Withdrawal from the EU: Bavarian companies want clarity on Brexit

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There is still no trade pact between the European Union and Great Britain. Companies are finally demanding planning security.

Reinhold Braun, managing director of
Sortimo
out
Zusmarshausen
, above all would like one thing: “Finally clarity.” Only: Clarity in relationship status is not exactly what the
I
and the UK have to offer. Negotiations on a trade pact have been dragging on for months. It has been unclear for months how things will continue after the end of the Brexit transition phase at the turn of the year. With an agreement or without it? And before that, there had been a tussle about leaving for years
Great Britain
from the EU itself. Braun says: “We have already gone for a tough five times
Brexi
prepared. But every company needs a perspective, a planning horizon. ”However, this has not existed for years. Braun says: “That takes any planning ad absurdum. We have already burned millions through the Brexit scenario. “

Sortimo is one of many medium-sized companies in the region that are eagerly awaiting what EU negotiator Michel Barnier and his British antagonist, David Frost, have not yet done. Sortimo is a specialist in vehicle equipment, stickers and workplace organization. Although production takes place exclusively in the domestic plant in the Augsburg district, the company is also active internationally. It has 1,300 employees worldwide. A joint venture in the
USA
, 25 importers around the world, nine subsidiaries in Europe. One of them – with 50 colleagues – is in Great Britain, Warrington, near Manchester. On the island, says Braun, Sortimo used to make 30 percent of sales. Now it is only around 20 percent.

BIHK survey: Brexit concerns companies

His company is in
Bavarian Swabia
one of around 500 companies that are loud
Chamber of Commerce and Industry
have active economic ties with Great Britain and Northern Ireland. These include, above all, automotive suppliers, mechanical engineers, but also grocers and freight forwarders. Some of them export goods or purchase goods from the island or, like Sortimo, have branches on site.

Will the UK and the EU still agree?

Image: Stefan Rousseau / PA Wire, dpa

What does the tussle between Brussels and London, which is testing the patience of everyone involved, with the perspective of local companies? According to a BIHK survey, almost every second company expects their business with the UK to deteriorate in 2021. Because of the unclear situation, 46 percent of those surveyed have already tried in vain to prepare for the time after the full Brexit and have invested considerable sums for it.

Horror scenario of a no-deal: truck queues in a constant traffic jam

Without a trade agreement, there will be tariffs and other trade barriers between Great Britain and the continent at the turn of the year. Because then the Brexit transition period will expire, during which – despite the UK’s exit from the EU on January 31 – everything initially stayed the same. The economy on both sides of the English Channel fears upheavals in the event of a no-deal Brexit. Everyone is familiar with the horror scenario of kilometer-long queues of trucks in constant traffic jams in front of the ports in Dover or Calais.

In Reinhold Braun’s experience, trading has long been made more difficult. And the already existing uncertainty alone leads to waiting times of up to eight hours at the Eurotunnel under the English Channel. Many British companies are now stocking up on goods again. After all, it is unclear what will happen if Great Britain leaves the internal market and the customs union after the EU. On the other hand, many freight forwarders, says Braun, no longer lead over there because they often have to return empty. It’s not worth it.

Boris Johnson and Ursula von der Leyen want to negotiate.

Image: Stefan Rousseau / PA Wire, dpa (archive image)

Trade volume with the UK is shrinking

Trade with the kingdom is shrinking. Throughout Bavaria, Great Britain is the sixth most important trading partner with an export volume of 12.5 billion euros. In 2019, 6.6 percent of all Bavarian exports went to the island. Since the Brexit referendum in June 2016, the trade volume has been falling continuously, according to the Chamber of Commerce. Great Britain was back then
Bavaria
second most important export market. From January to September 2020, Bavarian exports to the island fell again by 22.8 percent compared to the same period of the previous year – significantly more than the total corona-related decrease of 14.8 percent. Stefan Offermann, Chairman of the International Committee of the Schwaben Chamber of Commerce and Industry, says: “This shows how great the uncertainty in the domestic economy has recently been and gives an idea of ​​the consequences of an unregulated Brexit”.

A study by the Ifo Institute in Munich on behalf of the Munich Chamber of Commerce and Industry – before the corona pandemic – also showed that a hard Brexit could cost Bavaria 0.24 percentage points of economic growth in the long term, a loss of 1.4 billion euros in economic output.

According to the BIHK survey, around 80 percent of the companies see the greatest risks in the outstanding rules for the movement of goods, in the border controls and the pending customs bureaucracy. “Without a trade agreement, the same rules as with a third country outside the EU would apply to goods traffic with Great Britain,” explains IHK expert Offermann and warns at the same time: many companies that have so far only been active in the EU internal market have no experience ”. In Germany alone, which has no external borders with Great Britain, the tariff has been increased by 900 jobs due to Brexit.

For example, what flowers the expected chaos produces, was recently in the Observer to read. According to a report by the newspaper, the British government is planning to fly in the corona vaccine recently approved in the country by the Mainz company Biontech and its US partner Pfizer by military aircraft. This is to prevent the longed-for remedy from falling victim to the feared permanent congestion at the borders.

A decision has to be made, says managing director Braun. “Better an end with horror than horror without end.” (with dpa)

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