EU's Trade Commissioner Phil Hogan has warned the relationship between the European Union and the United Kingdomo will undergo a “massive” change when the post-Brexit transition period ends -- regardless of whether both sides reach a trade deal by their year-end deadline. Speaking to a European Parliament Committee in Brussels today, Hogan urged EU governments to do more to make businesses aware of the changes they face after Dec. 31.
Because London plans to leave the single market and customs union, any free-trade agreement would only limit the economic damage, he said.
“On Jan. 1, things will change anyway -- even if we reach a deal,” Hogan said. “It will be much worse without a deal, but even with a deal there is going to be a massive change in terms of logistics, in terms of how we trade with each other, how we travel.”
Businesses face the prospect of additional customs declarations and delays at the border even if the two sides reach an agreement on their future relationship. If those talks fail, the U.K. would default to trading with the EU on World Trade Organization terms -- meaning tariffs and quotas would also return for the first time in a generation.
The EU Commissioner was updating MEPs on trade discussions with third countries. Hogan warned MEPs that many EU countries underestimate the massive changes which will happen on 1st January 2021.
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