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Hard Brexit to cost UK manufacturers £17bn

Manufacturers throughout the UK will be hit by a £17bn fall in revenue following a hard Brexit, a new report has found.

The consumer goods sector, including fashion, would feel the impact with a £5.2bn loss in annual UK to EU export revenue.

According to Baker McKenzie report The realities of trade after Brexit, it would create a £17bn fall in annual EU export revenues across the consumer goods, automotive, technology and healthcare sectors.

UK exports would be hit at least four times harder than EU exports, as increases in tariff and non-tariff barriers could cost £3.8bn annually – leaving exports to key markets in need of a 60% increase in order to offset EU export losses.

Readers' comments (10)

  • Its heck of lot more than that, a lot of companies will close as result

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  • darren hoggett

    The report is all hypothetical. It cannot predict the future any more than the gypsy at the end of the pier and should be treated as such.

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  • @Darren Hoggett:

    Have you read the abstract? Certainly the report’s hypothetical, but modelling current export prices against prices under WTO rules is not long-distance weather forecasting. The report’s drama comes from its decision to model a scenario in which we exit with no trade deal — happily, an unlikely act of slow-motion economic self-harm.

    Otherwise, the report’s WTO model is hypothetical is the same way that a casino’s business model is hypothetical. Probability’s never certain, but it’s a lot more comfortable on the dealer’s side of the blackjack table.

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  • "A new report has found" yawn. Couldn't agree more with Darren, all of this is totally hypothetical, all the doom that was forecast hasn't happened, facts are different, employment is up and exports up over 11% since the vote. Never the less this is a long game, it's not about next year or even the next 5 years, the World has changed and if this country is to carry on growing and remain in the top 10 of the Worlds largest economies for the next 20/30 years then we need to look outwards, you only have to look at the growth of some of our retailers/e-tailers (Asos , Boo Hoo, Primark , Arcadia etc) that are now global due to looking to the Far East and Far West to see what happens when you expand out of your European comfort zone, of course they'll be pain but it will be worth the enormous long term gain.

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  • @ Rohan Moore
    As you point out the report is based on a Hard Brexit, so it's hypothetical.

    So hypothetically speaking we revert to WTO rules, having read the report i cannot see any mention that hypothetically speaking the UK Government reduces Corp Tax significantly as threatened and also offer's a whole raft of incentives to Industry eg as it did to Nissan. Bottom line is that leading EU companies do not want to see a drop in revenue so any sweetener to off set tariff's can be considered and acted on quickly to offer each individual company or for that matter offer each individual Country incentives capitalizing on the issues that already exist within the EU and blindsiding EU Commission or at least putting them under enormous pressure and making a rocky EU even more unstable. If we do have a Hard Brexit for whatever reason then i truly believe all the cards won't be with the dealer but on the table and to gain the better hand and within reason anything goes. Of course all hypothetical but perhaps worth writing a report on it.

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  • @Anonymous

    if this country is to carry on growing and remain in the top 10 of the Worlds largest economies for the next 20/30 years then we need to look outwards, you only have to look at the growth of some of our retailers/e-tailers (Asos , Boo Hoo, Primark , Arcadia etc) that are now global due to looking to the Far East and Far West to see what happens when you expand out of your European comfort zone

    International trade for ASOS and Primark is overwhelmingly Euro-centric. Less than 3% of Primark's square footage is outside of the EU, and they've no footprint in Asia at all. Neither of those retailers, and probably neither Boo Hoo nor Arcadia either, will be celebrating the 'new opportunities' presented by dissolving an existing complex trade agreement in a highly profitable market.

    The only internally consistent argument for exiting those agreements with Europe is to make an economic sacrifice for a more culturally familiar society — what's been described as 'the Japanese compromise'. The suggestion — encouraged by some high profile figures in the pursuit of personal political ambition — that there is no economic compromise, is not simply ideologically contentious. The problem is that 'new trading relationships' outside of Europe are widely touted as opportunities. China's often mentioned alongside the Anglosphere.

