As UK’s Prime Minister’s, Theresa May, deal for Brexit was rejected by 230 votes, major businesses in Britain seem to be in loss and beyond warned as a no-deal Brexit seems closer. According to Reuters, businesses are afraid of crucial job losses and mayhem at ports whether the country does not see eye to eye with a European Union withdrawal.
Specifically, as Brexit is coming closer, the possibility of a no-deal scenario leaves the tariff-free trade unprotected. Although a Brexit agreement would have safe-guarded cross-border supply chains, Mrs May’s rejection seems to be leaving Britain at risk, on leaving on May 29 without a safe framework.
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Many are the times businesses that have warned the UK government of the consequences of a no-deal Brexit, from Channel Tunnel operator Eurotunnel to Scottish whisky distillers.
Freight and logistics firms predict a border mayhem to follow. Therefore, Jens Bjorn Andersen, head of Danish freight company DSV, supported that customs checks on every truck crossing the English Channel could lead to 80 mile (130 km) tailbacks.
Dover handles 17 % of the UK’s goods trade, with up to 10,000 trucks a day passing through with everything from food to medicines.
Logistics giant Deutsche Post addressed that it had opened an office in the English port of Southampton and had 450 customs specialists advising clients in case of problems at Dover.
Deutsche Post stated that
We are relying on a decision by the United Kingdom.
Furthermore, Germany’s chemical and pharmaceutical industry association (VCI) called for interim solutions, in particular to ensure the supply of medicines.
VCI Managing Director Utz Tillmann, addressed that a disorderly Brexit would create such a complex situation that it is impossible for companies to prepare for all eventualities.
Last but not least, LTO Nederland, representing Dutch farmers and agricultural producers who export goods worth more than 8 billion euros ($9 billion) a year, stated unhindered trade was crucial and called on the Dutch government to offer practical solutions.
Its members were under discussion with customers and partners how best to prepare and ‘spread the pain over the chain’.
In addition, Bob Shanks, US carmaker chief financial officer, stated that the US urges the British Government and parliament to cooperate, to prevent the possibility of UK exiting EU without a deal. Yet, he continued that the US are aware that the situation is highly uncertain, after the voting results.
According to Reuters, Volkswagen, in an emailed response addressed that its UK business has made additional provision for the stocking of new vehicles at and close to its import centers and has also made increased provision for the stocking of parts.
Moreover, Mrs May has to talk with senior parliaments to look for a compromise to save the country of avoiding the no-deal scenario or to consider another referendum on EU membership.
Yet, a disorderly Brexit would place Britain into a period of economic decrease for minimum two years and a lop a half percentage point off economic output for the rest of the EU, Deutsche Bank Chief Executive Christian Sewing noted.
In fear of a no-deal Brexit, Andrew Jackson, head of fixed income at fund manager Hermes Investment Management highlighted that
The reason a no-deal Brexit is so scary is because tariffs on everything are highly punitive under WTO rules.
John Allan, president of the Confederation of British Industry and chairman of supermarket group Tesco, quoted in BBC Radio that those thinking they could renegotiate EU trade relations from scratch were living in ‘cloud cuckoo land’.
On the matter of Brexit, also commented Swissport Group, saying that a disorderly Brexit could further tighten Britain’s labor market, which has already seen less EU candidates entering since the 2016 referendum, with a workforce shortage driving up labor costs in some parts by as much as 10 percent.