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Officials have warned of huge financial losses unless a deal is signed before Britain leaves the transition period on December 31. And Germany’s car-makers say they would be among the losers once the dust had settled on a no deal departure.
There is a lot at stake for the economy on both sides of the Channel
Martin Wansleben, chief executive of the German Chamber of Commerce and Industry (DIHK), said: “For the automotive industry alone – which has the largest share of the trade volume between Germany and Great Britain – there is a risk of tariffs of at least £1.83billion in less than four months without an agreement.
“There is growing concern in the economy that the Brexit negotiations will fail.”
Auto industry chiefs called on the EU and the UK to reach an “ambitious free trade agreement without further delay”.
More than 20 organisations, including the German Association of the Auto Industry and the European manufacturers’ association Acea, issued a statement warning no deal would mean “combined EU and UK trade losses of up to £100billion by 2025”.
The Acea warned both sides would have to stick to World Trade Organisation (WTO) terms from January 1 next year unless a deal was reached.
This would mean a 10 percent import duty on cars and up to 22 percent for delivery vans and trucks.
The Acea said: “Such tariffs – far higher than the low margins of most manufacturers – would almost certainly have to be passed on to consumers, which makes vehicles more expensive, reduces choice and affects demand.”
They said these losses would be on top of the £92bn the industry recorded as a result of the coronavirus crisis.
Mr Wansleben said: “There is a lot at stake for the economy on both sides of the Channel.
“The Brexit uncertainties of the past have already left their mark.
“Since the referendum in 2016, German exports to the British island have fallen noticeably – from £81.5billion in 2015 to £72.3billion in 2019.”
He said the UK had slipped from third place to fifth place among Germany’s most important export markets as a result.
Mr Wansleben said: “The trend continues this year – and is exacerbated by the coronavirus crisis.
“Between January and July, German exports fell by almost 22 percent compared to the previous year.”
He said politicians should ensure they can “hold the EU internal market together, avoid tariffs, maintain transport routes and keep the bureaucracy in the exchange of goods as low as possible”.
But tensions between Britain and the EU have reached boiling point with a trade deal no closer to being signed amid increasingly bitter rhetoric.
Brussels has insisted it carries out negotiations in “good faith” after Boris Johnson told MPs he did not believe this was the case in the Brexit talks.
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European Commission chief spokesman Eric Mamer said: “We have a habit of not commenting on comments by third parties.
“But what I can say more generally is that I can point to our hundreds – literally hundreds – of international agreements signed with very, very different third parties of all kinds.
“And I think that they testify to – as I think you say in English – a rather splendid track record when it comes to carrying out negotiations in good faith, and indeed even concluding them.
“So what I would simply do is ask you to go and talk to those third parties with whom we have signed these agreements and further they will testify to the quality of our negotiation.
“And I think that Michel Barnier showed in the context of the negotiations on the Withdrawal Agreement that even on extremely complex and politically sensitive issues the Commission and indeed the EU negotiate in perfectly good faith.”
The Prime Minister was during an appearance before the Commons Liaison Committee whether he believed the EU was acting in good faith.
He replied: “I don’t believe they are.”
(Additional reporting by Monika Pallenberg)
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