German Chemical Industry Association Warns of a Hard Brexit

On the anniversary of the British application for Brexit on March 28, Utz Tillmann, chief executive of the German Chemical Industry Association (VCI), warned about the consequences of a hard Brexit for the
German chemical and pharmaceutical industries. Although the parties have reached agreement on the transition phase, a hard Brexit continues to be an option until a treaty is signed. The VCI has issued a
press release (only in German) on the topic.

If a hard Brexit scenario comes to pass, supply chains will be interrupted. At the same time, German
companies would face annual tariffs of about €200 million. Great Britain is one of Germany’s most important trading partners. In 2016, the industry sold products valued at almost €12 billion to Great Britain, some 6.7% of German chemical exports. Germany companies also imported products valued at € 6.4 billion, some 5.2% of German chemical imports. The VCI has published current statistics (in German only) on the trading
relationships.

In a position paper (only in German) The VCI called for:

• Waiving tariffs on chemicals and pharmaceuticals, regardless of a free trade zone, a customs union, or some other special relationship that is yet to be defined.
• Clear regulations, especially for technical barriers to trade (TBT), sanitary and phytosanitary measures (SPS), non-tariff trade barriers, the protection of intellectual property, and dispute resolution.
• An approach that ensures that trade controls between the EU and UK are as rapid as possible.
• Clear regulations on how EU property rights can be transferred into national UK law.
• Participation of Great Britain in a unified EU patent court system.

In general, says the VCI, strict environmental standards should continue to be harmonized in the EU27 and the UK. In this context, continued UK membership in the European Chemicals Agency (ECHA) would be
desirable. Tillmann sees a positive sign in a speech given on March 2 by Prime Minister May in which she showed openness to continued membership.

The ECHA Web site shows the effects of Brexit throughout the EU.

If you have any questions on this topic, please contact us at reach@kft.de.

<Twitter>

Der #Verband der Chemischen Industrie warnt vor hartem #Brexit und befürchtet die Unterbrechung von #Lieferketten und #Zollzahlungen in Höhe von bis zu 200 Millionen Euro.

German #ChemicalIndustryAssociation (#VCI) warns of a hard #Brexit and fears the breakdown of
#SupplyChains and payment of #Tariffs of up to €220 million.