Avoiding a Brexit Cliff-Edge Is British Business's Top PriorityBy
Transitional arrangement should be implemented, report says
Britain should also give guarantees to 3 million EU nationals
U.K. businesses want the government to ensure that there is no abrupt fallback on to World Trade Organization rules once the planned two years of Brexit negotiations end, according to the Institute of Directors.
The current time frame is unlikely to be enough for Britain to both sever ties with the European Union and form a new trade deal, the lobby said in a report Wednesday. A majority of businesses say the final deal is their most pertinent concern, with only 17 percent citing the length of time to secure a deal.
“The first priority must be ensuring the exit process is a smooth as possible,” said Stephen Martin, director general at the group. “The means avoiding a vacuum between the withdrawal agreement being settled and a new trade deal with the EU coming into effect.”
The “cliff-edge” scenario is also an issue for the manufacturing lobby group EEF, which said a transition period of at least five years is needed to ease uncertainty.
“What we must have is a deal that ensures our economy continues to thrive and is not sacrificed on the altar of satisfying assumed expectations in a referendum vote,” Judith Hackitt, EEF chair, will say in a speech to be delivered on Wednesday.
Prime Minister Theresa May is waiting for the Brexit bill to pass through the House of Lords before she can trigger Article 50 and start negotiations with the EU. While the U.K. wants to agree the terms of exit and new trading relations side-by-side, European officials have indicated that their preference is to do both sequentially. Should that mean a two-year period is too short to agree both, a transitional arrangement may be needed to avoid sudden implementation of tariffs.
The IoD also said that the government should guarantee that the 3 million EU nationals living in Britain will be allowed to stay and called for a “liberal” agreement on labor mobility. Forty percent of its members employ workers from the European continent.
Meanwhile, businesses should start planning for any changes to U.K.-EU trading relations, “including that we leave the EU with no deal signed,” said Allie Renison, head of EU and trade policy at the IoD.