Talks with the EU leaders on a trade deal are now "over", according to Downing Street.
Although just over two months remains for the impasse to be resolved, the outlook is bleak. It will mean tariffs on the export of goods and extensive regulatory checks on goods crossing the Channel. But what are the key areas of concern for Scotland?
Even before the Covid pandemic struck, the Scottish Government had undertaken scenario planning that suggested the economy could contract by anywhere up to 2.5 per cent to 7 per cent under a no-deal scenario, with the loss of up to 100,000 jobs. That prospect will only worsen if the the country is faced a with a no-deal arrangement coupled with all the ongoing impact of fresh coronavirus shutdowns
Exports crossing the channel at the short straits from Dover will be worst hit, with some estimates suggesting that up to 60 per cent of current flow will face significant disruption on day one, rising to up to 70 per cent within three months. This is expected to impact on the supply of goods currently being imported and exported through the Dover Straits, including food and medicine,
The ability to export food could face severe constraints through a combination of prohibitive tariffs, regulatory burdens and logistical barriers. This could includes tariffs of up to 40 per cent for lamb exports, of which around 95 per cent of all UK exports go to the EU, along with the the prospect of markets for Scottish seed potatoes being completely closed off.
UK nationals resident in or travelling to the EU.
UK nationals living in the EU would be required to satisfy member states’ immigration rules. UK nationals travelling to the EU may face additional procedures, and it is likely that delays would occur for UK nationals at EU ports, airports and juxtaposed controls.
Health and Social care
A significant proportion of medicines, medical devices and clinical consumables are imported from the EU, meaning the imposition of customs controls and tariffs if the UK leaves the EU with ‘no deal’ has the potential to substantially disrupt their supply. UK ministers have claimed these supplies would be a priority.
Scotland’s £117 billion service industry, including financial services largely based in Edinburgh, would face significant disruption and barriers to trade, with £5bn of service exports to the EU. Scotland would be seen as a third-country service provider under a no-deal departure, meaning, for example, that UK professionals’ qualifications would no longer automatically be recognised in member states. The abrupt loss of regulatory permissions to service cross-border contracts after exit for the financial services sector would also pose a significant risk
EU trade deals with third countries
The EU has trade deals around 40 other countries or trade blocs globally, but efforts to see these "rolled over" would undermined with a no-deal. Scotland now benefits from reduced tariffs and friction when trading with these countries. If, as now seems likely, the UK is unable to agree these deals being continued after exit, then Scottish exports, including of food, will no longer benefit from the current preferential trading terms.