"Avoid no deal catastrophe" warn Ceemet & Make UK, calling on EU27 to work with UK

10 April 2019

CEEMET_brexit-report_cover

Industry groups representing manufacturing companies across Europe have today written to EU27 leaders pressing them to work with the UK Government to avoid a catastrophic no deal Brexit – and the economic damage it would bring to British firms, as well as businesses & workers throughout the EU.

In a joint letter sent today to each of the EU27 member heads of state and Chief Negotiator, Michel Barnier, Make UK and Ceemet warn of the risk of economic shocks if negotiators fail to agree a deal that works for business in both the UK and the European Union.
 
Ceemet and its national member organisations, Make UK’s sister organisations in Europe, representing over 200,000 manufacturers large and small across the continent, stressed that lack of coherent preparation from the UK and the EU has left Europe’s manufacturers woefully unprepared for a cliff edge scenario.
 
For the last 40 years, the levels of integration in complex supply chains would mean simply returning to World Trade Organisation (WTO) terms would be extremely damaging, as they rely on smooth transit across borders between all EU countries and the UK.

Many European manufacturers’ products, including medical equipment and other essential components, are currently tested in UK specialist testing centres. Knowledge and data transfer, which is integral to business, currently automatically passes across the Channel and professional qualifications are mutually recognised.
 
All this would come to an end in the event of a no deal Brexit.
 
Ahead of releasing the powerful statement today (Wednesday 10th April), Ceemet Director General, Uwe Combüchen said: “EU and UK Governments have a responsibility to ensure minimal disruption for businesses, for employers and employees. That is why companies across Europe want to see no deal taken off the table and politicians on both sides to facilitate a deal which all sides can agree to.
 
“The unintended consequences and economic collateral damage arising from a failure to agree an orderly exit do not bear thinking about.”
 
Stephen Phipson, CEO of Make UK added: “It is unthinkable that we are just two days away from the deadline where the UK could crash out of the EU without a deal in place. How our Government could have let this happen is beyond belief.

CEEMET lettter_Uwe Combüchen, CEEMET DIRECTOR GENERAL

 

CEEMET lettter_stephen-phipson-CEO-Make-UK

“For the last two years manufacturers have called for clarity. A no deal will decimate manufacturing in both the EU and the UK. There will be no winners unless a deal is found. If that proves impossible then we have already made clear we think the Government must act decisively to pause the process and revoke Article 50 so we can reflect on the best solution.”

Just a few days ago, Make UK also wrote to the UK Prime Minister and Leader of the Opposition, calling on them to revoke Article 50 if deal can't be agreed this week.

Full text of Ceemet & Make UK's letter:
Dear Permanent Representative,
Cc Article 50 Counsellor,

Ceemet, representing over 200,000 companies across Europe, the majority of which are SMEs, employing 35 million direct and indirect employees, has since the 2016 referendum held the belief that the future of Europe’s manufacturing sector is best serviced by a close relationship between the EU and the UK. Furthermore, we have continued to warn of the risk of economic shocks if negotiators fail to agree a deal that works for business on both sides of the channel.

While Ceemet recognises the preparations the EU and the UK have made towards mitigating the damage from a no deal exit, it must be clear that neither the EU nor the UK are ready, and as a consequence European industry is also not adequately prepared, for this cliff edge scenario.

When commentators suggest that in the event of no deal the EU and the UK could simply return to trading based on World Trade Organisation terms, they significantly underestimate the level of integration over the last 40 years, not just in trade relations but in areas which help make trade work, including fully integrated supply chains. Companies are currently able to sell product into the EU which has passed safety testing and regulatory certification in the UK; knowledge and data transfer, integral to business, currently automatically passes between the EU and UK; and employees currently in roles across the EU can use both EU 27 and UK academic and professional qualifications to work with minimal disruption in all EU Member States.

The integrated complexity of the just in time supply chains of both EU and UK companies relies on smooth transit at international borders. The UK and the EU must work together to mitigate any impact on trade and ensure a common approach to trade policy.

In a no deal scenario, manufactured goods sold in the EU will have to undergo regulatory and product testing in the EU. Certificates issued by UK notified bodies will not be valid, requiring files and data to be transferred to another EU Member State. In a no deal scenario, data flows will rely on a suitable ‘adequacy decision’ being in place.

In a no deal scenario, UK academic and professional qualifications, currently recognised across the EU, would no longer be automatically valid for professionals working in the EU. Travel for business will also be subject to new visa mechanisms and the demonstration of entry requirements (such as the proof of social security payments, health care access arrangements etc.) will be required and vary across every single individual Member State.

These are just a handful of the complexities in the relationship between the EU and the UK which have not been addressed in the event of a no deal exit. It is much more than selling a good across a border. It’s the product manufacture, sale and after-sale lifecycle that will be damaged both in the UK and the EU.

For these reasons and many more we call on the EU and the UK to work together on real world solutions to no deal preparations and urge the EU 27 to work with the UK to ensure the no deal scenario which is so detrimental to all is not allowed to happen.

Ceemet, representing over 200,000 companies providing quality employment to 35 million people, share industry’s concerns with you and seek a structured and constructive discussion going forward.

Yours sincerely,

Uwe Combüchen, Ceemet Director General
Stephen Phipson, CEO, Make UK, the manufacturers’ organisation


About Ceemet
Ceemet represents the metal, engineering and technology-based industry employers in Europe, covering sectors such as metal goods, mechanical engineering, electronics, ICT, vehicle and transport manufacturing.

Member organisations represent 200,000 companies in Europe, providing over 17 million direct and 35 million indirect jobs.

Ceemet members are : WKÖ (Austria), Agoria (Belgium), BBKMB (Bulgaria), HUP (Croatia), Dansk Industri (Denmark), Teknologiateollisuus (Finland), UIMM (France), Gesamtmetall (Germany), MAGEOSZ (Hungary), Federmeccanica (Italy), Assolombarda (Italy), Masoc (Latvia), LINPRA (Lithuania), FME (The Netherlands), Norsk Industri (Norway), ANEME (Portugal), Confemetal (Spain), Teknikföretagen (Sweden), MESS (Turkey), Make UK (UK) and AI Group (Australia).


About Make UK
Make UK, the manufacturers’ organisation, is the representative voice of UK manufacturing, with offices in London, Brussels, every English region and Wales.

Collectively we represent 20,000 companies of all sizes, from start-ups to multinationals, across engineering, manufacturing, technology and the wider industrial sector. We directly represent over 5,000 businesses who are members of Make UK. Everything we do – from providing essential business support and training to championing manufacturing industry in the UK and the EU – is designed to help British manufacturers compete, innovate and grow.


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