This is what the Brexit cliff edge looks like

In 11 key policy areas, POLITICO reporters look ahead to March 30, 2019.

Photo Illustration by Ivo Oliveira/POLITICO/Source Images by Getty

The smart money is on the U.K. and EU coming up with some kind of deal on how to handle Britain’s exit from the bloc. But with talks deadlocked — despite a more positive atmosphere in the fourth round last month — and the Brexit clock ticking down to a 2019 out date, a no-deal departure is in the cards.

Prime Minister Theresa May told the Tory faithful in her closing speech to the party’s annual conference last week that she believes a deal is possible, but that the British government is planning for the worst. “It is our responsibility as a government to prepare for every eventuality. And let me reassure everyone in this hall — that is exactly what we are doing,” she said.

So what would actually happen — beyond the likely chaos, acrimony and no doubt to some on both sides of the Channel, proclamations of a great opportunity waiting to be seized — in case the U.K. does leave without a deal?

In 11 key policy areas, POLITICO’s policy reporters throw forward to March 30, 2019 — when the U.K. finds itself outside the EU — and gaze over the Brexit cliff edge.

CUSTOMS/PORTS

What happens immediately?

Customs declarations at U.K. ports balloon to 255 million per year from the current 55 million, according to government figures.

As a result, long queues likely start to build up at entry points around the country. Fresh produce begins to rot as it waits for clearance and roads around major ports like Dover are gridlocked.

“Just in time” supply chains that require rapid transport of goods break down — including those for heavy industry, carmakers and producers of high-tech goods with assembly plants in the U.K.

Irish producers of fresh produce also likely face delays using the U.K. land bridge to reach the Continent.

What can they do about it?

The U.K. government needs to invest to widen roads and build new parking and customs handling facilities at its major trading hubs. It has already put aside £250 million for a new lot with capacity for 3,600 vehicles to cope with traffic backed up from Dover Port.

Customs control systems will also need to be upgraded. These could include cameras that recognize vehicles with goods that have already been audited and cleared for passage. Some have also suggested merging the competencies of the more than 30 agencies and government bodies that regulate and inspect the customs process under a single ministry.

TRADE

What happens immediately?

Free trade between the EU and U.K. ends at midnight on March 29, 2019 — and both sides fall back on World Trade Organization tariffs.

The combination of such tariff barriers with delays created by new customs checks risks having a severe impact on food supplies and other goods that the U.K. imports from the EU.

Within hours to a few days, the additional costs of tariffs and delays will likely create problems for companies, supply chains and retailers that depend on goods traded with the EU27 — with impacts on almost every sector of the economy.

Prices in shops inevitably rise as a result.

What can they do about it?

The only way out from the WTO dilemma is to negotiate a trade deal. Once trade talks are underway, WTO rules allow countries to bilaterally lower tariffs on goods.

HEALTH CARE

What happens immediately?

The EU (Withdrawal) Bill — assuming it passes — transposes EU law into British law, so not a lot changes immediately. Medicines and medical devices approved for EU licenses will still be recognized in the U.K.

There is uncertainty over whether drug assessments led by U.K. experts for the European Medicines Agency will still be valid, and hence whether such products would be pulled from retailers across the Continent.

EU law states that medicines imported into the bloc must undergo strict tests. That means U.K.-based manufacturers will need to set up “batch control” centers on the Continent so an authorized EU regulator can test each new batch to ensure the quality complies with EU laws.

All medicines made in the U.K. are treated as imports to the EU and face tariffs, and most likely vice versa.

U.K.-based companies with EU-licensed drugs will need to ensure they have an EU entity and transfer their drug rights to this entity. They will also need to ensure their drug safety monitoring teams are based in the EU.

What can they do about it?

The U.K. can establish a system for accepting the drug license processes of the European Medicines Agency — most probably by setting up a new body to sign off on drug licensing decisions in place of the European Commission.

The U.K. will need some kind of agreement with Europe to recognize the EMA’s work, but Europe might not allow that. Countries that currently adopt EMA recommendations (including, for example, Norway, which is outside the EU, but inside the European Economic Area) pay into the EU budget for the privilege. In Norway’s case, they have no say on EU drug safety policy. This would also apply for clinical trial rules and medical devices.

