ZVEI evaluates last minute agreement on Brexit positively

• But: Implementation of the new rules must succeed quickly

The agreement on Brexit reached between the European Union and the United Kingdom is to be assessed positively overall for both sides. "It is good that the negotiating parties have reached a trade agreement after a tough struggle," said Wolfgang Weber, Chairman of the ZVEI Executive Board. "However, this can only be a short breather. The new rules must be implemented as quickly as possible in order to avoid unnecessary damage to people and the economy – both in the EU member states and in the UK. Especially in competition with the USA and China, and, in view of the new free trade zone in Asia, we must position ourselves confidently and powerfully".

Despite the agreement, trade between the EU and the UK is expected to suffer damage in the long term. "Key customer of the electrical industry such as aerospace, automotive and medical technology are already reducing their investment in Britain. In the remaining business there is a need to switch from genuine just-in-time delivery to delivery with stockholding, as bureaucracy and recurring problems with border clearance have to be considered permanent obstacles", Weber said.

With 9.8 billion Euros in 2019, Great Britain was the eighth largest export market of the German electrical industry. This contrasted with an import volume of electrical and electronic products of 4.2 billion Euros. In the current year 2020, German electrical deliveries to Great Britain have so far fallen by 16 percent. Although the Corona pandemic is one of the main reasons for this slump, uncertainty about the outcome of the Brexit negotiations also played a role, as total industry exports fell less than half as much over the same period. In the years 2013 to 2017, the UK was still consistently in fourth place in the German electrical and electronic industry's export customer ranking. By the end of this year, the country is likely to drop further to ninth position.