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Advanced Manufacturing Forum urges UK government to avoid potentially devastating trade war with Europe

The Advanced Manufacturing Forum (AMF), has warned of potentially severe consequences for its members, if the UK government triggers a clause to suspend custom and food checks on goods entering Northern Ireland and sparks a trade war with the EU.

The call comes as the UK government has once again indicated that it may trigger Article 16 of the Northern Ireland protocol, if no further progress is made to end trade friction between mainland Britain and Northern Ireland.

If Article 16 triggered, reports have suggested the EU has the option to suspend last year’s post-Brexit deal or hit the UK with targeted trade strikes. The response from the EU may include tariffs on high-value British exports, new border checks and an end to data transfers or tariffs across the board.

Richard Swart, chair of the Advanced Manufacturing Forum, said: “Trade friction, with our biggest and most important trade partner, is a natural consequence of Brexit and the government and the EU accepted this. It is pleasing that significant progress has been made by both sides in removing simpler points of friction. Whilst the Northern Ireland Protocol stretches across a vast range of issues, the AMF is clearly focussed on the impact that a potential trade war could have on our members. It would be hugely damaging to manufacturers, who have had to deal with so much during the last 18 months, including Brexit complications, the full impact of Covid, labour, skills and commodity shortages, the difficulties around freight and shipping and massive price increases.

“The government appears hell-bent on further confrontation with the EU, demanding the removal of the role of the European Court of Justice (ECJ) in the EU single market, of which Northern Ireland is a part, a key component of the whole Brexit deal, avoiding a hard border with the Republic of Ireland.

The ECJ as in integral tool for the EU to regulate the single market and have made it clear it is a red line.

“We urge the UK Government to honour the Brexit deal it negotiated and trumpeted to all as a great win-win deal for all and to provide the manufacturing sector with the certainty that it must have to move forward and remain competitive in the world market. Further unnecessary curveballs lobbed at industry should be avoided at all costs. We must also remember we have our worldwide reputation to consider, which risks being seriously damaged if we trigger a trade war over an international agreement that we had accepted only a very short time ago.”

Stephen Elliott, managing and technical director (applications) of global exporter, HVR International, based in Jarrow, and a board member of the Advanced Manufacturing Forum, said: “The UK government’s sabre rattling, with respect to triggering Article 16 of the Northern Ireland protocol, may well be the final straw for many small to medium sized UK manufacturers, like HVR International Ltd of Jarrow.

“Traditionally, as an export driven company HVR’s two largest markets are in Asia and the EU, which comprise 75% of our business. However, both sales and jobs have dropped significantly by 30% since 2018, culminating in a further 16 redundancies in Autumn 2021.

“After the recent turmoil, export driven manufacturers desperately require a period of stability to rebuild and refocus their business efforts. We are deeply concerned that, once again, the Government’s penchant for brinkmanship will not only postpone common sense agreements, but actually, damage our prospects, terminally!

“In case we are accused of scaremongering, the joint UK, US, Australia agreement to supply Australian Navy Nuclear submarines, has just cost HVR a £50,000 contract with the original French supplier, as well as undermining general confidence in UK sourcing.”

Alan Metcalfe, commercial director, of recruitment company, Zenith People and vice chair of the Advanced Manufacturing Forum, said: “North East manufacturing has already been affected dramatically with the restrictions on freedom of movement from the EU and this has adversely impacted on their productivity, being unable to attract staff. To activate article 16 would have such a negative impact on our AMF members and we would urge the government to think hard about this.”

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