The House of Lords European Union Committee has this week published its report into Brexit: trade in goods. This report follows an Inquiry by the EU External Affairs Sub-Committee, to which the Manufacturing Technologies Association (MTA) gave evidence in the autumn of 2016.
James Selka, MTA CEO, appeared in person before the Committee and the MTA submitted written evidence too. Much of the Association’s evidence has been taken on board.
The MTA stressed the dangers of regulatory burden that would be placed on British manufacturers if and when the UK leaves the Customs Union. The Office for National Statistics (ONS) noted that in 2011, 37.1% of the total value of UK manufactured goods exports “reflected services sector value added”.
James Selka was quoted in the report as saying “we are very much a services-based industry which is wrapped around hardware … we have UK-based importers that reexport after adding value through a service-based offering”.
The MTA also emphasised the importance of “the movement of people and expertise to facilitate working on international contracts and projects”. The manufacturing technologies sector has highly integrated supply chains across the EU and the free movement of services and skilled people are an integral part of this industry.
Mr Selka went on to give examples to underline the significance of trade with the EU for its members, as around 45% of machine tool exports from the UK went to other EU countries, and 25–30% of the cost of a UK-manufactured machine tool consisted of materials and components imported from within the EU.
The MTA CEO is quoted in the report as saying “the manufacturing technology sector is a major supplier to UK industries such as automotive and aerospace which export a very substantial proportion of their output to the EU, therefore the exposure to EU markets is even greater that the figures suggest.” On tariffs, he cautioned that “special care should be taken to prevent their double imposition i.e. the levying of a tariff on an imported subsystem and then … again on an exported finished assembly which would leave the manufacturer paying twice—or even more times.
Other causes for concern which the MTA highlighted to the Committee related to overseas-owned member companies. Selka noted “interest and alarm about [Brexit] among overseas-owned members [of the MTA], of which there are many”. He commented that “uncertainty is the enemy of investment, and that is what we are dealing in manufacturing”.
Reacting to the publication of the report Selka said “we’re pleased to see that the House of Lords European Union Committee has taken on-board the evidence we presented to them last year. It is now down to the Government to act upon this report to ensure it protects the interests of the advanced manufacturing technologies sector in the UK. The MTA is here to offer advice and guidance to the Government to ensure the interests of our members are taken in to account during the Brexit negotiations.”