No deal Brexit or no Brexit – Certainty is needed

With MPs across all parties rejecting the Brexit Deal presented by Theresa May by a frankly colossal margin of 432 votes to 202, the default position for the moment is that the UK will crash out of the EU without no deal on the 29th of March 2019. To put the defeat into perspective it’s believed to be the greatest government defeat ever (except where one party instructed their MPs to abstain).

No deal is potentially the worse possible situation in the short term. Even if you side with the politicians who claim in the long term that this gives the most opportunity in forging trade deals around the world, it leaves our trading relationship with the EU entirely unknown and this has to be bad for small merchants who rely on cross border trade with the EU.

“The risk of a disorderly withdrawal of the United Kingdom has increased with this evening’s vote. While we do not want this to happen, the European Commission will continue its contingency work to help ensure the EU is fully prepared.”
– Jean-Claude Juncker, European Commission president

Of course it is possible that the UK will simply apply no tariffs on goods from the EU and it’s possible that in the short term the EU might not apply tariffs on goods from the UK, but that’s wishful thinking and by no means certain. The reality is that without a deal the country is simply not ready to trade after Brexit.

Other options are now that Theresa May can hop on the Eurostar back to Brussels and beg for some form of concessions but based on the 230 vote margin there’s a long way to go before MPs might accept the deal.

Labour’s Jeremy Corbyn is also triggering a vote of no confidence which could topple the government. This would appear unlikely as whilst rebels are willing to vote down the Brexit deal they’re unlikely to gift Labour the government and in the process quite likely lose their own seats in the Commons along with their cushty salaries and benefits.

There is a possibility that Brexit could be delayed but this only prolongs the uncertainty and is by no means a given as it’s reliant on the EU countries all agreeing to an extension. EU countries are likely to look at an extension to Article 50 as a needless delay and refuse to grant it, if there’s no plan in place that has a reasonable chance of being passed by the British parliament.

There’s also a remote chance of a second referendum although no one is sure if that should be on Theresa May’s current deal offer, a no deal Brexit or something else entirely… which makes the whole idea of a second referendum a bit of a fix as MPs will lobby like mad to try and ensure the country votes they way they want them to.

Finally it’s not beyond the realms of possibility that Brexit could be entirely cancelled. Both Conservative and Labour suggested that they were committed to Brexit in one form or another and approved Article 50 in the first place so this would potentially be a crisis that neither party is ready to countenance.

What’s really damaging is that online merchants are no where nearer to understanding how they will trade with Europe in just two month’s time. Ordering stock is on hold, Sterling is in turmoil having bombed before yesterday’s vote just to skyrocket when the govenment was defeated, employment of EU citizens is uncertain and most important of all, if you figure out all of these challenges, no one knows if you’ll easily be able to ship goods and what customs paperwork and tariffs there may be.

Currently the worst but perhaps the only way to safeguard your feedback metrics may be to temporarily shut up shop so far as sales to Europe go before the 29th of March. That may sound drastic but if you sell and can’t ship it’s a realistic short term strategy.

Merchants desperately need to know how they will be trading with Europe. In reality it doesn’t matter if it’s free trade status quo, full tariffs and customs inspections, or somewhere in the middle. Uncertainty is the killer and clarity is needed and needed now.