Responding to International Trade Secretary Liam Fox’s speech, the Institute of Directors has urged Government to consider a trade arrangement with the EU that would balance the need to minimise costs for manufacturing with the ability to sign new trade agreements with the rest of the world.
Commenting on the speech, Allie Renison, Head of Europe and Trade Policy at the Institute of Directors, said:
“We believe that the Government can square the circle between pursuing its own independent trade deals with third countries and ensuring businesses in the UK face minimal barriers to trading with the EU. Keeping tariffs on industrial goods aligned with the EU would still allow plenty of negotiating capital for future trade deals, including with the US, while ensuring companies avoid costly rules of origin that could jeopardise foreign investment into UK manufacturing and disrupt the UK’s integration within European supply chains.
“Unlike Turkey, the UK’s trading ambitions are much more developed as well as often being in line with the EU’s. Many countries the UK wants to strike new deals with after Brexit have already expressed their own reciprocal interest. Combined with the fact that Brussels is already moving to improve Turkey’s formal input into the limited areas where the EU’s tariff preference changes are also extended to it, it is unlikely that the problems of asymmetry, a key drawback for Turkey currently, would apply in the same way to the UK.
“It is essential that the Government comes forward regardless with a plan to ensure British companies are not detrimentally impacted by applying costly country of origin requirements to UK-EU trade, which could render a tariff-free deal with the EU meaningless for much of UK manufacturing. Without at least a partial customs union, it is unclear how this could be achieved.”