AIR TRAVEL

What happens immediately?

All flights between the U.K. and EU27 stop. Seriously. Barring a transition deal, the unthinkable comes true.

More than 135 million passengers annually fly between a U.K. airport and an EU27 country. That’s about 370,000 passengers per day.

The U.K is no longer part of the EU-U.S. open skies agreement, meaning that flights to American destinations are also grounded.

Leisure and business travelers are forced to take the ferry or Channel Tunnel services between Britain and France, leading to skyrocketing demand and delays.

The transport of transplant organs by scheduled flights between the U.K. and the EU27 is impossible.

What can they do about it?

The first step will be to clinch a transitional agreement allowing at least direct flights to and from the U.K and the EU27 to take off. There will be intense lobbying from some member countries — under pressure from their airlines — to restrict market access for U.K. airlines. Other countries like Ireland will push for a liberal approach.

SECURITY AND INTELLIGENCE

What happens immediately?

Not much in the first days and weeks. The U.K. must technically leave the EU’s security data-sharing platforms, but extracting itself will likely take weeks.

Intelligence sharing at the MI5-, MI6- and GCHQ-level with their counterparts in European countries happens bilaterally, so leaving the EU makes no difference.

Britain wouldn’t be able to access EU databases, which include information on, say, a terror suspect if that person is an EU citizen or has a criminal record in the EU.

The European Arrest Warrant will not be enforceable in the U.K., which means that criminals might choose the U.K. as a safe haven to escape to if they are wanted by the police forces of EU countries.

What can they do about it?

Security is so important that the most extreme scenarios here are unlikely to unfold. The EU could negotiate an ad hoc deal with the U.K. for it to maintain Europol membership, providing access to Europol’s databases and the Schengen Information System. But that would be complicated by the fact that Europol operates under the jurisdiction of the European Court of Justice (ECJ), which the British government says can’t have any say over U.K. affairs post Brexit.

ENVIRONMENT AND CLIMATE

What happens immediately?

If ports are clogged because of increased customs checks, tons of waste ready to be shipped to EU countries for incineration or recycling will be stuck with other goods.

New tariffs on exports of waste and recycling translate into increased environmental costs for businesses and lower revenues for municipalities.

Europe’s carbon market, the Emissions Trading System, is disrupted.

What can they do about it?

If the U.K. wants to continue trading goods and services with the EU, the bloc will likely request that it complies with the EU’s environmental standards. Environment Secretary Michael Gove recently told the U.K. parliament’s environment, food and rural affairs committee that Britain would not necessarily stick to the exact same standards, but rather seek “mutual recognition.”

If recent remarks by EU’s chief Brexit negotiator Michel Barnier are any indication, this won’t be simple. “The U.K. wants to take back control, it wants to adopt its own standards and regulations. But it also wants to have these standards recognized automatically in the EU,” Barnier said. “This is simply impossible.”

ENERGY

What happens immediately?

Having left Euratom, the U.K. no longer has an internationally approved inspection system, which means other countries can no longer send nuclear materials or components for power plants.

Depending on how much nuclear fuel is stockpiled before Brexit, the U.K. could run out, leading to power outages. Its eight nuclear stations generate around 20 percent of its electricity.

Adding to the blackout risk is the fact that the U.K. will no longer be a member of the EU’s internal energy market. That won’t automatically kill gas and electricity flows between the two, but it could bring new tariffs, complicate trading rules and lead to price spikes.

The U.K.’s supply of radioactive isotopes used to diagnose and treat cancer patients stops almost immediately. These decay within a few hours and the U.K. does not produce them.

What can they do about it?

The U.K. and EU could agree on a transitional arrangement that gives Britain more time to pull out of Euratom and agree all of the bilateral cooperation agreements needed to continue trading fuel and equipment. Even if the U.K. sets up its safeguard inspections system before Brexit — a big task within the tight timeframe — the deals have to be ratified by other countries and the system would have to pass muster with the International Atomic Energy Agency.

FISHERIES

What happens immediately?

