kingdom.

Monday
April 1, 2019

The British Ministry of Justice announces new regulations for the employment of foreign laborers. For assignments of employees from EU countries, it used to be sufficient to provide proof of the employment relationship - but things will not remain this simple. If a German mechanical engineering company now plans to send a technician to England, it has to register its employee in advance - and those staying longer than eight days need a special permit. "This type of measure is common in EU countries too, so why not here?" asks Lord Chancellor Elizabeth Truss.

There are some in the UK who think that this does not go far enough. In an interview with the Daily Mail, UKIP icon Nigel Farage says:
"There is no job British workers could not do themselves." His party strongly advocates obligatory work visa that are only to be granted if the foreign company proves its need to send the worker to the UK. In Brussels, the new obstacles for EU citizens are seen as a harsh measure. The President of the European Council, Donald Tusk, speaks of a loss of trust and says that this will put a lasting strain on the political relationship to the United Kingdom.

Wednesday
April 10, 2019

Theresa May heads to the USA for a state visit. In the rose garden of the White House, the British Prime Minister and US President Donald Trump announce that the two countries are launching negotiations on the US-UK free trade agreement "Freedom Deal". At the same time, tens of thousands of people are protesting the isolation from the EU on London's Trafalgar Square. The British people no longer trust their government that the Brexit can be a success. There is a shortage of hospital staff and kindergarten employees since foreign workers had to leave the country. Every day, more and more European companies announce their intention to curb their investments in the UK.

And if that wasn't enough, technological barriers threaten trade between the United Kingdom and the mainland. In line with the "Great Repeal Act", all EU legislation was provisionally turned into national legislation after the Brexit, and the guidelines for machinery and ecodesign still apply in the United Kingdom for the time being. However, an increasing number of American companies are pushing for the right to import products into the country that do not comply with EU standards. In the United Kingdom, this is all considered negotiable - after all, the agreement with the USA is desperately needed.

As part of this development, the British Health and Safety Executive promotes a dedicated product label, meaning that machines from foreign countries would be subject to third-party certification. Prime Minister May expresses sympathy for this idea: "Nobody forces us to hold on to old EU red tape," says May. "We are finally free."

 

Interview with Ulrich Ackermann, Head of VDMA Foreign Trade

 

Ulrich Ackermann © VDMAHow realistic is the Brexit scenario described above?

The scenario is the worst case, which would present the United Kingdom and the EU with major problems.

What do we know about what the Brexit will entail?

The exit negotiations are scheduled to take place from June 2017 to October 2018, so that the member states can ratify the contract until the spring of 2019. The ideal process for the exit negotiations would involve a simple free trade agreement as well as a clear definition of conditions for the negotiations on special topics.

How does VDMA contribute to this debate?

VDMA President Carl Martin Welcker has repeatedly stressed that the EU and the single market need to be protected. VDMA has explained this position in discussion with German Federal Ministries and the EU Commission. In addition, we are currently in the process of drafting a position paper on the potential ramifications of Brexit and possible solutions.

Further Information

VDMA European Office   |   VDMA Foreign Trade   |   VDMAimpulse 04-2017: "Brexit - an accident continuing to happen"   |   VDMAimpulse 04-2017: "Do we need more European integration or less?"   |   VDMAimpulse 02-2017: "The future of europe: Five options, no alternative" 

© VDMA
Contact
Eike Radszuhn, VDMA European Office.