This column first appeared in the Journal on 02/10/2020.
As I write this column the ink is drying on a letter to the Prime Minister on behalf of our region, about the frightening lack of progress on an EU trade agreement.
We have a mere month to move on from apparently non-productive talks to a negotiated relationship to protect thousands of jobs.
By the end of October we have to agree on our future relationship in order to allow time for its implementation before the end of our formal transition on 31 December. The Brexit clock has been ticking for a long time and there are now very clear alarm bells ringing.
If we leave the European Single Market and Customs Union without a Free Trade Agreement, make no mistake, it would be disastrous for our North East businesses.
Increasing the required levels of customs declarations, checks and additional administrative burdens would add significant pressure to businesses only just re-emerging from some of the toughest conditions they will have ever faced.
The implementation of tariffs on UK exports will result in our goods and services being fundamentally less competitive in our largest marketplace, the EU.
It is not hard to understand why we trade so strongly with our nearest neighbours. Geographically, we are perfectly situated, with seven Eastward facing ports looking across the North Sea towards Europe. At present approximately 60% of our region’s exports are sent there; the highest of all English regions. Of the five most valuable destinations for North East exports in 2019, four of them were nations within the European Single Market.
In terms of products our automotive sector is without doubt one of the most important. However, many businesses within automotive supply chains operate with a relatively small profit margin. in the area of 3-4%. If there were to be no agreement reached between the UK and the EU there would be a 10% tariff on fully assembled vehicles going to Europe.
The Sunderland Nissan plant is currently the largest automotive facility of its kind in the country and in partnership with firms in its supply chain is vital to our regional economy, but it needs a free trade market to sell in and make money.
Covid-19 has created many challenges for our amazing businesses who strive to be the best they can, with innovations and job creation aplenty, but I do not scaremonger when I say an EU deal is just as imperative as finding a vaccine to tackle this pandemic.