PARIS, Oct 24 — France warned its business leaders yesterday to prepare for all potential Brexit scenarios including Britain crashing out of the EU with no deal, as Paris scrambles to plan for a new era of trade with its neighbour.
The meeting between junior finance minister Agnes Pannier-Runacher and members of trade federations comes after the French government unveiled draft legislation setting out preparations for a possible “no-deal” Brexit.
“It’s about really explaining to them that they must prepare at the same time for the United Kingdom becoming a third-party country, and the risk of there being no transition period after March 2019,” a ministry source said of the meeting.
Any transition period to smooth Britain’s exit “depends on an exit deal having been reached with the United Kingdom,” the source said — a deal that has eluded the EU and Britain so far, just months away from Britain’s scheduled departure on March 29, 2019.
French companies are therefore being urged to prepare for “all options,” the source said.
Some 30,000 French companies export goods to Britain, according to the finance ministry. The exports were worth some €31 billion (RM148.1 billion) in 2017.
“There are also all the companies which import goods from the United Kingdom and those that import services which are also affected,” the source said.
Credit insurer Euler Hermes estimated yesterday that a no-deal Brexit could cost French exporters up to €3 billion euros next year.
Germany would, however, be the biggest EU country to lose out in trade terms, with its exporters losing some €8 billion, followed by the Netherlands with €4 billion of losses.
Belgium, like France, would lose an estimated €3 billion under the credit insurer’s model, which is based on import taxes of four to five per cent being imposed as per default World Trade Organisation rules.
It is also based on estimates that the pound would crash from its current value of €1.13 to €0.88 by the end of 2019.
The car manufacturing industry would be the worst affected by such a scenario, Euler Hermes predicted, followed by equipment manufacturing, electronics, aeronautics and drink production.
The draft bill unveiled by the French government this month lays out in broad terms the preparations needed for a potential no-deal Brexit.
It will cover what happens to French citizens living in Britain and vice versa, as well as customs plans to ensure the neighbours can continue to trade smoothly.
France has already begun recruiting extra customs agents to be deployed along the border after Britain leaves the EU. — AFP
Source: The Malay Mail Online