"Predicting the short-run effects of a chaotic no deal Brexit is much more difficult. The biggest costs would come not from moving to new regulatory arrangements for trade, but from a partial or complete breakdown of the regulatory arrangements that make trade possible at all. Aircraft could be grounded; British meat may not be certified as safe to enter the EU market; just-in-time production systems used by manufacturers and food producers could break down; border crossings on both sides of the channel could be gridlocked," the report stated.
The think tank added that these consequences could be averted with the help of new border infrastructure and regulatory agreements.
READ MORE: Severe Threat of 'No Deal' Brexit Talks Exists — Professor
The pharmaceuticals and healthcare would have to set up new approval systems for certain drugs that are currently only approved by the European Union.
"On top of this, questions remain concerning the extent to which the UK would, as a result of a chaotic Brexit, become a second or third priority launch market for drugs. The guidance indicates that in relation to orphan and paediatric drugs, the government will consider the use of ‘incentives’. However, uncertainties still surround future alignment with EU law in the area," the report said.
In August, UK Chancellor of the Exchequer Philip Hammond warned that a no-deal Brexit could drain 80 billion pounds (about $103 billion) from public finances.
