12/04/2022 09:51 (act. 12/04/2022 09:51)
Since Brexit, Britain has become less important to Germany ©APA/AFP
Britain is becoming less and less important as a trading partner for Germany after Brexit. This year, the UK will drop out of Germany’s top ten trading partners for the first time in recent history. This is the result of an analysis by the German company Germany Trade and Invest (GTAI), which is available to the German news agency dpa, in London.
Calendar and seasonally adjusted commodity exchange rates between January and October increased by 13.7% year-on-year, mainly due to inflation. However, all German foreign trade in goods increased by 20.7% over the same period. More recently, the Czech Republic overtook Great Britain in the ranking of most important trading partners. The advantage is “significant and can hardly be compensated in November and December”, commented the GTAI.
“The slow development of German-British foreign trade is not a new trend,” emphasizes the report. Since 2017 – the first full year after the Brexit referendum – the UK’s importance has steadily declined. At that time it was still the fifth most important foreign trade partner.
There were other reasons for Brexit. “Both the coronavirus pandemic, inflation driven by energy prices and the Bank of England’s reversal in monetary policy have thrown the British economic engine out of whack,” he said. “The consequences of Brexit amplify the effect because trade at the customs border has become more expensive”, says the GTAI. There is still uncertainty. “Nearly three years after Britain left the EU, the course of the country’s post-Brexit economic policy remains uncertain and is troubling British businesses.”
Britain left the European Union at the end of January 2020 and has also not been a member of the EU customs union and internal market since January 2021. The Brexit trade deal agreed at the last moment guarantees exemption from customs duties in most countries. areas. However, there are difficulties in commercialization due to increased bureaucratic requirements. The introduction of expensive and time-consuming work visas for skilled workers also makes cooperation more difficult.
According to the GTAI, the outlook for 2023 is also bleak, especially as the central bank believes Britain is headed for a long recession and companies are likely to be even more hesitant to invest. This affects the delivery of vehicles, industrial machines and chemicals, where Germany is one of the most important suppliers. “With the recession on the horizon, rising financing costs and an increase in the UK corporate tax from 19% to 25% in April 2023, there is no sign of a turnaround,” notes the report.
Of particular interest to German companies are some smaller sectors, which have developed much more strongly despite the economic problems. These included healthcare, offshore wind and infrastructure construction. The GTAI sees mixed signals from the important automotive industry, the most important pillar of German-British trade. If the British car market really does grow significantly in 2023, it could mean a turnaround, he said. Electric cars are a major factor, and the sale of new cars with classic combustion engines will be banned from 2030. The question here is whether Britain can build enough so-called gigafactories for battery production in a timely manner.