As an accidental “no deal” cliff-edge on 29th March
becomes more likely, the CBI has sounded the alarm on an
“overlooked” aspect of Brexit - the hugely damaging implications
for the UK of crashing out of trade deals it belongs to through
membership of the EU.
The UK currently benefits from 40 trade agreements
spanning five continents, as a member of the EU. The CBI
estimates the total amount of global GDP covered by the EU and
the countries it has trade agreements and partnerships with to be
37%.
John Allan CBE, CBI President,
said:
“If the UK leaves the EU without a deal, we could
cease overnight to enjoy the benefits of tariff-free trade with,
and preferential access to, markets of fundamental importance for
British products and services, from Japan to
Turkey.
“Many British firms are unaware that it’s not just
their relationships with EU customers at risk from a no deal
Brexit, but relationships across the globe. From rapidly growing
creative firms trading with South Korea to specialist machinery
firms trading with Mexico, these EU Free Trade Agreements have
supported firms of all sizes to grow and could be lost
overnight.
“Despite the hard work of ministers and officials to
ensure this does not happen, the consequences are serious.
Individual businesses in every corner of the UK that trade with
markets outside Europe would have tariffs worth hundreds of
millions of pounds slapped on them instantaneously. Car companies
risk being dropped from complex global supply chains that support
these deals, and services firms risk losing vital protections
that allow them to operate abroad.
“And by no longer being part of the EU’s trade deals,
the UK will miss out on golden trade opportunities that have been
years in the making. Indeed, these trade deals – spanning five
continents – form the bedrock of our exports.
“This looming danger has been widely overlooked and
is yet another reason to add to the lengthy list of why no deal
is not an option for the UK economy, and is a great risk for jobs
in local communities. It is critical that compromise on both
sides of the Channel is shown and that politicians work together
quickly to come to a deal. With the UK remaining a member of
these deals throughout the transition period, we will then have
the necessary time to focus on getting the trade deals that will
lie at the heart of the UK’s future prosperity
right.”
06 February 2019
Notes to Editors
Important facts:
-
The share of EU trade benefitting from reduced
trade barriers is estimated to reach 40% in 2019
-
The EU and the countries that it has trade
agreements with cover 32% of global GDP. If we include
countries with whom the EU has agreements partly in place, the
figure rises to 37%
-
UK exports to countries the EU has trade agreements
with increased significantly after they came into
force:
-
UK trade with Canada grew by 14% in the first
12 months of CETA being implemented
-
UK exports to South Korea grew by 67% in the
five years after the EU-South Korea free trade agreement
was signed
-
The EU-Japan deal would have added £3 billion
to the UK economy in the longer term
-
Exports of whiskey to South Korea are worth £71
million annually. Under WTO rules, 20% tariffs would apply,
worth £14 million annually.
