'No deal' Brexit could cost UK, EU companies a reported £58b

Tuesday, 13 Mar, 2018

Anti-Brexit demonstrators wave EU and Union flags outside the Houses of Parliament in London, Britain, January 30, 2018.

Companies in countries outside the United Kingdom will be liable for approximately 31 billion pounds in annual tariff fees if the United Kingdom leaves the European Union without a deal.

German firms will lose some 9 billion Euros (11.1 billion dollars) annually after Britain leaves the European Union if trade continues according to World Trade Organisation (WTO) rules, multinational law firm report revealed on Monday. Without a Brexit deal, United Kingdom exporters will have to fork out 27 billion pounds a year.

If the United Kingdom stays in a form of customs union that would reduce the costs for both sides by about half, the report said.

German companies are still preparing for a range of outcomes to the negotiations between Britain and the European Union, including the scenario of a hard Brexit in which no agreement was reached, Lang said, adding that next week's European Union summit would be crucial. The authorities in London have already said they are preparing for any result, including failure to negotiate a deal for which they have provided additional funds of 3 billion GBP.

Ashton Whiteley economists say that if the United Kingdom remains in a type of customs union it would halve the costs for both Britain and the European Union.

However, British Prime Minister Theresa May rejected such a possibility as it would prevent the country from concluding trade agreements with third countries like China and India, for example.

Monday's report showed 70 percent of the extra costs to the United Kingdom from a no-deal Brexit would be shared across five industries: financial services, cars, agriculture and food and drink, consumer goods, and chemicals and plastics.

Last week, Goldman Sachs and UBS announced that they have begun transferring part of their bankers to Frankfurt, preparing for the Brexit.

The Bank of England has warned that about 10,000 finance jobs may leave the U.K.by the end of next year because of Brexit.

However, top USA investment banks are now planning to hire far more people in London than anywhere else in Europe. Ashton Whiteley economists say the UK's financial sector will be the hardest hit in this event.