Monday, February 11, 2019 9:20 am
Britain sees record trade deficit with EU
LONDON – The Latest on Britain's plans to leave the European Union (all times local):
In its last full-year as a member of the European Union, Britain recorded a record trade deficit with the bloc.
The Office for National Statistics said the country's trade in goods deficit with EU countries widened by 0.2 billion pounds in 2018 to a record 94.9 billion pounds ($122 billion).
That's a big number that is likely to concentrate minds on all sides of the Brexit discussions as Britain's March 29 date of departure nears.
The great worry is if Britain crashes out of the bloc without a trade deal that would put serious impediments including tariffs on EU-U.K. trade, which will damage both sides.
Seven of Britain's top 10 export markets are in the EU, with Germany second behind the United States. And seven of Britain's top 10 import markets are in the EU, with Germany on top of the pile.
Economists say a no-deal Brexit would affect more than 100,000 jobs in Germany that depend on trade with Britain, with the auto industry hardest hit.
The researchers at the Halle Institute for Economic Research said Monday they modelled what would happen if British imports from the European Union fell 25 percent due to lack of a negotiated trade arrangement.
Among the places with the most jobs at stake would be Wolfsburg in north-central Germany, where Volkswagen is headquartered, and the Dingolfing-Landau region in southern Bavaria, where BMW has manufacturing facilities. If Britain leaves the European Union without a trade deal, that would mean a 10 percent import duty on cars and car parts.
The authors cautioned the figures do not predict that many people would be laid off. German companies could put workers on shorter hours or find markets other than Britain.
Switzerland and Britain have finalized a deal to maintain their trade and economic ties as they are — whether or not Britain reaches a deal with the European Union over its exit from the 28-nation bloc.
The government of Switzerland, which is not an EU member, says the agreement "replicates the vast majority of the trade agreements with the EU that currently govern relations between Switzerland and the United Kingdom."
British International Trade Secretary Liam Fox and Swiss Federal Councilor Guy Parmelin, who heads the Federal Department of Economic Affairs, finalized the deal between their countries in Bern on Monday.
The accord follows a Swiss "Mind the Gap" strategy developed after British voters approved Brexit. It covers issues like free trade, public procurement, agriculture and the fight against fraud.
British Prime Minister Theresa May is seeking a compromise with opposition leader Jeremy Corbyn in hopes of securing a divorce deal with the European Union.
Justice Minister Rory Stewart told the BBC on Monday that differences between the two aren't as great as some suggest, but the government can't accept a customs union that would prevent Britain from negotiating trade deals with other countries. He says May's agreement can achieve "a great deal of what Jeremy Corbyn is interested in without taking away that option of having other trade deals."
Britain is due to leave the EU on March 29, but Parliament has rejected May's divorce deal. EU leaders have rejected any changes to the legally binding withdrawal agreement.
The impasse risks a chaotic departure that would hurt the economy.