Following calls from EU leaders, post-Brexit trade talks have now been extended. With both sides wanting to secure a deal before the deadline, this news has given hope to many, and especially to businesses both in the UK and in EU countries.
According to UK business groups, it’s essential to find a solution that gives the desired results to businesses. Ideally, they want leader to strive for a deal with zero tariffs and zero quotas.
Who is most affected by the outcome?
Some types of businesses are more affected by this than others. For example, Wales is more dependent on EU exports than other parts of the UK with 61% of exports going to the EU, compared with 43% of the UK as a whole.
Additionally, other sectors like the automotive, dairy, meat, and manufacturing industries are more reliant on trade with the EU, so it’s important to secure a deal to protect these businesses.
Currently, goods from these industries and other can be sent to the EU without any tariffs or duty. Without a deal, it’s likely trade policies would follow WTO rules and businesses would have to follow tariffs that are already set at agreed levels.
The automotive sector is particularly reliant on zero tariffs, as car parts are usually sourced from various EU locations, imported, used to finish vehicles, and then exported again.
This sector employs over 14,000 people in Wales, along with many more in other areas of the UK. Toyota, which is based in Deeside, has already warned that it will be unable to compete with other European plants if tariffs are added to the price of cars being exported from the UK.
Furthermore, the aerospace and agriculture industries have given similar warnings over tariffs. A no-deal scenario could mean many businesses being unable to compete going forward.
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