No-deal Brexit would be a multi-million-pound blow, CBI warns
A no-deal Brexit would be a “multi-million-pound blow” to the Scottish Economy, CBI Scotland has warned.
The collapse of international trade deals as a result of crashing out the European Union would jeopardise jobs according to CBI Scotland, who urged politicians to “work quickly to come to a deal”.
Trade deals with an estimated 70 countries in place thanks to membership of the EU are at risk, meaning traffics could be imposed as soon as the UK leaves, it said.
CBI Scotland director Tracy Black said: “If the UK leaves the EU without a deal, overnight businesses in Scotland could cease to enjoy the benefits of tariff-free trade with, and easy access to, crucial markets for products and services, from Canada to South Korea.
“Many firms are unaware that it’s not just their relationships with EU customers at risk from a no-deal Brexit, but relationships across the globe.
“Individual businesses trading with markets outside the EU would face tariffs worth millions being slapped on them instantaneously. These trade deals span five continents and are vital for the smooth export of our goods and services.
“Exports to countries with EU free trade agreements are worth almost £3.9 billion to Scotland every year. The risk to these deals is an overlooked danger to our economy and yet another reason why no-deal is not an option for the UK and jeopardises jobs in our communities.
“It is vital that compromise is shown on both sides of the Channel and that politicians work quickly to come to a deal.”
The warning follows news that the Scottish economy could be pushed into recession if the UK leaves the EU without a deal.
Scotland’s top economic adviser set out the impact of short-term disruption to supply chains over a number of months, and also looks at an extended period of disruption.
Among the potential risks of a no-deal outcome, the report by Gary Gillespie suggests Scotland’s Gross Domestic Product (GDP) could fall by up to 7%.
Trade with the EU is also expected to be “significantly impaired”, with a forecast for a potential drop in Scottish exports of between 10% and 20%.
A predicted fall in exports and overseas investment, coupled with a broader economic slowdown, is suggested to result in a 10%-30% depreciation in sterling.
Figures published on Tuesday by the Office for National Statistics showed unemployment in Scotland had dropped to a record low of 3.5%, but the Scottish Government’s report stated that the jobless total could rise by as many as 100,000 people in the event of a no-deal.
A UK Government spokeswoman said: “The best way to avoid no deal is for parliament to agree a deal.
“Our deal is the best deal available for jobs and the economy across the whole of the UK, including Scotland, allowing us to honour the referendum and realise the opportunities of Brexit
“Extending Article 50 simply defers the point of decision and the policy dilemmas, choices and trade-offs we face will not go away if we postpone exit day.”