The former head of the World Trade Organisation has warned that a no-deal outcome to Brexit negotiations could relegate the UK from the top tier of world trade.
Pascal Lamy, who headed the WTO between 2005 and 2013, commented in a discussion with CoronaNonics that the UK faces a stark choice between minor or great trade relationships with the EU bloc.
Lamy said that: “Is trading between UK and EU under WTO terms a good thing or not? It depends on which league you want to play soccer.
“If you like the game and if you like very good players you will go to the first league. If you have less money to spend or if you’re not such a big fan, you can watch the match of the second, third, fourth league.
“It’s still soccer, it still is trade, but it’s a minor version of what could be great.”
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He continued that; “It’s not governments that trade. It’s businesses and that their lives will be terrible in case there is no serious transition between the nirvana of the internal EU market, which is where the EU-UK economy is for the moment, and anything which will be much worse than that.
“It shouldn’t be much worse than that, but it’s going to be much worse without a proper transition organised.”
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Talks between the EU and UK are ongoing, whilst the government has made progress in negotiations with other nations to secure trade agreements, including most recently with Japan.
Read more: Just one in four businesses fully prepared for Brexit with five months to go
However, with the financial damage caused so far by Coronavirus expected to be longer-lived than initially thought, the fear for both British and European businesses which rely on free and easy-access trade between each other is that a no-deal scenario could be a step too far for many firms struggling to survive.
What is critical is that businesses prepare as best as possible. Find out how Brexit-ready your firm is by downloading our free Brexit Planning Checklist here.