Non-EU exports worth millions to South West firms at risk if no deal Brexit takes place, warns CBI

February 22, 2019
By

The CBI today issued another dire warning of the likely effects on the South West’s economy of leaving the EU without a deal – the potential loss of global export orders worth millions of pounds.

The business organisation highlighted what it said would be the damaging implications of crashing out of the trade deals EU membership provides. 

As a member of the EU, the UK benefits from extensive trade agreements with around 70 countries.

Exports to countries with EU free trade agreements are worth nearly £2.4bn a year to the South West economy, the CBI estimates – equivalent to almost 12% of the region’s exports.

Through these agreements, the South West each year exports goods worth £365m to South Korea and £330m to Turkey.

The CBI said if the UK left with no deal on March 29, these exports risk having immediate tariffs imposed overnight, potentially costing the South West economy millions of pounds in lost orders.

The machinery and transport sector – which includes key industries for the region such as aerospace and automotive – would be among the most exposed if tariffs were introduced.

CBI South West regional director Deborah Fraser said: “If the UK leaves the EU without a deal, overnight businesses in the South West 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 were worth almost £2.4bn to the South West every year, she said.

“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.”

Last month the CBI – which was a staunch supporter of remaining in the EU – said leaving the without a deal would hit the region’s output by a staggering £13bn a year, the CBI said today.

It teamed up with aerospace giant Airbus, which employs around 4,000 people in its UK wing design centre at Filton, to deliver the warning. Days later Airbus chief executive Tom Enders voiced his own fears about the impact of a no deal departure – including switching future investment away from its UK plants.

The CBI’s latest warning comes days after Japanese car giant Honda announced plans to axe its manufacturing plant in Swindon in 2021 with the loss of all 3,500 jobs – although the car maker, which has also hit out at the possible impact of a no deal Brexit, said it leaving the EY was not to blame for the closure.

 

 

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