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Who would police the movement of goods between the EU and the UK? The customs infrastructure would have to be large and sophisticated, and the motivation for black market operation would surge. Depending on the day-to-day relative currency values, money laundering and arbitrage opportunities would abound. If the availability of basic foodstuffs and household supplies were to decline, there would be a strong incentive for offshore suppliers (e.g., China, USA, Brazil) to ship directly to poorly-monitored distribution centers, bypassing monitoring stations. Industrial supplies might also be in demand, encouraging hoarding and under-the-table transactions. Labor migration might also occur to fill in the gaps left by the official system: is it better to have an "illegal" nursing staff at your hospital or "no" nursing staff? Or at your farm, or factory?
Just trying to visualize what would actually happen if people woke up in March 2018 and there is no actual regulatory environment and no capable regulatory agencies. Where would you buy your groceries if they are not available at the government-approved stores?
It's possible that interim agreements might be thrashed out very quckly, but none of them will be on terms favorable to the UK, especially as sterling would nosedive
keep to the Fen Causeway
On the UK side the problem is bigger by almost an order of magnitude because the EU27 makes up c. 45% of UK imports. And so a lot of goods could end up stuck in customs for lack of an infrastructure to clear them. I have written elsewhere of the consequence of a failure to reach a deal on a "Blue Skies" deal extension, as here there is no WTO fall-back. Flights between EU and UK will simply cease. Industrial production could collapse if supply chains get disrupted by goods stuck in transit.
All in all a giant clusterf*ck...
Index of Frank's Diaries
Politico reported in March that even the initial delivery for Jan 2019 is in doubt, referring to the treasury Select Committee discussions.
Has the UK governement ever delivered a successful software system on time and to budget, never mind scaled one up by a factor of five during development
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