Brexit Secretary David Davis admits employers face a 'cliff edge' if we can't get an EU trade deal
Businesses face a damaging “cliff edge” if the Government misses its two-year deadline for striking a fresh EU trade deal, Brexit Secretary David Davis has admitted.
He agreed with Midland MP Emma Reynolds (Lab Wolverhampton North East) who said businesses would suffer if agreement could not be reached by March 2019.
Theresa May, the Prime Minister, has announced the UK will trigger Article 50 of the Lisbon Treaty, the formal mechanism for leaving the EU, by the end of March next year.
It will mark the start of formal negotiations about Brexit, and the process is meant to last within two years,
But if no new trade deal is agreed, the UK and EU could fall back on default trade rules agreed by the World Trade Organisation – which would allow trade between UK businesses and the EU to continue, but could mean that firms have to pay a tariff on exports.
Quizzing the Brexit Secretary, Ms Reynolds said: “Our European partners have so far refused to say that they will enter trade talks alongside our article 50 negotiations. What will the Government and the Secretary of State do to avoid the cliff edge in March 2019, when we leave the EU, of our falling out of the EU single market and back on World Trade Organisation rules?”
He told her that negotiations would take place, adding: “That is what we will have because, as she quite rightly says, we need to conclude them within two years to avoid any cliff edge.”
MP Emma Reynolds
Earlier this month, business leaders including the CBI and manufacturers’ body the EEF wrote an open letter to Ministers calling for barrier-free trade with Europe to be preserved.
They warned: “Falling into World Trade Organisation rules in only 29 months from now, which is the prospective timetable, would mean up to 90 per cent of goods could potentially have tariffs on them.”
Black Country MP Adrian Bailey (Lab West Bromwich West) urged the Government to ensure the car industry was protected.
He told Mr Davis: “Both Nissan and Jaguar Land Rover have made it clear that access to the single market is crucial to their future investment decisions in this country. What discussions has the Minister had with those companies to give them reassurance that access to the single market is the Government’s highest priority?”
Mr Davis said: “More important than me, the Prime Minister had a meeting with Nissan only this week, and the communiqué that came out after it was extremely positive on both sides.”