With the date for the United Kingdom (UK) to leave the European Union (EU) just months away, ICC has restated its position that the UK should seek the closest possible trading relationship with the EU to keep cross border trade as frictionless as possible.
In ICC’s view, this should mean staying with the Customs Union – and preferably the Single Market – for a transition period long-enough to manage the significant complexity of leaving the EU after 45 years and the world’s largest single market.
ICC believes this will require a transition period of between 5-10 years to minimise disruption in the UK, EU and the global trading system more broadly. Such an outcome would represent a win-win for both the UK and EU – and would provide much needed certainty for companies, of all sizes, trading internationally.
“The EU has 52 trade agreements covering over 70 countries and with economies as diverse as South Korea, Canada and Chile – and most recently Japan,” said Michael Rake, Chairman of ICC United Kingdom. “These are hugely complex agreements that each take five-seven years on average to negotiate and cannot be quickly replicated. It is therefore incumbent upon the UK government to be responsible and minimise the damage to businesses within the UK, the EU and those countries trading through the UK into the EU. And that means maintaining our position within the Customs Union and possibly the Single Market for a period long-enough to allow the agreements to be renegotiated. This period is certainly not shorter than five years and could be as long as 10 years.
“If the UK leaves the EU in a ‘hard’ Brexit scenario, with only World Trade Organization rules to fall back on, the disruption to the UK’s reputation and trading position could be potentially very damaging. It’s not in anyone’s interests for this to happen. In such a scenario, the only practical and responsible solution at this late stage in the negotiations is an extended transition within the Customs Union and the Single Market.”
The UK-EU trade corridor is one of the most sophisticated in world trade having been built-up over 40 years. The EU is the UK’s largest trading partner with exports of £274 billion in 2017 (44% of all UK exports – 54% if including all countries with an EU trade agreement) with UK imports from the EU valued at £341 billion in 2017 (53% of all UK imports).
With well over half a trillion pounds of trade at stake – and the jobs, investment and prosperity such a figure represents – ICC’s position is driven by the practical need to minimise the disruption inherent within the Brexit process.
ICC is the largest world business organisation representing over 45 million companies in over 100 countries. ICC United Kingdom represents the voice of UK business at inter-governmental level and the voice of ICC in the UK. ICC’s core mission is to make business work for everyone, every day, everywhere.