If Britain left the EU with no deal, airlines would no longer be able to fly between the two without some new agreement. This prospect is so dire that most EU diplomats believe an agreement on air travel would be made either before the fact or very quickly afterwards. Such an agreement, though, might easily see British carriers forbidden from flying between destinations within the EU 27, and EU airlines refused access to internal routes in Britain.
And neither British airlines nor European ones would necessarily be able to fly from Britain to America: the open-skies agreement between America and the EU would cover neither post-Brexit British companies nor European airlines flying to America from a non- E u country. And what of the people who come into Britain by plane, or ship, or tunnel? One of the strengths of the proposed deal is that it gives clear rights to British citizens in the EU 27 and their continental and Irish counterparts in Britain.
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Britons in EU countries get similar rights, so long as they arrive before The greatest worry in the medium term is that the rights that ex-pats in Britain and the rest of the E U would enjoy under the deal would be whittled away. France says that, legally speaking, all Britons living there after a no-deal Brexit would need work permits, and that employers with Britons lacking such permits on the payroll would be criminally liable.
Its draft law covering a no-deal Brexit recalls the legal requirement for retirees and others to apply for long-stay visas. Different countries would probably take different approaches, making it monumentally confusing for multinational employers.
If EU governments introduce obstacles for Britons wanting to visit, live or work there, the British government would face pressure to trim further the rights of EU nationals in Britain. If this cut Britain off from trained workers, the country would run into trouble.
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From road haulage to universities, many British enterprises depend on foreign nationals. Ian Cumming, who is in charge of medical training in England, estimates that it would take 10 to 12 years to become self-sufficient in training medical staff. And what staff there are may face a larger caseload. There are , Britons living in the EU who get the same access to health care as locals thanks to agreements a no-deal Brexit could end. Some, poor and elderly, would move back to Britain rather than pay for new insurance.
Goodwill could forestall some of those issues; but there are some areas where it is helpless without legal instruments. Co-operation on policing and security in Europe depends on a legal framework that will not apply in a no-deal world. Britain requested arrests in other EU countries, while receiving 16, requests coming the other way. Falling out of the warrant system would not only make it harder for Britain to seek criminals overseas—it would make it harder for Europe to get its hands on those in Britain.
Obviously, not all the damage of a no-deal Brexit would be done to Britain. If Britain leaves the EU without any deal, both EU and WTO rules would require the enforcement of a hard border between the Republic of Ireland and the six counties of Northern Ireland, with associated checks and controls. Devotees of Brexit come-what-may note that the British and Irish governments have made commitments not to enforce the border. They suggest seeking a waiver from WTO rules in the matter. But this is not convincing other than in the very short term. After a no-deal Brexit, Ireland and Northern Ireland would be in different customs, regulatory and food-safety regimes.
The European Commission has said that health and food-safety checks would have to be applied to all farm trade. There may be scope for operating some of these controls away from the border itself, but the risk of smuggling and organised crime in a place with a long history of both would be great. Brussels is clear that it could not allow a long-term hole in its external border to be created by a failure to apply physical customs and regulatory controls.
The practical implications worry businesses in Northern Ireland. And this only begins to touch on the longer-term problems. British scientific research is intimately tied up with that of its European counterparts; without ways to continue those ties, both will suffer. What will markets make of such woes? The big short-term effect would be the fall in the pound—bond markets and stockmarkets may at first do fine.
Government bonds are a safe-haven asset for traders, and are in constant demand from pension funds. It is also possible that cheap sterling might spur on exporters. British exporters compete on quality and customer service not only price. But shrinking real wages, a bitter pill for Britons already paid less in real terms than they were a decade ago, are likely to damage overall economic growth pretty quickly. If recession loomed, as it is easy to imagine it would if five percentage points of growth are sacrificed in just a few years, the Bank of England might cut interest rates, as it did to steady nerves after the referendum.
But rates are already near an all-time low of 0. The government might have a nice nest-egg with which to boost public spending.
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It is inconceivable that Britain would pay all of that out in the case of a no-deal Brexit. It is at the same time likely that the EU would pursue some of what is not paid through an international court. None of this stills the come-what-may-ers.
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But worries about the consequence of a no-deal Brexit are rising in the cabinet, especially among ministers in charge of departments that will be at the sharp end. It is notable that Michael Gove, a leader of the Leavers, is in his current role as farming and environment secretary sticking with the prime minister, Theresa May, and the deal that his erstwhile comrades excoriate.
His department has been given extensive briefings on the cost of no deal in terms of supermarket prices and food shortages. The public, though, has not benefited from such briefings, which are said to have included the national nightmare of a Mars Bar shortage. Polls show a majority currently favours remaining; but among the hefty number still in favour of Leave, a no-deal Brexit is more popular than the draft deal on the table.
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Wanting a trade deal and securing one are not the same thing, as Fox has found out in the last two years of chasing down the 69 nations that have deals with the EU which the UK needs to replicate. Fox explains that one problem for his department is the attitude of foreign governments to human rights. He says a group of unnamed countries would prefer not to sign a deal that includes basic rights.
Is this an excuse for a failed project — one always destined to fall foul of complex horse-trading? How can we tell? But what is clear is the battle Britain faces trying to forge new trading relationships. It is another element of the Brexit fallacy — which of course is also the Lexit fallacy — that Britain on its own can secure more beneficial arrangements with foreign governments than the EU has. Outside the EU, striking trade deals with unsavoury governments will be a fact of life, just as it is for the EU. Except that the EU has the clout to insist on human rights being part of any agreement, just as it insists on high environmental standards and a commitment to the Paris climate accords.
It also demands governments continue to set their own regulations without being dissuaded by any multinationals that claim the changes would harm their profits. This last element of any trade deal is covered by the investor-state dispute settlement ISDS system, which acts as a form of arbitration but in the recent past has provided a platform for tobacco companies to sue developing-world nations that ban, tax or restrict access to cigarettes.