Brexit trade talks have resumed in London after negotiators returned to the table following a week-long standoff. The talks began as the UK and Japan signed a £15.2 billion free trade deal in Tokyo. But how will life change once the Brexit transition period ends?
Britain and Japan formally signed a trade agreement marking the UK’s first large post-Brexit deal last week.
This deal will mean nearly all its exports to Japan will be tariff free while British tariffs on Japanese cars by 2026.
The two countries reached a broad agreement in September.
Talks over a post-Brexit trade deal which have resumed in London after negotiators returned to the table following a week-long standoff.
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If the transition period concludes without a deal being struck between the UK and EU, the UK will have an Australia-style trade deal.
Under this type of deal, the UK would have to adhere to World Trade Organization rules, so tariffs would be imposed on goods coming into the UK from the EU and vice versa.
Tariffs would mean there would be 10 percent additional costs added to cars and up to 30 percent on milk, cheese and some meat.
Shops would inevitably pass along that price to consumers, with some companies planning to move out of the UK to avoid changes to their trading relationships.
Mat Woodcock, Director at LLamasoft said Brexit is likely to cause a number of problems for business supply chains.
Mr Woodcock said: “With the December 31 deadline fast approaching, we are getting no closer to a final Brexit deal.
“It is time for businesses to accept uncertainty as the deal they’ve been given, and prepare accordingly.
“This is not a time for businesses to bury their heads in the sand.
“They must invest in technologies that apply advanced analytics, AI and machine learning to identify and fix potential supply chain weaknesses before they are exposed.”
Mr Woodcock added: “The volatile nature of negotiations and confusion around trade deals mean businesses are unable to make any major decisions and subsequent changes to supply chains.
“However, there is too much at stake to do nothing, with potential shortages in medicines and food a possibility.
“Companies must therefore focus on having responsive options immediately available.
“They should also draw upon their learnings from Covid-19 around the need for agility, contingency planning, inventory management and alternate sources of supply.
“Companies don’t have to shoot in the dark.
“Digital twin technology allows businesses to model a range of scenarios and test the effectiveness of contingency plans ahead of deployment, ultimately gaining a better understanding of the implications of each action, providing a dry run for how to overcome potential Brexit related disruptions such as demand movements or port delays.
“For the prosperity of businesses and the country alike, the time to prepare is right now.”