The Union Jack and the European Union flags. Picture: REUTERS/JON NAZCA
During four years of political wrangling, there have been plenty of 11th-hour stays of execution for the kind of upheaval a no-deal would bring. What has become clear to many business managers is that they cannot bank on that happening again after the UK said it would break international law by reneging on part of the Withdrawal Agreement signed in January.
Arla Foods, northern Europe’s biggest dairy producer, is getting anxious it will be on the hook for €100m of losses should a trade deal remain elusive. Executives at the Danish company pressed the country’s foreign minister, Jeppe Kofod, at a meeting in Copenhagen on September 15 to redouble efforts to get an agreement done.
No nation has more at stake than Germany, Europe’s biggest exporter. The UK bought almost $85bn of goods from Germany in 2019, more than from any other country in the world. About 460,000 jobs in Europe’s largest economy depend on exports to the UK, according to Germany’s IAB labour market research institute.
With no deal in place by the end of the year, companies would have to trade under the World Trade Organization’s non-preferential rules, which include a 10% tariff on cars and up to 22% on vans and trucks, fees that are far higher than the margins of most manufacturers. Swedish truck maker Volvo Group said it was continuing preparations to trade on those terms.