The U.K. cuts off access to a 200-nautical-mile zone around the island, known as the exclusive economic zone. British navy patrols the maritime borders to stop EU vessels from illegally fishing in British waters.

U.K. fishermen, fish processors and retailers go bankrupt from tariffs imposed by the EU on fish exports and reduced access to the EU market.

Germany and Denmark also lose significant sales of fish products, as both countries are among the top five countries exporting to the U.K.

EU fishermen may lose their investments in British fleets and companies depending on the rules adopted by the government.

What can they do about it?

There is a mechanism for avoiding a free-for-all that would seriously deplete fish stocks. Under the U.N. Convention on the Law of the Sea, countries that share borders are supposed to jointly manage shared fish stocks. The U.K. would need to negotiate with its former EU partners over how best to accomplish that. At the same time, the U.K. will be working hard to develop new markets for its fish around the world through trade deals with other countries.

TECHNOLOGY

What happens immediately?

If you’re on a British cellular plan, say goodbye to free phone calls, text messages and Facebook posts when traveling across the EU as the U.K. will not automatically be part of the EU’s regionwide free-roaming pact.

Companies are forced to stop sharing digital data between the U.K. and EU because of the lack of a privacy agreement between both sides. British surveillance and intelligence powers also fall under increased EU scrutiny to comply with the region’s privacy standards.

Britain’s competition authority is inundated with high-profile antitrust cases that had previously been reviewed solely by European officials — a landslide of rulings that experts say the agency currently does not have the resources to handle.

What can they do about it?

On privacy, Britain can comply with Europe’s rules, though the country’s surveillance activities will come under scrutiny if people’s data is shared between the EU and U.K. The same goes for Britain’s stance on tax and competition in the digital world, as lawmakers may hope continuing with Europe’s policies will soften the blow for companies and citizens accustomed to protections offered under EU law.

FINANCIAL SERVICES

What happens immediately?

Contracts of all kinds — from insurance to loans and derivatives — are disrupted because U.K. firms are not able to continue servicing EU customers (or vice versa) under so-called passporting arrangements.

U.K. contracts may also be disrupted because they still reference EU laws or bodies.

EU banks that have derivatives cleared through U.K. central counterparty (CCP) clearing houses are in breach of regulations, as those CCPs will not be authorized.

What can they do about it?

Financial lobby firms are calling for U.K. lawmakers to grandfather in old contracts as part of the EU (Withdrawal) Bill, meaning existing rules would continue to apply; while new contracts are subject to the new rules. EU member countries would need to adopt a similar approach under domestic rules.

Individual counterparties could also avoid many cliff edges in their new contracts by adding clauses that specifically address Brexit outcomes.

CITIZENS’ RIGHTS

What happens immediately?

U.K. citizens living in EU countries may no longer have free access to a family doctor; lose the right to work; no longer be entitled to welfare; and their children may no longer have access to education.

The EU (Withdrawal) Bill — assuming it is passed by the U.K. parliament — holds some protections for EU citizens living in the U.K. because free movement directives will be transposed into U.K. law. In practice, though, there will be nothing to stop the U.K. removing all the rights EU citizens currently enjoy if it decides to do so.

Under pressure to take back control of immigration, the government could introduce a visa system for EU citizens coming to the U.K. for extended periods of time.

European Health Insurance Cards (EHIC) — which allow medical expenses to be reimbursed while abroad in Europe — can no longer be used by U.K. citizens traveling to the Continent (and vice versa).

What can they do about it?

If all hope of a deal with the EU is extinguished, the U.K. could return to its pre-EU status, which featured bilateral arrangements with individual countries.

Individual citizens would still have some legal protection — from constitutional law in the relevant country and the European Convention on Human Rights — but there would be huge uncertainty on all sides.

Annabelle Dickson, Cat Contiguglia, Jakob Hanke, Hans von der Burchard, Simon Marks, Joshua Posaner, Cathy Buyck, Sara Stefanini, Kait Bolongaro, Helen Collis, Mark Scott, Marion Solletty, Giulia Paravicini and Kalina Oroschakoff contributed reporting.

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