On December 31, 2020, the transition phase, during which Great Britain was still a member of the EU internal market and the customs union, ended. The last-minute deal between the EU and the United Kingdom has been in effect – initially provisionally – since January 1, 2021. This prevents tariffs and gives hope for the development of the future relationship.
According to the Ulm Chamber of Commerce and Industry, the breakthrough in the negotiations for a trade agreement with Great Britain does not make regional companies rejoice, but at least breathe a sigh of relief: this agreement has just averted the introduction of tariffs on the home straight. Nevertheless, by leaving the EU after almost fifty years, Great Britain is also saying goodbye to the common EU rules and standards, even if these still apply (temporarily) in isolated cases. In addition, there is now a higher administrative burden for companies trading with the United Kingdom due to the handling of goods for import and export. This means a new and additional burden for the company as well as higher costs. Therefore, from the IHK’s point of view, despite the agreement, Brexit will not remain without consequences for economic relations, which also have a long tradition for numerous regional companies. Great Britain will remain important as a trading partner even after leaving the European Union.
“I am happy about the last-minute agreement, even if it can only be a first step towards putting the mutual trade relations on a stable basis. It is now important to look ahead and focus on the opportunities of economic cooperation in order to shape the future positively and successfully together with our British business partners and customers, “says Horst Wiedenmann, managing partner of the family company Wiedenmann GmbH from Rammingen and Chairman of the International Committee of the Ulm Chamber of Commerce. His company is very active in the UK, so he emphasizes the enormous importance of business relationships and the UK market for domestic products and services: “The UK is a huge market right on our doorstep. We must continue to be able to use this as simply as possible! “
The trade figures underline the importance of relations with the UK, even if they have already declined in recent years due to the looming Brexit. The trade volume between Germany and Great Britain was around 117 billion euros in 2019. The United Kingdom was Germany’s eighth largest trading partner. Three years ago, the British even ranked fifth. Last year, the negative trend in economic relationships – accelerated by the corona pandemic – continued. The automotive, machinery and chemical products sectors are hardest hit by the decline. Exports from Baden-Württemberg to the United Kingdom from January to September 2020 amounted to 6.5 billion euros. That was 20 percent less than in the same period last year. This makes the United Kingdom the seventh largest foreign trade partner for Baden-Württemberg.
“In order to put the diverse economic relationships of the member companies of the Ulm Chamber of Commerce and Industry with Great Britain on a secure basis, politicians must now work on the successful implementation of the agreement and, moreover, strive for a framework that offers all those involved a secure long-term opportunity for economic exchange” , says Max-Martin W. Deinhard, General Manager of the IHK Ulm.
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