06:01 GMT +323 October 2018
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    Brexit

    German Exports Lobby Urges Against ‘No Deal’ Brexit as Sign of UK Strength

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    Germany’s Chambers of Commerce and Industry (DIHK) says a “hard Brexit” could pose significant risks to German exports into non-EU countries, as well as provoke unpredictable disruptions in international trade, amplified by the escalating trade spat between the US and China.

    Kristian Rouz – A key German lobby is urging the Merkel cabinet to reach a compromise with both Brussels and the UK on a Brexit deal, as Germany’s exporters expect tighter competition from their British counterparts in international markets.

    This hard Brexit scenario has become increasingly realistic after the EU voiced scepticism of UK Prime Minister Theresa May’s Chequers proposal.

    Germany’s export lobby, the DIHK, said a hard Brexit would cause disruptions in the trade ties between Britain and the continent – which could reflect negatively on the EU’s economic growth. Additionally, the DIHK warned of the possible negative effects to the global trading system.

    “The world trade system is ever more of joint,” DIHK president Eric Schweitzer said.

    German manufacturers said a no-deal Brexit could bring on an overhaul in international trade, with the UK redirecting most of its industrial exports toward non-EU markets – where Germany has a substantial presence.

    German industrial companies are particularly worried of the UK’s rising presence in the US amidst the ongoing speculation the Trump administration could strike a trade deal with Britain as soon as the latter leaves the EU next March.

    The Germans have recently had their hopes high that the trade war between the US and China could help them boost exports to the US – but the UK’s uncompromising stance on Brexit could thwart these expectations.

    “The politics of trade sanctions is taking on ever greater and sadder proportions for German companies operating abroad,” DIHK’s Schweitzer stressed. “Firms don’t know whether they will be hit by new tariffs.”

    However, Britain’s rising presence in international markets appears to be the only major concern for German companies. Aside from that, a flurry of new reports has suggested a hard Brexit wouldn’t have a significant impact to the EU labor market, nor would it impair the intra-union trade ties.

    On the contrary, a hard Brexit is expected to increase Germany’s presence within the EU in terms of trade and investment.

    Germany’s leftist Linke party said roughly 41,000 Britons were employed in Germany as of last December, and a hard Brexit could potentially create immigration issues for these workers. Linke added that this number was “insignificant” and that these workers could be replaced by an EU workforce.

    However, there are far more EU workers in Britain – some 2.29 million, mainly from Eastern Europe countries such as Poland, Lithuania, and Romania. Some of these people might be subjected to deportation or a lengthy immigration adjustment in the post-Brexit UK, meaning many of them could opt to just move to Germany.

    Moreover, a significant number of non-EU refugees have been stranded in the UK, largely due to the lack of border controls within the EU.

    Some German officials realize that a no-deal Brexit would be a challenge to the EU as well.

    “There will be no winner from Brexit, on neither side,” German Foreign Minister Heiko Maas said in an interview with the Rheinische Post. “We have always said we greatly regret Britain’s departure.”

    The German officials have rejected PM May’s Chequers proposal on Brexit in line with the EU’s joint position on the matter – and this might backfire on Germany in the form of a massive outflow of people from the British labor market next March.

    PM May criticized the EU’s lack of flexibility this past Friday, saying “a good relationship at the end of this process depends” on mutual respect.

    But Berlin reaffirmed its tough stance despite the risks posed by a no-deal Brexit.

    “The blame game against the EU is therefore more than unfair. We can’t solve the problems that are arising on the island due to Brexit,” Germany’s Deputy Foreign Minister Michael Roth said.

    With only six months remaining until the UK’s scheduled departure from the EU, the fate of Brexit remains up in the air – amidst escalating internal political and partisan struggles on both sides of the English Channel.

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