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Brexit can be divided into very hard Brexit,hard Brexit,middle Brexit,and soft Brexit.Very hard Brexit model refers to the UK directly starting Article 50 or resuming the 1972 Act,in other words,the United Kingdom will not negotiate any new agreements with the EU,and trade with the EU will fully comply with WTO rules.The idea of hard Brexit means that the UK will launch Article 50 in the short term and reach a minimum free trade agreement.For example,set up a free trade agreement model on tariff reduction and commodity transactions.However,a hard Brexit means that the service industry will not be considered in the newly concluded free trade agreement.Article 50 will also be launched for a moderate Brexit,but it will wait until the other EU countries elections over and all EU countries are ready for the Brexit.Moderate Brexit can establish a more comprehensive and broader free trade agreement to ensure unity and collaboration with EU's goods and services regulations and product standards.A soft Brexit is when the UK joins the ERA,but the UK will lose the decision to change market rules.A soft Brexit can guarantee free trade,that is,the free flow of goods,services,capital,and people.
After the emergence of hard Brexit,the trade relationship between the UK and the EU will back to the original single market(no customs inspection,zero tariffs,service trade barrier-free,etc.)trade relationship under the WTO framework.When trading with the EU,the UK will be treated like other non-EU countries,accepting customs inspections and paying EU external tariffs.Hard Brexit means increased tariffs,customs inspections,and commodity inspections,which have led to higher trade costs.Besides,the UK will lose passporting rights after leaving the EU single market,of which financial passporting rights will be deprived as the main rights.The financial services industry accounts for about 7%of the UK's GDP,while the surplus generated by the financial services trade accounts for about 2%.The financial services exported by the United Kingdom to EU member states accounted for more than 40%of the total financial services exported by the United Kingdom(Lawless and Morgenroth,2019).The business will be hit by hard Brexit.In terms of the economic benefits of hard Brexit,the annual fee paid to the EU can be invested in the economic development of the United Kingdom to benefit the people of the country.It can also obtain an increase in external investment and increase market liquidity.
Tesco CEO Dave Lewis once told shareholders during the Brexit process that he will prepare for an unordered and non-agreement Brexit(Rosnizam etl.,2020).The company has established a long-term storage product reserve worth more than 200 million pounds to help it cope with the emergence of the problem of supply disruption.As the top three large retailers in the UK,Tesco is facing the problem of purchasing fresh food after Brexit without a deal.In the past supply chain,about 50%of the fresh food sold by Tesco was imported from the EU.The problem facing most British companies that outsources production in Europe is product reserves and finding new supply partners.
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