Loss of access to the EU Single Market of 510M customers and the customs union would “condemn the manufacturing sector to a painful and costly Brexit”, according to the EEF.
It urged the government to clarify its position on the customs union and customs arrangements.
“Should the UK walk away with no preferential access to the EU or international markets in place, on day one of Brexit it would immediately find itself at a loss – with the UK’s manufacturing sector bearing much of the brunt,” claimed the EEF.
The organisation set out 10 reasons why no the position that no deal was better than a bad deal was unacceptable for manufacturers.
These included: loss of zero rate tariffs, reverting to higher World Trade Organisation (WTO) tariffs for exports and potentially higher WTO tariffs on imports. Read the full list below.
Impact on UK manufacturing
To mitigate the impact on UK manufacturing, the EEF wanted government to consult with manufacturers to set out the general approach, determine the right objectives and identify commercially significant issues spinning out from Brexit negotiations.
It called for any new customs arrangements to maintain ‘frictionless trade’ by preventing both tariff and non-tariff barriers from springing up and ensuring the UK could strike trade agreements with the rest of the world.
EEF ceo Terry Scuoler said: “The EU is our sector’s single biggest trading partner in a complex, tightly interwoven trading environment.
“Undermining the building blocks of this relationship – the single market and the customs union – without any other supportive structure in place would undoubtedly hurt our industry and condemn us to a painful and costly Brexit.”
The Food and Drink Federation (FDF) also called on the government to give more clarity on future trade deals with the EU.
‘Profound impacts for our industry’
An FDF spokesman said: “The prime minister has made clear that our existing trade arrangements will change when the UK leaves the EU. This will have profound impacts for our industry.
“As part of government’s approach to establishing our future trade policy, FDF alongside BRC [the British Retail Consortium] and the NFU [the National Farmers Union] has called on government to agree transitional arrangements that will maintain the frictionless trade in goods between the UK and the EU until an ambitious bilateral free trade agreement can enter into force.”
The statement from the three organisations warned against the UK operating in isolation from the EU and listed the measures it wanted the government to take to ensure a smooth transition in 2020.
The UK’s new relationship with the EU should be tariff-free, with minimal non-tariff barriers in place, suggested the Confederation of British Industry (CBI) in December.
CBI director general Carolyn Fairbairn said: “Firms of all sizes will want to understand how easy it will be for them to trade in the future with the EU, which remains the biggest market for British businesses.
“They need to know what rules they will be working by and how they can still secure access to skilled workers and labour, where shortages already exist.”