Brexit: what would no deal on 31st December 2020 mean?

‘Brexit’ or ‘British exit’ is the word that is used to define the departure of the UK from the EU. The initial vote took place in June 2016. And this was done with 51.9% voting to leave, and 48.1% voting to remain. And now, the UK has officially left the EU and the transition period that has begun will last till 31 December 2020. During this transition period, the UK will attempt to roll over the existing trade deals between the EU and countries around the world. The UK will also negotiate the terms and trade with the EU after the transition period till December 31st of 2020.

Another important point is the during the transition period, the UK will be subject to EU law and remains as a member of the EU customs union and single market. It helps to facilitate trade between British and European businesses until a conclusion is reached. 

Though the UK and the European Union have agreed to continue talks and are trying to negotiate on a conclusion on their future relationship, major unresolved topics remain. If both the team fail to reach an agreement by 31 December 2020 would result in a no-deal Brexit.

This will result in prices to go up for goods as the UK buys and sells from and to the European Union. The spike in price could be due to the trading of the UK and EU on World Trade Organisation terms – WTO terms which are the basic rules for the countries without trade deals.

The next chance would be the tax or tariffs imposed by the EU on the goods that come from the UK. The average would be around 2.8 % on non-agricultural products and 10% for cars and even higher than 35% for dairy products. All of this will put the industries under greater pressure.

And with the UK imposing tariffs on some EU goods, the cost will go up on those products. But the things imported from the rest of the world could be lesser as the tariff is being cut. Without the agreement, the product sold by the UK could be stopped at the border. This cause the delays and exports would be at risk.

According to the supermarket chains, there would be a lesser choice of food, and fresh food will be affected. If the products are exported from other places, the cost of the food items will go up.

With more border checks, long queues for Lorries are a possibility. And for this reason, the UK is delaying to have the complete check for good arriving from the EU till 1st July 2021. But the EU lorry drivers might have to avoid the UK altogether for the worry of long delays.

Without a confirmed deal, non-UK fishing boats might lose access to UK waters. The fisherman fears that there could be confrontations if boats try to continue fishing at their regular spots. The UK fish exports to the EU would also be badly hit by tariff and delay at the check post.

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