Two influential trade bodies in the manufacturing industry have warned the European Union the sector is “woefully unprepared” for a no-deal Brexit.
In a letter sent to each of the 27 EU heads of state as well as the bloc’s chief negotiator Michel Barnier, Make UK and Ceemet called on leaders to work with the British government to avoid no-deal.
Make UK and its European sister organisation Ceemet represent more than 200,000 manufacturers, supporting 35m jobs.
Stephen Phipson and Uwe Combuchen, Make UK and Ceemet’s respective chiefs, wrote: “While Ceemet recognises the preparations the EU and the UK have made towards mitigating the damage from a no deal exit, it must be clear that neither the EU nor the UK are ready, and as a consequence European industry is also not adequately prepared, for this cliff edge scenario.
“The integrated complexity of the just in time supply chains of both EU and UK companies relies on smooth transit at international borders. The UK and the EU must work together to mitigate any impact on trade and ensure a common approach to trade policy.
“It is much more than selling a good across a border. It’s the product manufacture, sale and after-sale lifecycle that will be damaged both in the UK and the EU.”
The International Monetary Fund (IMF) yesterday warned a no-deal scenario could push the UK and the EU into a two-year recession.
The UK economy will grow by less than previously thought even with a deal, the Washington-based organisation predicted, as it slashed its growth forecasts for all of the world’s advanced economies amid a global slowdown.
A no-deal outcome that led to severe border disruptions and a quick erection of tariffs would cause UK GDP to fall by 1.4 per cent and 0.8 per cent in the first and second years, according to the organisation. The EU’s GDP would be 0.2 per cent and 0.1 per cent lower in such a scenario.