UK Economic Groups Unite Saying 'No Deal Not Acceptable'... Concerns Over Jobs and Livelihoods

Over 70 Economic Organizations Joint Statement on the 17th... "Request to Persevere and Reach an Agreement"
"No-deal Economic Impact 2-3 Times Greater Than COVID-19," Analysis... UK Government Says "Well Prepared"

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Amid difficulties in future relationship negotiations following Brexit (the United Kingdom's withdrawal from the EU), over 70 UK economic organizations have expressed concerns, urging not to sacrifice the economy for political reasons. Representing more than 7 million workers, these economic groups have begun persuading parties to consider the already challenging current economic situation due to COVID-19, with just over two months remaining until the end of the transition period.

According to the daily newspaper The Guardian on the 17th (local time), more than 70 UK economic organizations, including the Confederation of British Industry (CBI), TheCityUK representing London's financial sector, TechUK (the UK Science and Technology Association), the National Farmers' Union, the British Retail Consortium (BRC), and the Society of Motor Manufacturers and Traders (SMMT), issued a joint statement emphasizing that "reaching a swift agreement is crucial for jobs and livelihoods," urging the UK government and the EU to continue negotiations for a trade agreement and find common ground.

They stated, "With compromise and perseverance, an agreement can be reached," and "the business community calls on leaders on both sides to find a way forward." They pointed out that many companies are not prepared for a 'No Deal' scenario, especially small and medium-sized enterprises, which face survival challenges amid the economic impact of COVID-19.

A recent survey conducted by the Institute of Directors among representatives of about 1,000 member companies found that 54% believe COVID-19 will exacerbate the damage caused by a No Deal Brexit. Additionally, about half of the respondents indicated that preparations for a No Deal situation within the transition period are unlikely to be completed.

The UK economic organizations emphasized that "(reaching an agreement) will help investment by removing threats of tariffs and quotas, maintain access to and use of key data agreements in the services sector, which accounts for nearly 80% of the UK economy, as before, and strengthen tariff cooperation to build trust." They expressed concern that if an agreement is not reached quickly, "day by day, the resilience of businesses will gradually disappear."

The reason these UK economic organizations issued a joint statement is due to growing concerns that the economic damage from a No Deal Brexit will expand. Economic analysis institutions forecast that the UK economy, already hit hard by COVID-19, will suffer even greater damage from a No Deal Brexit. The London School of Economics recently analyzed and announced that if a No Deal Brexit materializes, the UK's gross domestic product (GDP) will decrease by 8% in the medium to long term, which is 2 to 3 times greater damage than COVID-19.

On the 16th, EU leaders stated they would continue efforts to reach a trade agreement with the UK, but UK Prime Minister Boris Johnson, taking a hardline stance, pressured by saying, "There will be no free trade agreement (FTA) if the EU does not make concessions." Johnson said, "What we are saying is to come back if there is a fundamental change in approach," leaving room for negotiation but increasing the possibility of a No Deal.

On the same day, Michael Gove, UK Chancellor of the Duchy of Lancaster, claimed in an op-ed that preparations for a No Deal Brexit are "well underway," despite the joint statement from economic organizations. He said that while a No Deal Brexit is "not the preferred destination," "if we have to choose between having our hands tied indefinitely and being able to directly shape our future, there is no choice." He added, "Fundamental changes in the EU's attitude, policies, and politics are necessary."

This content was produced with the assistance of AI translation services.