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Chambers unite to urge speedy deal

German companies switch investment from UK

Liz Cameron

Liz Cameron: Germany remains an important investor (photo by Terry Murden)

German companies are switching investment away from the UK in anticipation of costly Brexit trade barriers.

A survey by the German Chambers of Commerce shows the outlook for those trading with the UK is worsening because of expected limits on the free movement of workers, higher taxes and tariffs, and more bureaucratic hurdles.

It has emerged that German exports to Britain are down by 3% and up by 6% to other EU countries as companies in Germany seek out new markets.

The findings have encouraged the British and Scottish Chambers of Commerce to unite with their German counterpart to urge Brexit negotiators to find a quick resolution to future trading relationships between the UK and the EU.

Martin Wansleben, chief executive of the Association of German Chambers of Industry and Commerce (DIHK), said: “Businesses are very concerned that Brexit will have a major negative impact.

“Not only it could lead to more trade barriers – additional bureaucracy, increased waiting time and stricter border controls resulting in higher costs.

“The terms of exit are still completely unclear. Many of our members are reporting that they are already shifting investments away from the UK in anticipation of these barriers.

“The first effects of the Brexit vote are already being observed: German exports to the United Kingdom were down by 3% in the first half of this year compared to the first half of last year, whilst exports to the EU increased with 6% in the same period.”

With the third round of Brexit negotiations under way, a number of business-critical areas that form part of the withdrawal agreement are yet to be resolved, including the rights of EU workers in the UK and UK workers in the EU27.

Additionally, there are hundreds of practical and technical issues, including customs arrangements and tax procedures, that need to be negotiated.

Businesses in both the UK and Germany want to see talks move on to these fundamental issues – and particularly customs concerns – as soon as possible.

Dr Wansleben said a transitional period would be helpful for business. This is backed by a British Chambers of Commerce survey which showed a strong preference for a transition period of at least three years. Both German and British businesses also want clarity at the start on the overall shape of the final destination settlement.

The United Kingdom is the third-largest market for German goods exports; in turn, Germany is the UK’s second-largest goods and services exports destination. German companies maintain about 2,500 branch offices in the UK, which employ nearly 400,000 workers. British companies have 1,200 branch offices in Germany, which employ about 220,000 workers.

Scottish Chambers of Commerce met with representatives of the German Chambers (DIHK) in March and discussed key issues including future trade, skills and investment. 

Liz Cameron, director & chief executive of the Scottish Chambers, said: “Germany remains an important investor and economic partner for Scottish businesses, acting as a major part of our exporting/importing supply chain.”  

Adam Marshall, director general of the British Chambers of Commerce, said: “The UK and the EU must begin work on transitional arrangements, particularly on customs, so that firms on both sides of the Channel have the confidence to make investment decisions.”



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