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Leaving the European Union without an agreement means losing preferential access to the large block market, which exposes nearly half of UK trade to higher tariffs and other costs.
A complicated divorce would also exclude Great Britain from 40 additional trade agreements concluded by the European Union with its trading partners. Transactions cover approximately 70 countries and represent 13% of UK trade.
Slow progress means that the UK's trade of up to $ 1 trillion remains exposed to potential new trade barriers.
As a result of a messy Brexit, the UK would automatically return to the World Trade Organization rules with higher tariffs.
The country could unilaterally reduce tariffs on imports of foreign products in order to prevent price increases. However, many UK exporters and service providers are likely to face new barriers in key markets.
The United Kingdom also negotiates with countries that have no trade agreements with the EU, such as the United States. Most of these factors would not be affected by a chaotic Brexit, but some trade facilitation agreements could be canceled.
British politicians could minimize the risks of a messy Brexit by accepting the exit agreement negotiated by Prime Minister Theresa May, but they have not done so yet. Britain leaves the European Union on March 29th.
David Henig, director of the UK Trade Policy Project, said that replicating existing EU trade agreements with countries such as South Korea should be a top priority for the UK government.
"These are the ones we are about to lose, where companies already have a market share," he said. "It should be the center."
Time is now an important factor: British Foreign Secretary Greg Clark recently warned that exporters in distant markets needed clarity as quickly as possible because of the time needed to ship their products to Britain.
& # 39; On the wire & # 39;
The UK government said the process of replicating EU trade agreements was relatively straightforward.
Liam Fox, Secretary of State for International Trade, reportedly said in 2017 that replacing 40 deals would be easy. He added that they would be ready "a second after the Brexit".
Switzerland accounts for around 2.5% of Britain's total trade, according to data from the UK Department of International Trade. Other transactions accounted for less than 0.3% of UK trade.
Fox acknowledged Wednesday that some agreements "will fail".
But Henig said it was unlikely Britain would be ready before the exit deadline.
"We are far from what we hoped for," he said. "I do not imagine you're going to have 35 deals done in the next six weeks."
Difficult negotiations ahead
The UK will likely face tougher trade negotiations as a single country than as a member of the world's largest unified market. The demands will be higher and the weight of the UK decreased.
"An agreement with the United Kingdom alone is worth less than an agreement with the European Union," said Peter Holmes, a trade expert who teaches economics at the University of Susbad.
Holmes said South Korea and Japan had already indicated that the UK may need to be more flexible in future negotiations, suggesting that they would require concessions on trade in exchange for 39, a new agreement.
"The Japanese in particular have suggested that their companies have come to the UK on the basis of free access to the European Union," he said. "They said very clearly that if they lost that, they would want compensation."
This could be a sign of the future for the UK. Henig said that future trading partners, for example, would show no mercy.
"Trade negotiators will negotiate, they know that the UK wants something … and they think they can get more concessions," he said.
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