CIA, Cefic Urge Chemicals Trade Certainty after Brexit Trigger

Predictability needed to preserve trade as negotiation period begins

The Chemical Industries Association (CIA) has called on UK prime minister Theresa May to secure the best deal for the chemicals industry, following today’s triggering of Article 50 to start the Brexit process.

CIA chief executive Steve Elliott says the industry will continue to work with government and its partners across the continent to achieve this.

“In these negotiations, there is much more to unite the European chemical industry than divide us, with minimal disruption to our current trading relationships being our collective goal,” he says.

“I hope negotiations proceed smoothly and, while business needs certainty – and to some extent speedy resolution – we also urge patience in order to make sure we avoid a bad deal or no deal.”

Director general of Cefic, Marco Mensink, says that in the “difficult and sensitive” task ahead politicians on both sides must provide a signal as early as possible concerning how the EU and UK will trade in future.

“Certainty will help chemical companies adapt and continue doing business in a rational and predictable manner. Decisions about continued investment can only be made based on long-term predictability,” he says.

The UK has been a highly integrated part of the European chemical industry and manufacturers on both sides of the English Channel have benefited from the single market and open borders for decades, Cefic says. Other major industry sectors, like automotive and construction, heavily rely on chemical products for their business, it adds.

In 2014, the UK chemical industry represented about 9% of total EU-28 sales, while EU-27 exports to the UK were €22.3bn and imports were around €20.3bn, Cefic says.

Next steps
The UK government and EU officials will now begin formal talks. In May or June, negotiations with other EU countries are expected to start with a draft deal due by October 2018. After that, UK MPs, the European Council in Brussels and the European Parliament will each get a vote on any deal that has been agreed.

The negotiation period of two years can only be extended if all EU countries agree. If no consensus or extension period materialises by March 2019, the UK will automatically leave the EU with all existing agreements, as well as access to the single market, ceasing to apply.