No-Deal Brexit – What Happens to the UK and its Global Neighbors?

Source: New York Times

April 12th is quickly approaching, and with it comes the growing reality of a no-deal Brexit.[1] The effects will extend far beyond the confines of the U.K. An estimate from the Leibniz Institute for Economic Research Halle (IWH) and the Martin Luther University Halle-Witternberg in Germany predicts that 612,000 people, in 43 countries, will be impacted by a no-deal exit.[2] Even with a trade agreement, London alone can lose up 5,000 jobs.[3] The Bank of England predicts its economy will decrease by 6.3-9% in the 15 years post no-deal Brexit compared to if the U.K. remained in the E.U. [4] The Bertelsmann Foundation estimates that a no-deal Brexit will cost the U.K. approximately 57 billion euros a year and the E.U. 22 billion euros.[5]

Stark change is also inevitable in the day-to-day lives of those living in the U.K. Housing markets are predicted to drop by as much as 30%.[6] Furthermore, an already decreased food supply due to increasingly prevalent summer droughts is likely to become more diminished with the addition of custom delays.[7] As of now, only 50% of the U.K.’s food supply comes from the U.K. itself,[8] with 33% being imported from the E.U.[9] This becomes troublesome when combined with the potential tariffs as high as 22% for orange juice, 74% for tobacco[10], and up to 15% for meat and dairy on other E.U. countries.[11] Brexit means British citizens will only be allowed to travel to the E.U. for up to 90 days without a passport,[12] and U.K. companies will likely lose the option to bid on E.U. public contracts.[13]

Surrounding countries will feel the effect, as economies are expected to contract by 8% in Scotland and 9.1% in Northern Ireland.[14] Loss in income per head can be expected to be as high as 726 euros/head in Ireland, 732 euros in the U.K., 120 euros in France, and 115 euros in Germany.[15] The U.K. imported approximately 70 billion pounds worth of goods from the U.S. and close to 78 billion pounds from Germany while exporting more than 110 billion in pounds to the U.S. and close to 55 billion in pounds to Germany in 2017 alone.[16] Germany is predicted to have as many as 100,000 jobs effected by the exit, with 15,000 people in Germany currently employed in motor exports specifically targeting the U.K. alone [17] (approximately 800,000 cars/year[18]). In January 2019, France announced a 50 million euro plan to assure additional customs-hiring such that ports and airports can remain in place to assure that UK companies can continue operating in France following a no-deal Brexit.[19] The U.S. will certainly feel the effects as transactions with their fourth largest market become significantly more costly[20]and American companies lose their English-speaking port into the European economy. [21]

In the meantime, an emergency E.U. summit on April 10 determines the fate of Theresa May’s request for an exit extension until June 30, 2019.[22]

Lisa Caris is the incoming Candidacy Editor for the Denver Journal of International Law and Policy and a 2L at the University of Denver – Sturm College of Law.

[1] Kimberly Amadeo, Brexit Consequences for the U.K., the EU, and the United States (Apr. 3, 2019), https://www.thebalance.com/brexit-consequences-4062999.

[2] David Reid, A ‘No-Deal’ Brexit Could Hit 100,000 German Jobs(Feb. 18, 2019), https://www.cnbc.com/2019/02/18/a-no-deal-brexit-could-hit-100000-german-jobs-study-claims.html.

[3] Amadeo, supra note 1.

[4] Marjorie Chorlins, The Harsh Consequences of a No-Deal Brexit(Jan. 30, 2019), https://www.uschamber.com/series/above-the-fold/the-harsh-consequences-of-no-deal-brexit.

[5] Tobias Buck, No-Deal Brexit Will Hammer Both UK and EU(Mar. 21, 2019), https://www.ft.com/content/f9a5fd52-4b2a-11e9-bbc9-6917dce3dc62.

[6] Allison McCann, Milan Schreuer & Amie Tsang, Where Europe Would Be Hurt Most by a No-Deal Brexit(Feb. 7, 2019), https://www.nytimes.com/interactive/2019/02/07/world/europe/brexit-impact-on-european-union.html.

[7] Amadeo, supra note 1.

[8] BBC Visual Journalism Team, Brexit: 10 Ways You Could Be Affected (Mar. 22, 2019), https://www.bbc.com/news/uk-politics-47470864.

[9] Amadeo, supra note 1.

[10] Amadeo, supra note 1.

[11] McCann, supra note 6.

[12] Agence France-Presse, EU Approve Visa-Free Travel for Britons after “No Deal” Brexit(Apr. 3, 2019), https://www.france24.com/en/20190403-eu-approves-visa-free-travel-britons-schengen-after-no-deal-brexit.

[13] Amadeo, supra note 1.

[14] Orla Ryan, Impact of No-Deal Brexit Would Be “More Severe” and Last Longer in Northern Ireland Than Anywhere Else(Feb. 26, 2019), https://www.thejournal.ie/impact-of-no-deal-brexit-on-northern-ireland-4514836-Feb2019/.

[15] Buck, supra note 5.

[16] BBC Visual Journalism Team, supra note 8.

[17] Amadeo, supra note 1.

[18] McCann, supra note 6.

[19] Victor Mallet, French Employers Warn of No-Deal Brexit “Chaos” (Feb. 2, 2019), https://www.ft.com/content/89aae73c-2632-11e9-b329-c7e6ceb5ffdf.

[20] Amadeo, supra note 1.

[21] Amadeo, supra note 1.

[22]Peter Barnes, Brexit: What Happens Now? (Apr. 5, 2019), https://www.bbc.com/news/uk-politics-46393399.

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