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VDMA: "The British must improve their Brexit offer"

Date

19 Sep 2018

Sections

UK in Europe

Frankfurt/Brussels, September 19, 2018 - The German mechanical engineering industry is calling on the UK to make greater concessions in the Brexit negotiations. The UK's current plans for future relations with the European Union are a basis for discussion, but they are not sufficient to avoid a disorderly withdrawal from the EU. "An agreement that undermines the integrity of the internal market and the customs union in the long term is by no means in the interests of European industry," says Thilo Brodtmann, Executive Director of the VDMA.

The mechanical engineering industry sees with much skepticism the British proposal to split up the freedoms of the internal market for the United Kingdom. "Free movement of goods and services goes hand in hand. For example, the sale of a machine usually includes services such as assembly and maintenance," stresses Brodtmann. The association is also sceptical about the UK's plans for a new customs procedure to allow Great Britan to leave the customs union and at the same time prevent a border between Ireland and Northern Ireland. "This would create a highly complex customs system that would not work in practice and would primarily serve the purpose of ensuring that hardliners in Britain do not lose face. Domestic sensitivities should not be the basis on which we build our trade relations for decades to come," says Brodtmann.

A disorderly Brexit without a follow-up agreement would have noticeable consequences for the German mechanical engineering industry. The great uncertainty in Great Britain would, in addition to concrete obstacles in customs clearance, lead to a considerable decline in capital investment. In the first half of 2018 (January to July), the United Kingdom was the fifth largest foreign market for industry with an export volume of 3.7 billion euros. However, the European Union is of the greatest importance for mechanical engineering: in the first six months of 2018, German mechanical engineering companies sold products worth 41 billion euros to other EU countries, which accounted for almost half of all exports in this period (86.7 billion euros).

The VDMA represents more than 3200 companies in the medium-sized mechanical and plant engineering sector. With 1.35 million employees in Germany and a turnover of 226 billion euros (2017), the sector is the largest industrial employer and one of 

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