Yesterday, senior EU negotiators warned that “the chances of Britain crashing out of the EU without a new (trade) deal were now “over 50%””. Clearly, therefore, the UK’s preparations are not going well.
Instead of building trust, the UK’s Brexit Secretary, David Davis, seems to think that threats – such as promising “
the row of the summer” – are the best way to open discussions.
I have taken part in major trade and contract negotiations around the world. Based on this experience, I believe his strategy is very unlikely to succeed. It risks instead leading to a populist-style “Battle with Brussels”, which the UK will lose. The UK will then crash out of the EU – with no deal on trade – long before the March 2019 deadline.
PREMIER MAY IS IGNORING HER OWN WARNING LAST YEAR
My key concern is that premier Theresa May seems to be ignoring her own warning before last June’s referendum:
“The EU is a single market of more than 500m people, representing an economy of almost £11tn ($14bn) and a quarter of the world’s GDP. 44% of our goods and services exports go to the EU, compared to 5% to India and China. We have a trade surplus in services with the rest of the EU of £17bn. And the trading relationship is more inter-related than even these figures suggest. Our exporters rely on inputs from EU companies more than firms from anywhere else: 9% of the ‘value added’ of UK exports comes from inputs from within the EU, compared to 2.7% from the United States and 1.3% from China….“(my emphasis)
I am not alone in my fears. UK industry is becoming very worried about what may happen. Paul Drechsler, President of the Confederation of British Industry (CBI), spelt out the key issue last week – the need to maintain access to the Single Market and the Customs Union. He described the journey of a computer chip made today in Cardiff’s tech hub: