LONDON (AP) – The president of one of Britain’s biggest business lobby groups is to warn of the economic damage the country would suffer if it leaves the European Union without securing a wide-ranging trade deal with the bloc.
In prepared remarks for a speech due later Thursday, Confederation of British Industry President Paul Drechsler will say that a “‘no deal’ scenario would open a Pandora’s Box of economic consequences.”
If Britain leaves the EU without a deal, it would have to rely on so-called World Trade Organization rules – a set of tariffs that would immediately raise the cost of trade for both sides but impact Britain more as its relative dependence on EU trade is higher than the EU’s on Britain.
“Here in the U.K. and across the continent firms are worried about this ‘worst-case scenario’,” Drechsler is due to say. “Some are getting ready for it to reduce economic damage. Some won’t prepare because they’re hoping for a deal. But in reality many firms can’t prepare because the cost of change is simply too high to even consider it.”
Under WTO rules, Britain would not be able to trade with its former EU partners on terms that would be any more advantageous than other countries that do not have trade agreements with the EU, such as the United States. As a result, the EU would impose tariffs on an estimated 15,000 goods, in no uniform way: some British exports, like pharmaceuticals, would face no extra charge but the large majority would.