Phil Hogan, the European trade commissioner, has warned that Europe’s ties with the UK 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 at a European Parliament committee hearing, Mr Hogan urged EU governments to do more to make businesses aware of the changes they face at the end of the year.
Because London plans to leave the single market and customs union, any free-trade agreement would only limit the economic damage, he said. “On January 1, things will change anyway — even if we reach a deal,” said Mr Hogan.
“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 UK would default to trading with the EU on World Trade Organisation terms — meaning tariffs and quotas would also return for the first time in a generation.
Earlier this month, British cabinet minister Michael Gove warned logistics firms to brace for strict border controls. Negotiations between the UK and EU about their future relationship have already become fraught even before formal talks begin.
Britain is seeking a tariff and quota-free agreement on goods trade similar to one Canada signed with the EU.