The East Midlands’ economy faces a multi-million pound blow in the event of a ‘no deal’ Brexit due to the collapse of international trade deals, the CBI is warning.
With the prospect of a ‘no deal’ exit from the European Union on 29th March appearing ever more likely, the CBI is highlighting the damaging implications for UK businesses of crashing out of the trade deals EU membership provides.
The UK currently benefits from extensive trade agreements as an EU member, spanning around 70 countries. The CBI estimates the total amount of global GDP covered by the EU and the countries it has trade agreements and partnerships with to be 37%.
In the East Midlands, exports to countries with EU free trade agreements are worth nearly £2.6 billion every year, accounting for almost 13% of the region’s exports. This figure equates to the annual salaries of 93,000 nurses.
Through these agreements, the East Midlands exports goods worth £500m to Turkey and £350m to Canada each year, with the machinery and transport sector among the most exposed.
If the UK leaves with ‘no deal’, these exports risk having immediate tariffs imposed overnight, potentially costing the East Midlands economy millions of pounds in lost orders.
Rick Blackmore, CBI East Midlands Regional Director, said: “If the UK leaves the EU without a deal, overnight businesses in the East Midlands could cease to enjoy the benefits of tariff-free trade with, and easy access to, crucial markets for products and services, from Canada to South Korea.
“Many firms are unaware it is not just their relationships with EU customers at risk from a no deal Brexit, but relationships across the globe.
“Individual businesses trading with markets outside the EU would face tariffs worth millions of pounds being slapped on them instantaneously. These trade deals span five continents and are vital for the smooth export of our goods and services.
“Exports to countries with EU free trade agreements are worth almost £2.6 billion to the East Midlands every year. The risk to these deals is an overlooked danger to our economy and yet another reason why no deal is not an option for the UK and jeopardises jobs in our communities.
“It is vital compromise is shown on both sides of the Channel and politicians work quickly to come to a deal.”