World Economy

Germans Say Brexit Worsening Trade With UK

Germans Say Brexit Worsening Trade With UKGermans Say Brexit Worsening Trade With UK

Brexit is already damaging Germany’s trade with the UK and it is set to get worse, the European powerhouse’s leading business group has warned.

The Association of German Chambers of Commerce and Industry, or DIHK,—which represents more than three million business and entrepreneurs—cautioned that even if the UK strikes a free trade deal with the EU, the impact of trade barriers would only be “reduced”—not completely neutralized, news outlets reported.

The warning comes as Brexit talks between the UK and EU appear on the brink of collapse as both sides want the other to make the first sign of compromise on the size of the divorce bill.

With fewer than 20 months before the UK officially leaves the EU, there is precious little time for delays to the negotiations, and if no deal is done then Britain will crash out of the trading bloc on World Trade Organization terms.

While the DIHK painted a pessimistic picture of future trade with the UK, the Italian Chamber of Commerce in the UK struck a more optimistic note, predicting that its country’s exports to Britain would not be drastically affected by the final Brexit deal.

But as trade with Germany is worth billions more than that with Italy (three times as much in exports, nearly four times as much in imports in 2015), the warnings from DIHK will heap further pressure on the UK government to secure as strong a Brexit deal with the EU as possible.

DIHK spokesperson Thomas Renner said: “Brexit will damage the German economy as a whole, despite some single locations or companies who might benefit from shifting jobs and investment from the UK or of a weaker British pound.”  

“Investment decisions will be affected too: a DIHK survey shows that 40% of German companies expect less trading with UK after Brexit and almost 10% plan relocations of investments from UK.”

Even before UK Prime Minister Theresa May triggered Article 50, exports from Germany to UK decreased by 3% in 2016, and one in ten German companies now plan to relocate investments out of Britain.


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