    Well, the problem here is that all potential new trading partners have different standards, regulations, tariffs, priorities and policies that underpin their domestic markets. China will not simply abandon its existing rules on textile trading and adopt the UK's. There will have to be compromises. Once there are compromises, there will need to be arbitrators to resolve commercial disputes. Once there are arbitrators, you're straight back into what Brexiters describe as 'a loss of sovereignty'.

    If the UK can't align on sufficiently favourable terms with its closest neighbours, its chances of improving its terms with much larger, and traditionally assertive, trading partners — such as the US, or China — are being overstated. Combined with the EU, it may have leverage; alone, it will have leverage only with small states. Even with the US, China has a reputation for demanding technology and knowledge transfers for access to its markets. What might it demand from the UK, with only a $20billion trade deficit at stake? The US's inability to dictate terms sits in the context of a $350billion trade deficit in China's favour.

    Trade deals = loss of sovereignty. This isn't ideology, it's just reality. If we've changed our minds and like trade deals — despite their impact on sovereignty — then we might want to consider keeping the enormous one we've already got a stake in. And within that trading bloc, we can negotiate with other awkward and much larger global trading regions with actual leverage.

    It the nation's committed to the Japanese compromise, then so be it: business will just have to adapt. But let's not kid each other that it's an economic opportunity. It's not. It's an opportunity for a more familiar society, at the expense of a less virile economy.

    all the doom that was forecast hasn't happened

    Neither has Brexit.

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  • The doom that was forecast was immediate if we voted out, not after actual Brexit, what's forecast after Brexit is Biblical.
    You've digressed the article was not about Brexiters and Sovereignty it was about growth and trade. 7 years the EU has been trying to strike a trade deal with India, 27 countries all with an opinion as to what's ok and what's not ok to give away depending on whether they have a vested interest. It took 9 years !!! for the EU to strike a deal with Canada only for it to be thrown into disarray at the last minute and still to this day it is being disputed by Poland who are threatening to block part of it. The retailers mentioned all have a foot and if not an eye on international markets , Asos has just opened up a warehouse hub in the US and Boo Hoo has only just begun in US when trad US retailers are dropping like fly's their innovative marketing approach is reaping rich reward , Arcadia are already exporting their Brand to India trading on many Indian E-tail sites and their international division has never been busier, i could go on . This is just the start , we are at the beginning, perhaps China isn't the right market yet, it's complex and Asos and other company forays into that market have proved costly. They aren't the only player in town, we are one country negotiating not 27, we don't have to worry about the other 27, the result of this is not a deal that takes 9 years !!!! For companies like Dyson and JCB this has never been about sovereignty, for most in business who voted out it's been about growth and jobs, the time is right and it;s now essential to do this, we have to look outwards, the bureaucrats of the EU continue to look inwards, of course we don't want to lose our EU trade but this isn't about them being close, we couldn't be father apart, half of them never wanted us in the first place, but they did want our money, they have to teach us a lesson, i'm afraid if we delivered billions and billions of gold bars to the door of the Barnier, GV, etc then they would still say no deal, they simply won't accept even a good deal for the EU. I'm pretty sure that both sides already accept this, the posturing from the UK is to show that at least we tried. Japan's economy continues to expand, the 3rd largest economy in the World, think we would except that ! 9 years for a Canadian deal that's still disputed and 7 years and counting for an Indian deal, not sure about closest neighbours more like neighbours from Hell!

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  • So much drivel from the anonymous Brexiter here, why you are not posting with your name? ashamed?

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  • @Kaka , why get personal, no one else has, you bring nothing and lose the debate.

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  • darren hoggett

    The terms 'Hard' and 'Soft' regarding BREXIT are delusional fantasy, usually used by Remainers and/or undemocratic Guardian readers.

    BREXIT is BREXIT. It isn't the Hokey Cokey.

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