After two years of negotiations, the United Kingdom and the European Union still seemed, Friday evening, unable to agree on the commercial terms of their divorce.
The prospect of a lack of agreement, the famous "no deal", is becoming clearer ...
Either way, with or without an agreement, the rules will change for companies with the exit, on January 1, 2021, of the United Kingdom from the internal market and the European customs union.
“Borders and customs formalities will be re-established,” explains Isabelle Braun Lemaire, the director general of customs.
Companies on both sides of the Channel will have to make an import-export declaration before crossing the border.
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Currently, 120,000 French companies trade regularly with the United Kingdom without having to complete a customs or health declaration.
“Carriers will have to declare their goods upstream,” she continues.
The data will be studied during the crossing.
But will companies be immediately broken by the new rules?
“In the beginning, we feared a lack of fluidity at the entrance to the tunnel despite the information we communicated to them,” concludes the DG.
In the event of a “no deal”, what additional consequences?
The economic impact will be felt mainly because of the customs tariffs that the two blocs will put in place on their own.
The taxes applied to the entry of the European market on the goods will be those established with the countries where no trade agreement has been signed.
"On average, they are 5% on the European side but they can climb more", explains one to Bercy.
And “nothing also says that the United Kingdom will not review its standards in terms of competition and competitiveness, analyzes a specialist in European trade.
This could have an impact for us in terms of competitiveness.
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Which sectors will be the most affected?
Fishing, since British waters, which are very full of fish, will be closed to European fishermen.
But also textiles and the food industry which should see their customs duties explode: around 10% for textiles, between 15 and 20% for the food industry and even 30% on cheese and 12% for wine.
Ditto for the automotive and aeronautic industry.
“Our customers and our suppliers alike are already asking us to bear future customs duties,” confides Lionel Choukroune, legal and tax manager for French companies in the Sogefi group, an automotive supplier.
We will have to enter into financial negotiations to include these new costs.
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According to Bercy, on average Europe could apply customs tariffs of 10% on auto parts.
A blow for Sogefi which has two factories in the United Kingdom and about fifteen in the EU.
From there to imagine relocating the production sites?
Two years ago, the former boss of Airbus, Tom Enders warned that in the event of a "no deal" the aircraft manufacturer, which employs 14,000 people in the United Kingdom, would have to make "potentially very detrimental ”for its activities on British soil.
How much will this hard Brexit cost?
A recent study by insurer Euler Hermes-Allianz estimates that it will cause French exports to fall by more than 3.6 billion euros, against 2 billion euros in the event of an agreement.
This makes France the third biggest loser after Germany (8 billion euros) and the Netherlands (4.8 billion euros).
According to Medef, no less than 120,000 French companies that trade with the United Kingdom, including 3,000 located across the Channel, will be directly affected.
And not surprisingly, Brittany and Hauts-de-France - close to the British coast - are in the front line.
Are jobs threatened?
Yes and no.
According to a study, 50,000 jobs would be threatened in France if the demand for European products in the United Kingdom falls by 25%.
On the Bercy side, we especially fear job losses among fishermen.
Conversely, with Brexit, London will lose the advantage of the "European passport": foreign companies so far established across the Channel will have to have a foothold on the continent if they want to work with the EU.
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"You cannot neglect 500 million customers on the other side of the Channel", notes Pascal Cagni, chairman of the board of directors of Business France.
According to him, 180 British companies have already set up in France, 40% more than last year.
The most popular sector?
Finance.
“184 installation projects are underway,” says Arnaud De Bresson, CEO of Paris Europlace, with satisfaction.
This represents 5,000 direct jobs and around 15,000 indirect jobs.
"Big banks - Bank of America, Goldman Sachs, JP Morgan… - investment funds or fintech now have a Parisian pied-à-terre.
Is an agreement still possible?
Between Europe and the unpredictable English Prime Minister, Boris Johnson, a surprise is always possible but the differences seem deep ... For the first time, Wednesday, the European Union presented emergency measures in the event of a no-deal Brexit . Concretely, to avoid the chaos on January 1, with in particular English planes banned from landing on European soil or trucks from the Old Continent prevented from circulating in the United Kingdom, the EU proposes to maintain the status quo in transport during six months. Same scenario for fishing but for a year. London still has to accept. On Thursday, a spokesperson for Downing Street recalled that the United Kingdom intended to "regain control" of its waters on January 1.