Paul Drechsler: WTO rules would open a Pandora’s Box

Right now, it feels like we’re just reaching the top of the Article 50 rollercoaster. Any minute now, maybe next week, maybe the week after that we’ll suddenly drop into the twists and turns of negotiations.

Wherever I go across Europe, I hear concerns about the UK leaving without a deal and falling into World Trade Organisation rules.

We should be under no illusions about what this would really mean. A ‘no deal’ scenario would open a Pandora’s Box of economic consequences.

The UK would face tariffs on 90 percent of its EU exports by value and a raft of new regulatory hurdles. Let’s remember these barriers would hurt firms on both sides of the Channel.

Here in the UK and across the continent firms are worried about this ‘worst-case scenario’. Some are getting ready for it to reduce economic damage. Some won’t prepare because they’re hoping for a deal.

But in reality many firms can’t prepare because the cost of change is simply too high to even consider it.

The Prime Minister is confident that a deal can be achieved – and we agree.

But to those whose first and only choice is for Britain to walk away without a deal, I say you’re not only wrong but irresponsible.

Imagine you’re a small cosmetics firm in Stockport and shops in France sell your products. No deal? Without an EU office it’s illegal for those French shops to sell your products. A loss for you and for them.

Imagine you’re a German tourist in Edinburgh and you use a credit card to pay for a hotel. No deal? The German bank may not be able to make that payment, disrupting business in both countries.

Or imagine you’re a chemicals company in Leeds and you have systems that track your ingredients from Poland. No deal? You’ll face delays and higher costs getting supplies. Hurting your Polish customers too.

Just as European countries benefit from a thriving UK, British business needs a strong European Union. A strong single market with which our companies can trade easily is in everyone’s interest.

Making sure firms in London – but also Berlin and Bordeaux – can get people with the right skills is in everyone’s interest.
And getting a ‘smooth Brexit’ which minimises disruption across the Continent is in everyone’s interest.

An ambitious, comprehensive deal covering every sector is what’s best for Britain, it’s what’s best for Europe and we’ll do everything we can to get it.

Whether you’re a salmon farmer in Scotland, an aerospace giant in the Midlands or a tech start-up in Cambridge Brexit will affect your business.

But negotiations will determine how much.

Paul Drechsler is president of the Confederation of British Industry. A version of this speech was first made at the Lord Mayor of London’s Business and Investment Dinner