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UK ceramics sector vents frustration over Brexit trade policy confusion

Many businesses could ‘struggle to stay afloat’ after Brexit

A UK manufacturing industry group has written to prime minister Theresa May expressing exasperation at what it sees as a mismatch between MPs’ views on trade policy and industry’s aspirations.

The letter, by the British Ceramic Confederation, attacks what it calls a ‘disingenuous’ attempt by a group of MPs to lobby against the UK remaining in a customs union with the EU post-Brexit – and citing the ceramics industry in support of their argument.

But the Confederation makes clear its view that a customs union would be positively helpful in maintaining relatively frictionless trade with markets in the EU – and claims that, in the areas of market access and trade remedies, the EU had actually done more to support the interests of UK producers than the British government had.

The exchange offers further evidence of the convulsions currently affecting UK public life as the British government struggles to make headway in formulating a coherent post-Brexit trade policy.

The Confederation’s outburst was triggered by a letter to The Times by a group of 14 Conservative MPs, including former trade minister Greg Hands and former Brexit secretaries David Davis and Dominic Raab.

MPs warn against EU ‘running’ UK trade defence measures

The letter warns the prime minister against any attempt to remain within a customs union after Brexit, claiming that under any such arrangement, “the EU would also most likely run our trade defences (or trade remedies), which are particularly important to industries such as steel and ceramics producers.”

The MPs add: “It would even be possible for Brussels to make a decision which was actually harmful for the UK.”

But Laura Cohen, the BCC’s Chief Executive, pointed out in her own letter to Theresa May that the UK government had initially sought to include ceramics among the sectors which would see zero tariffs on imports in the event of a ‘no deal’ Brexit – a move which she said would have imperilled thousands of jobs in the sector.

“There was no comprehensive formal consultation, no comprehensive impact assessment and no prolonged transition proposed,” Cohen stated.

She noted that lobbying by the BCC had ultimately persuaded the government to retain tariffs on product lines where anti-dumping duties were already in place. But she said that all other products in the sector would still face zero duties, and that as a result, “many businesses could struggle to stay afloat.”

BCC’s Chief Executive Laura Cohen © BCC
BCC’s Chief Executive Laura Cohen

Cohen described as “ironic” the MPs’ stated concern about the possible impact of EU officials being able to make calls on trade remedies for ceramics products, pointing out that the UK government had abstained in an EU vote on antidumping measures on tableware in 2013.

She also alleged that when Greg Hands (one of the signatories to the letter) had been trade minister – prior to his resignation last year — he had proposed the formation of a new UK remedies system “which would have been far less supportive of manufacturers than the EU equivalent.”

‘Strong support’ for customs union

The letter also made clear that, far from regarding a customs union with the EU as a catastrophe, the BCC would regard this outcome as being far better than an “extremely damaging” no deal Brexit.

“If a Parliamentary consensus were able to coalesce around a permanent customs arrangement, this is something our board would strongly support,” Cohen insisted.

The UK ceramics industry, which produces goods ranging from kitchenware to washbasins, has, like most consumer-facing businesses in Britain, been reluctant to voice explicit criticism of the UK’s Brexit project. But the BCC’s letter makes clear the sector’s frustration with the way Brexit has been handled.

No FTA rollover with key export markets

It warns that serious problems would arise in the event of a no deal Brexit, with market opportunities being lost not only in the EU – which accounts for 57% of UK ceramics exports – but on third country markets as well.

Cohen pointed out that only 10 of the EU’s 40 or so trade agreements have yet been rolled over to apply to the UK after Brexit, and that these 10 FTAs did not include those with South Korea (the UK’s third largest export market for ceramics), Japan (its fourth-largest), or Canada (its eighth-largest).

Meanwhile, industry insiders told Borderlex that rules of origin may well present further difficulties for the ceramics sector in the absence of a customs union with the EU, given the international nature of the supply chains for many UK manufacturers.

The idea of a ‘temporary’ customs union with the EU was floated by prime minister May in her latest proposed compromise solution, outlined on Tuesday (May 21), to get a Brexit deal approved by the UK parliament. However, government sources announced on Thursday that initial plans to table the draft Bill at the end of this week had been shelved, in the face of fierce opposition to the compromise deal on almost all asides.

Most political pundits in the UK expect May to be forced to resign as prime minister within the next few days.

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