What would Brexit mean for UK manufacturing?

What would Brexit mean for UK manufacturing?

We’ve recently seen a lot of news stories and information regarding the implications for the U.K should we decide to leave the European Union. When we click on a story with an image of Boris Johnson and David Cameron looking extremely awkward together we read what might happen to our relationship with other countries, immigration policies and also what I am going to talk about in this blog post, our manufacturing.

Firstly we must consider that at this moment in time The EU is currently Britain’s biggest trade partner. More than 50% of the UK’s exports go to the EU. So it could easily be argued that manufacturing output could be affected by a lesser level of access to the European market. This is a vital point when you consider that currently the European market is Britain’s most vital trading partner. The counter argument to this of course is that withdrawing from Europe, the UK would free itself of the many EU rules and regulations, and tap into markets such as Brazil and India. The belief here is that our strong manufacturing traditions would see us strike up new partnerships around the world and be less reliant on the EU.

EU regulations is another important factor in discussions on a possible Brexit. At the moment Manufacturing is highly regulated, and most of this regulation emanates from Brussels. Those who believe Britain should leave argue a post-EU UK would be less constrained by red tape, thus allowing our manufacturing industry to thrive. Indeed you regularly hear Mr Farage commenting on how everything needs to be run past Brussels first, and UK laws and regulations should be decided in the UK. However, if Britain were to leave, and then wants to do business with the EU, won’t it have to comply with EU regulations in order to do so, but in circumstances where it can no longer negotiate, influence or challenge those regulations?

If Brexit were to happen, many experts believe there would be significant period of uncertainty, which is a worry to many manufacturing companies. Without the EU behind it, how would Britain fare at the negotiating table when doing trade deals with non-EU countries? According to www.dlapiper.com The EU currently has 23% of world GDP – the UK only 3.5%. The US has said it is not interested in a UK-US free trade agreement. On the flip side, many believe this to be scaremongering, insisting that large companies will still trade and invest in UK manufacturing as the UK is the EU's single largest trading partner and fifth largest world economy. Their attitude is we will be fine on our own, with our own power to negotiate deals that are best for Britain, without the red tape.

There are powerful and convincing arguments from both the pro and anti-Brexit camps. Do we remain as we are, with solid relationships already formed with the EU, and continue to build and grow with our European partners? Or do we take a leap of faith, free from the red tape some see us as constrained by, and try and forge new partnerships with faster emerging markets from around the world? One thing that can be certain is a massive amount of uncertainty. The question is, should Britain bite the bullet and Brexit?

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