Paul Drechsler, president of the CBI, told the Lord Mayor of London's business and investment dinner on Thursday evening that, if Britain has to revert to World Trade Organization tariffs after Brexit, it will open a “Pandora’s box” of regulatory barriers to trade on both sides of the Channel.Mr Drechsler said that the CBI supports the government’s aim of securing an ambitious agreement with the EU, and revealed that the CBI is coordinating efforts with business groups throughout the other 27 EU members in a bid to formulate the basis of a comprehensive trade agreement that will be in all parties’ interests.On triggering Article 50, Mr Drechsler said, “Right now, it feels like we’re just reaching the top of the Article 50 rollercoaster. Any minute now, maybe next week, maybe the week after that, we’ll suddenly drop into the twists and turns of negotiations.”

WTO rules: the economic consequences

Paul Drechsler continued, “Wherever I go across Europe, I hear concerns about the UK leaving without a deal and falling into World Trade Organization rules. We should be under no illusions about what this would really mean. A no-deal scenario would open a Pandora’s box of economic consequences.“The UK would face tariffs on 90 per cent of its EU exports by value and a raft of new regulatory hurdles. Let’s remember these barriers would hurt firms on both sides of the Channel.“Here in the UK and across the continent, firms are worried about this worst-case scenario. Some are getting ready for it to reduce economic damage. Some won’t prepare because they’re hoping for a deal. But, in reality, many firms can’t prepare because the cost of change is simply too high to even consider it.”Mr Drechsler said that the CBI agrees with Prime Minister Theresa May that a deal can be achieved, adding, “To those whose first and only choice is for Britain to walk away without a deal, I say you’re not only wrong but irresponsible.”He said that securing an ambitious trade deal is in everyone’s interests. “Just as European countries benefit from a thriving UK, British business needs a strong European Union.“Making sure firms in London – but also Berlin and Bordeaux – can get people with the right skills is in everyone’s interest.“And getting a ‘smooth Brexit’, which minimises disruption across the continent, is in everyone’s interest. An ambitious, comprehensive deal covering every sector is what’s best for Britain, it’s what’s best for Europe, and we’ll do everything we can to get it.”

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High-level international meetings

Paul Drechsler said that businesses of all types and in all areas of the UK will be affected by Brexit. “But the negotiations will determine how much. So at the CBI, we’re travelling extensively,” he added.“Already in 2017, CBI director-general Carolyn Fairbairn and myself have met the Maltese prime minister, the Belgian deputy prime minister, the French General Secretary for European Affairs, and senior officials in the German ministries for finance and economics.“We’ve met the ambassadors from most EU countries, as well as our sister organisations from France, the Netherlands, Ireland, Germany, Malta and soon Italy. We’ll keep working with business groups throughout the remaining EU27. At the CBI, we will continue to cut through the political noise to give the economics a voice.” For related news and features, visit our Brexit section.Access hundreds of global services and suppliers in our Online Directory  Get access to our free Global Mobility Toolkit

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