No deal Brexit will hit chemicals sector hard, government warns

Article by Adam Duckett

THE UK Chancellor has warned that the chemicals sector will be one of the hardest hit by a ‘no deal’ Brexit.

The EU and UK have until March to negotiate a withdrawal agreement from the EU and a framework for their future relationship. With time running short, the UK government has outlined which sectors are expected to be most affected if the deadline passes without an agreement being reached and has started to release guidance on what businesses need to do if there is a ‘no deal’ Brexit.

In a letter dated 23 August, UK Chancellor Philip Hammond said under a ‘no deal’ scenario “chemicals, food and drink, clothing, manufacturing, cars, and retail were estimated to be the sectors most affected negatively in the long run, with the largest negative impacts felt in the North East and Northern Ireland”.

He added that if there is a ‘no deal’ Brexit, where trade with the EU would fall under WTO rules with higher tariffs, national borrowing could rise by £80bn per year by 2033-34, though throughout the letter he repeats that the government is confident that a withdrawal agreement will be reached.

Brexit Secretary Dominic Raab has reiterated that a ‘no deal’ Brexit is unlikely but in the interests of planning for all possible outcomes announced that the government is publishing 25 technical notices throughout August and September on how businesses and individuals should prepare.

In response, Steve Elliott, CEO of the Chemical Industry Association (CIA), said that it is reassuring that the government is addressing the consequences of a ‘no deal’ Brexit and that he anticipates technical notices more specific to the chemicals sector will emerge in early September, such as chemicals regulation, environmental standards, energy and export control regulation.

“We will of course continue to play our part in engaging with EU27 chemical businesses; national governments and the European institutions to secure a Withdrawal Agreement, transition period and new relationship - hopefully rendering any ‘no deal’ scenario redundant,” Elliott said.

The government’s technical notices are being published here:

Article by Adam Duckett

Editor, The Chemical Engineer

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