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Asia braces for ‘serious challenges’ of a no-deal Brexit

23 8 10

AS Britain continues to tear itself apart at the seams all in the name of leaving the European Union (EU), the business world is looking on with keen interest as the implications of a no-deal Brexit promise to reach far beyond the borders of the United Kingdom.

After Prime Minister Theresa May’s crushing defeat of her deal in parliament on Tuesday, a no-deal Brexit – in which the UK will leave the European Union without a trade agreement – is looking increasingly likely.

In a global economy already cowed by the US-China trade war and China’s slowdown, the uncertainty of Brexit is spooking markets and Asian companies are developing contingency plans if the worst-case scenario is realised.

SEE ALSO: UK sets sail for Asia as Brexit storm rages on

The implications for Asia will likely be significant. Not only will the UK have to strike a trade deal with individual governments, but Asian companies with operations in the UK will need to rethink investment strategy as they are faced with diminishing UK relevance and the possibility of tariffs.

Without a bilateral trade deal with the EU, Britain would be subject to World Trade Organisation (WTO) rules. UK exports would face the same customs checks and tariffs as other countries outside of the EU, putting an end to the frictionless zero-tariff trade arrangement. This will likely increase the price of some goods, lead to shortages, and cause significant delays on both sides of the English Channel.

Britain’s Prime Minister Theresa May (centre left) as she speaks in the House of........

© Asian Correspondent