Essential EU-UK trade accord
January 29, 2020 - If Britain fails to secure a trade deal after leaving the EU’s customs union -- which allows the circulation of goods without duties -- UK tariffs could be added to more than €47 billion of EU goods.
The EU, taken as a whole, is the UK’s largest trading partner. In 2018, UK exports of goods to the EU were £172.2 billion (€195.2bn) or 49.3% of all UK exports. UK imports from the EU were £265.7 billion (€301.2bn) or 54.3% of all UK imports.
Now, an analysis by Bloomberg’s Demetrios Pogkas and Jeremy Scott Diamond has found that of the €301.2bn of goods exported to the UK in 2018, roughly €47.3bn (16%) could attract UK tariffs if London and Brussels fail to map out a trade agreement. The total of added costs for EU products would run up to almost €5bn.
Germany faces the most significant blow, with €18.8bn of its exports to the UK potentially subject to tariffs. In 2018, Germany shipped €17.5bn of autos to the UK which could face tariffs from 10 per cent to 16 per cent, adding €1.8 billion to the cost of trading.
Last September, 23 automotive associations including the European Automobile Manufacturers Association joined forces to stress the impact a “no trade deal” Brexit would have on carmakers.
The EU’s automotive industry produces 19.1 million vehicles per year and employs 13.8 million people. Other sectors that would be most affected are textiles and clothing, meat and dairy, and ceramics.
While the UK’s tariff rates and quotas are a direct threat to the EU, Brussels has its tariff schedule that would apply to British goods. It appears to hold the upper hand in the upcoming negotiations as Britain is far more dependent on trade with the EU than the other way around.
Graphic News Standards