Germany’s VCI urges chems to prepare for ‘hard Brexit’

LONDON (ICIS)–German chemical industry trade group VCI is calling on chemical firms to prepare for a “hard Brexit”, it said on Friday.

The Frankfurt-based group, which represents about 1,700 firms, launched the call as the EU and the UK have not achieved “tangible results” about the conditions of the UK’s exit from the EU, despite months of negotiations, it said.

“The likelihood that negotiations will fail is, unfortunately, increasing every day,” said VCI director general Utz Tillmann.

“It’s now high time for companies to prepare for a Brexit without an EU-UK exit deal”, he said.

A Brexit without a deal, or at least without an agreed transition period for the import and export of chemicals, will likely result in “chaos” in the exchange of goods between the EU and the UK, with trade possibly coming to a complete standstill, Tillmann said.

He added that the UK government’s “unilateral technical guidance” to affected firms on how to cope would not resolve the trade problems from a no-deal Brexit.

Tillmann went on to urge EU and UK negotiators to spare no effort to come to an agreement by October.

“For the chemical-pharmaceutical industry and its customer industries, it is extremely important to integrate the UK into the [Helsinki-based] European Chemicals Authority (ECHA),” he said.

Such integration should be included in guidelines on the future EU-UK relationship, he added.

Meanwhile, UK Chancellor of the Exchequer Philip Hammond warned that the UK chemicals industry stands to be among the worst hit in the event of a breakaway from the EU that reverts to World Trade Organization (WTO) rules.

The UK government has started to issue guidance documents informing players in different sectors what to expect in the event of no terms being agreed with the European Commission, and what steps they can take to prepare.

Guidance for the chemicals sector is expected to be issued in early September, according to UK’s chemical trade group the Chemical Industries Association (CIA).

Picture source:  Kurt Amthor/imageBROKER/REX/Shutterstock

Additional reporting by Tom Brown