The east of England economy is facing a multi-million pound blow in the event of a ‘no deal’ Brexit due to the collapse of international trade deals, an industry group has warned.
With the prospect of a ‘no deal’ exit from the European Union looming as the March 29 deadline approaches, the Confederation of British Industry (CBI) is highlighting the damaging implications for UK businesses of crashing out of the trade deals EU membership provides.
The UK currently benefits from extensive trade agreements as an EU member, spanning about 70 countries. The CBI estimates the total amount of global Gross Domestic Product (GDP) covered by the EU and the countries it has trade agreements and partnerships with to be 37 per cent.
In the East of England, exports to countries with EU free trade agreements are worth more than £4 billion every year, accounting for more than 10 per cent of the region’s exports. This figure equates to the annual salaries of more than 114,000 teachers.
Through these agreements, the East of England exports goods worth £570m to Turkey and £350m to Canada each year, with the machinery/transport and chemicals/pharmaceuticals sectors among the most exposed.
If the UK leaves with ‘no deal’, these exports risk having immediate tariffs imposed overnight, potentially costing the East of England economy millions of pounds in lost orders.
Richard Tunnicliffe, CBI East of England regional director, said: “If the UK leaves the EU without a deal, overnight businesses in the East of England could cease to enjoy the benefits of tariff-free trade with, and easy access to, crucial markets for products and services, from Canada to South Korea.
“Many firms are unaware it is not just their relationships with EU customers at risk from a ‘no deal’ Brexit, but relationships across the globe.
“Individual businesses trading with markets outside the EU would face tariffs worth millions of pounds being slapped on them instantaneously. These trade deals span five continents and are vital for the smooth export of our goods and services.
“Exports to countries with EU free trade agreements are worth more than £4 billion to the East of England every year. The risk to these deals is an overlooked danger to our economy and yet another reason why no deal is not an option for the UK and jeopardises jobs in our communities.
“It is vital compromise is shown on both sides of the Channel and politicians work quickly to come to a deal.”
The share of EU trade benefitting from reduced trade barriers is estimated to reach 40 per cent in 2019
The EU and the countries it has trade agreements with cover 32 per cent of global GDP. If you include countries with whom the EU has agreements partly in place, the figure rises to 37 per cent.
About the CBI: Across the UK, the CBI speaks on behalf of 190,000 businesses of all sizes and sectors. The CBI’s corporate members together employ nearly seven million people, about one third of private sector-employees. With offices in the UK as well as representation in Brussels, Washington, Beijing and Delhi, the CBI communicates the British business voice around the world.