LONDON (Reuters) – The European Union is less prepared for a no-deal Brexit than Britain, potentially leaving British firms at a disadvantage if there is no transition agreement and weakening London’s hand in future trade talks, a British employers group said.
The EU, with the exception of Ireland, lags behind Britain in its no-deal preparations “by some way”, the Confederation of British Industry said on Sunday.
“The combination of the EU and UK’s different approaches creates an imbalance, where EU goods and services exports will have easier access to the UK than UK goods and services exports will to the EU,” the CBI said in a report.
“From the business perspective, the UK has taken the more responsible approach, but it has also put the UK in a position of relative weakness for negotiating with the EU in the future.”
While Britain also needs to improve its preparedness, the EU has so far taken only a few limited, temporary measures such as allowing British Heavy Goods Vehicle licences to be valid for nine months after a no-deal Brexit and permitting British aeroplanes to continue flying for six months, the CBI said.
The EU should also say it will recognise Britain’s trusted trader scheme, something it already does with Canada, the United States and Japan to minimise red tape, the CBI said.
Britain has said it will allow financial services firms from the EU to continue to operate in the country for a period of time before having to apply for a new licence, but the bloc has yet to reciprocate.
New British Prime Minister Boris Johnson has said he wants a new Brexit deal with the EU but is prepared to proceed with a no-deal Brexit if necessary.
Brussels has said the deal it agreed last year with former prime minister Theresa May is its best and only offer.
The CBI report – based on feedback from thousands of firms – found companies in 24 of 27 sectors in Britain would be disrupted by a no-deal Brexit in the short or long term, with smaller firms less ready than bigger ones.
The CBI made over 200 recommendations for improving no-deal contingency measures, including a call on the British government to put the civil service back on a no-deal footing immediately.
It urged the EU to match Britain’s temporary mitigations in areas ranging from data to customs and to bring forward the ability for UK firms to apply for essential licences as a third country by the start of September.
(Reporting by William Schomberg, editing by David Milliken)