These are concerning words coming from the European Union’s (EU) chief negotiator. A no-deal Brexit means a lot more friction than leaving with a UK/EU free trade agreement.
The most significant costs of a no-deal Brexit will be tariffs and quotas on EU goods coming into the UK, which will have to be paid by UK consumers. But a no-deal Brexit also means tariffs and quotas on UK goods going into the EU, which makes UK exporters even less competitive.
We already know that UK exporters will be hit with a cost shock selling goods into the EU due to new border requirements. But if tariffs and quotas come on top, the UK will become a very unattractive place for global companies to do business in Europe. The UK risks losing its competitive advantage as a European trading hub.
We know that the EU wants fair-competition and similar standards as part of the agreement, as well as access to the UK’s fishing waters. In return, the EU offers zero tariffs/zero quotas market access for UK goods.