Pro-Brexit politicians often state that Germany’s industrial power houses will apply pressure on Chancellor Merkel to encourage a strong trade agreement when the UK finally withdraws from the EU.
Due to the high volume of new cars that are both imported and exported, the automotive sector is regularly identified as being a sector with a strong interest in aiding Britain’s cause. Though recent comments from across the channel make that sound less likely.
Logic dictates that high tariffs and delays caused by rigorous customs checks at ports could present barriers to trade that no business leader would wish to see imposed. Therefore, it is hoped that German car makers will be willing and able to prevent these trade barriers. However, Matthias Wissmann, president of the German automotive association (VDA) says that walking away without an agreement would be “a dramatic own goal” for Britain and that the economic consequences would be worse for the British side, particularly as the supply chains would be disrupted by the end of the freedom of movement for goods.
It appears that the German car makers have followed EU politicians in stating that the integrity of the EU should be the highest priority for negotiations. Even if an unsatisfactory deal results in lower sales for their industry, stability across the 27 country trading bloc is of greater importance. They have around 100 production sites in the UK and Wissmann has previously warned that prolonged economic uncertainty will prevent further investment.
Talking about investment, “if there is a ‘hard Brexit’, then we will see a shift to central and south-eastern Europe.” He named countries such as Slovakia and Poland as being “very attractive” due to their EU member status and “low labour costs.”
Germany’s former chancellor Gerhard Schröder, also strongly disagreed with Mrs May’s claim that her robust negotiating skills will secure Britain a good Brexit deal. Speaking to a Swiss newspaper, he labelled the British as “crazy” on the basis that the Prime Minister “doesn’t have any bargaining chips.”
The automotive sector is a leading light within Britain’s manufacturing industry. It is very much hoped that the UK politicians can secure a favourable outcome when they eventually sit down with their European counterparts. Let’s hope their comments above are posturing before the tough talks begin. In the mean time, we’ve compiled some of the key stats relating to Britain’s car trade with Europe.
Read more… Brexit & the Motor Trade – Who has the most to lose?
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