The British Plastics Federation (BPF) has warned against trade costs of nearly 1 billion euros ($1.17 billion) if no deal is established between the United Kingdom and the EU upon Brexit.
According to the federation, the U.K.'s departure from the EU without an agreement — where World Trade Organization (WTO) tariffs would be applied to both imports and exports — could raise the cost of trade with the country by £880 million ($1.16 million).
Figures, said BPF, suggest that the cost of exports could increase by £340 million ($447 million) and the cost of imports by a substantial £540m ($710.6 million).
The figures were released on Oct. 17 as part of a wider document, Understanding Plastics Trade, which analyses the trade flow between the U.K., the EU and the rest of the world.
Each year, the U.K. imports £13 billion ($17.1 billion) of plastic products, material and machinery and exports £8.4 billion ($11.4 billion).
“This shows plastics to be one of the U.K.'s top 10 imports and exports, with the EU accounting for 69 percent of all plastics-related trade, followed by Asia (16 percent) and North America (8 percent),” BPF pointed out.
However, the data also highlights that the U.K. remains heavily reliant on imports, with an overall plastics trade deficit of £4.6 billion ($6 billion).
“Out of the top 15 countries with which we trade plastics, the U.K. has a trade deficit with 13 of them. Breaking the numbers down into plastics materials, plastic products and plastics and rubber equipment confirms this trend: the U.K. generally imports substantially more than it exports to trading partners,” the BPF added.
Commenting on the findings, chairman of the BPF's Brexit committee Mike Boswell said the EU was a “vital market” for the U.K. plastics industry.
“And plastics are absolutely crucial to the success of the U.K. economy. The U.K. is a successful exporter of plastic materials, products and machinery but also remains highly reliant upon imports, making it absolutely essential that a favorable trade deal is struck with the EU,” Boswelll pointed out.
Boswell also warned that if no deal is reached, a significant increase in the cost of both exports and imports will undermine the competitiveness of the U.K.'s plastics sector.
“It is important to note that it is not just the tariffs that will affect trade; the impact of non-tariff barriers could be just as severe and there is an absolute need for streamlined customs clearance procedures to be put in place,” he added.
Also commenting on the issue, BPF Director General Philip Law said there were some materials and types of machinery that are not produced in the U.K. and need to be imported.
“Equipment imported from the EU and elsewhere is often at the forefront of automation and all the elements that make up industry 4.0. Without access to these on a level playing field we risk falling behind the competition,” Law concluded.