The German Industry Federation (BDI) on Tuesday called for “a Customs Union” between the EU and the UK to avoid the “horror” of a hard Brexit, said the President of the powerful lobbyist group, Joachim Land, who added that the minimum requirement for the agreement would include the duty-free trade of manufactured goods.
The proposal by the German industry is in line with the proposals put forth by Britain’s Labour opposition.
The group called on German Chancellor Angela Merkel to convene an urgent EU Summit next week that will commit to a transition period before the new arrangement comes into force. The BDI noted that many companies would be forced to activate contingency plans if it appears that the EU and UK are headed for a Brexit.
UK Chancellor Philip Hammond expressed optimism for the British economy in his Spring Statement on Tuesday. but ruled out an end to austerity. Britain’s economy will grow by 1.5% in 2018, which signals a slowdown for the economy amidst global economic acceleration. The forecast for 2019-2020 looks to be even more slugging, to the tune of 1,3%.
The UK went from being the fastest growing economy in the G7 three years to now competing with Italy as the slowest since it voted to leave the EU in June 2016.
Foreign Direct Investment in the UK has dropped by 90% since the Brexit vote and the UK is now Germany’s fifth biggest trading partner rather than its third as it was in 2016.