With the United Kingdom nearing the date of exiting the EU, i.e. 31 October, the Bank of England governor, Mark Carney, warned the nation of the tariffs which would be imposed on exports to the EU, if the Britain departs from the union without a deal. Carney said that the no-deal Brexit would cause a major hit to the businesses as they are not prepared for the same.
Carney rejected Boris Johnson’s claim that UK could avoid the EU trade tariffs. Johnson, who is a leading candidate running for the seat of prime minister, said that the UK through Gatt 24, an article of the EU’s General Agreement on Tariffs and Trade, would continue the trade with EU in an unchanged manner if both the parties agree for same.
It is a very crucial time for Britain since the final exit is around the corner after seeking an extension to leave the bloc back in March. Johnson said that the UK must leave in October, even if it has not struck a deal.
Johnson’s opponent Jeremy Hunt said otherwise. Hunt proposed that UK should seek more time as the economy needs to be prepared to absorb the shock from the shift, although ‘would accept no-deal as a last resort’.
Carney emphasised that decision of exiting the block with no-deal needs to be take with ‘absolute clarity’ for it would have both short and long-term repercussions on the Britain’s economy.
He told BBC, “About 150,000 businesses still do not have the paperwork they need to keep exporting to the EU in the event of a no-deal Brexit.’
“The Gatt rules are clear… Gatt 24 applies if you have a [withdrawal] agreement, not if you’ve decided not to have an agreement, or you have been unable to come to an agreement,” Carney said.
He added, “So… we should be clear that not having an agreement with the European Union would mean that there are tariffs, automatically, because the Europeans have to apply the same rules to us as they apply to everyone else.”