27 March 2017

EurActiv: UK manufacturers urge May to drop threat of no Brexit deal

Britain’s manufacturers told Prime Minister Theresa May to drop her threat that she might take the country out of the European Union without a new trade deal, saying they would bear the brunt of trade barriers with the EU.

“The idea of being able to walk away empty-handed might be a negotiating tactic, but it would in reality deliver a risky and expensive blow,” Terry Scuoler, chief executive of EEF, Britain’s manufacturing lobby, said.

“The rhetoric from the UK government needs to focus instead on achieving a deal that will work for the UK and the EU.”

In the absence of a deal, trade between Britain and the EU would default to World Trade Organisation rules and tariffs.

The EEF said British manufacturing exports to the EU – such as cars, chemicals and machinery – could face tariffs averaging 5.3%. There was also the risk of other obstacles to trade through customs procedures and higher compliance costs.

Just over half of Britain’s manufactured exports, as measured by value, go to the EU. Many factories rely on goods and parts crisscrossing the bloc during production, leaving them particularly exposed to any increase in trade barriers.

In the meantime, the fall in the value of the pound has led to a surge in orders, with Britain’s factories growing at their fastest pace in more than three years. [...]

The EEF called for close consultations with the government on its Brexit strategy and said a transitional period to ease Britain into its new relationship with the EU was essential. [...]

Manufacturing accounts for about 10% of Britain’s economy. Companies in the much bigger services sector are also worried about their future access to the EU’s single market, especially in the banking industry. [...]

Full article on EurActiv

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