Final push for Brexit trade deal — what happens if we leave without it

The transition period, which started after the UK’s exit from the European Union (EU) in January, ends on December 31st. After this deadline, any trade agreements between the UK and the EU will come to an end. However, the UK has not secured a deal yet. The negotiations on a potential trade deal are continuing, with time for an agreement rapidly running out.

Earlier last week, Prime Minister Boris Johnson and President of the European Union (EU) Commission Ursula von der Leyen made some important statements regarding the Brexit negotiations. In their joint statement, they said that while “progress has been achieved in many areas… significant differences remain on three critical issues: level playing field, governance and fisheries”. Then, Johnson and von der Leyen met in Brussel on Wednesday 9th in a bid to solve these differences. However, it looks like the meeting was not as progressive as both sides hoped it to be. Following their meeting, the Prime Minister said there is a “strong possibility” the UK will not reach a post-Brexit trade agreement with the EU.

While the future trading relationship is yet to be concluded, let’s take a look at what would happen if the UK leaves without a deal.


If a deal is not reached by the deadline, the rules of the World Trade Organization (WTO) will apply by default. Every WTO member has a list of tariffs and quotas that they apply to other countries. The UK would have to apply its Global Tariff Schedule to imports from the EU, and the EU would apply its Common External Tariff (non-member tariffs) on UK goods entering the EU. This additional cost of tariffs would inevitably lead manufactures and retailers to increase their sale prices, resulting in customers paying more for their shopping baskets.

Border checks

UK goods entering the EU will be subject to full custom checks, including customs declarations, animal product health paperwork and some border checks. The paperwork will be required regardless of reaching a deal, this means UK businesses will have to spend extra money on form-filling in any scenario. However, the amount of paperwork required may be limited if a deal is secured, saving businesses some hassle.

The UK has been moving goods across EU freely for almost 50 years, and therefore it will take a while for UK exporters to get accustomed to these additional checks. This is expected to result in massive border queues and persistent delays due to not adequately preparing goods for exportation.

State aid

The UK will no longer be bound by EU state aid rules, meaning it no longer will need permission from the European Commission to make interventions to support companies. However, that does not mean the UK will be free to provide any type of aid to national companies and distort competition. As indicated above, the WTO rules will apply in case of a no-deal Brexit and the WTO limits unfair state aid and some unfair competition practices. These rules are looser than EU state aid rules and apply only to goods.

Dispute Settlement

Any trading disputes will be subject to the WTO rules and the Withdrawal Agreement. The Dispute Settlement System of WTO is among the most successful state-to-state international courts and provides a neutral and authoritative platform for solving disputes. The two sides also have the option to negotiate and bilaterally agree on a settlement process.

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