Government publishes “Implications for Business and Trade of a No Deal Exit on 29 March 2019” report

Louisa Cavell

The report, published last week, summarises activity by the Government, to date, to prepare for a no deal scenario as well as providing an assessment of the implications to trade and businesses

Below, the key potential issues for the publishing industry are outlined:

- In February, Government Departments reported being on track for just under 85% of no deal projects but, within that, on track for just over two thirds of the most critical projects. Despite the acceleration of preparedness since December it has not yet brought delivery of these preparations back on track where there has been prior slippage. 
- In the event of a no deal exit, there would be a gap in the lawful free flow of personal data while a data adequacy assessment takes place. To prepare for a no deal scenario, the report recommends that UK businesses need to work with their EU partners to secure a legal basis for the continued transfer of personal data from the EEA to the UK.
- According to Government research, there is little evidence that businesses are preparing in earnest for a no deal scenario and readiness of SMEs is low.
- It refers to the HMT long term forecasts of a no deal and moving to WTO rules, which estimates that the economy would be 6.3-9% smaller in the long term than it would otherwise have been if we remained in the EU. It notes that this analysis does not take into consideration short term disruptions, which could have additional economic impact.
- Of the forty EU trade continuity agreements, (the agreements that roll over existing trade terms the UK enjoys as an EU member), only six have been signed. It warns that without a contingency in place there would be a gap in coverage for some international agreements, whose impact would depend on the nature and size of the agreement. Where negotiations are off-track the Government intends to use bridging mechanisms.
- The service sector (which makes up around 80% of UK GDP) is supported by free movement of people and a range of cross-cutting regulation such as mutual recognition of qualifications. In a no deal scenario, UK businesses would be treated as third-country service providers by the EU. The UK would risk a loss of market access and increase in non-tariff barriers. UK businesses would face barriers to establishment and service provisions in the EU which they had not previously faced, including nationality requirements, mobility, recognition of qualifications and regulatory barriers when setting up subsidiaries in EU member states.
- UK nationals would still be able to travel to the Schengen Area visa-free, for 90 days in every 180, but would not be able to undertake paid activity during this time. For UK nationals living in another EU Member State, citizens with less than five years’ residency would be subject to the rules of the Member State in which they are living, including their immigration rules.
The report concludes by saying that the short time remaining before 29 March 2019 does not allow Government to unilaterally mitigate the effects of no deal. It also warns that even where it can take unilateral action, the lack of preparation by businesses and individuals is likely to add to the disruption experienced in a no deal scenario.

Source: Advertising Association/HM Government to feed the full report
click here.


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