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Nissan issues warning on UK Brexit

By JULIAN SHEA | China Daily | Updated: 2018-10-05 09:38

Japanese car manufacturer Nissan has become the latest major industrial organization to issue a warning over its future in the United Kingdom if the country leaves the European Union next year without reaching a negotiated agreement.

The UK is scheduled to withdraw from the 28-member bloc at the end of March 2019, following the outcome of a referendum on the issue in 2016, but with time running out, British Prime Minister Theresa May's government and EU negotiators still appear far apart on the exit terms, leading to fears of a so-called "Hard Brexit" with potentially huge economic implications.

Supermarkets have already started talking about stockpiling food to deal with disrupted supply chains, international transport could be affected and numerous companies have also raised concerns.

Nissan employs around 8,000 workers in the UK, its European production base, since 1986. The company's main plant is in the northeastern city of Sunderland, which was one of the first areas to announce its result on the night of the referendum, with a large majority locally voting leave.

As a member of the EU, Britain currently has frictionless trade with the other EU countries, but a hard Brexit would end this, with no clear sign yet what the alternative would be.

"Frictionless trade has enabled the growth that has seen our Sunderland plant become the biggest factory in the history of the UK car industry, exporting more than half of its production to the EU," said a statement from Nissan.

"Today we are among those companies with major investments in the UK who are still waiting for clarity on what the future trading relationship between the UK and the EU will look like.

"As a sudden change from those rules to the rules of the WTO (World Trade Organization) will have serious implications for British industry, we urge UK and EU negotiators to work collaboratively towards an orderly balanced Brexit that will continue to encourage mutually beneficial trade."

Earlier this year, aircraft manufacturer Airbus said it would leave the UK if there was no negotiated trade deal with the EU. Electronics company Panasonic is relocating its European headquarters to the Netherlands and several financial institutions have begun moving operations away from the UK for the same reason.

On Wednesday May gave her leader's speech to the Conservative Party's annual conference, where she defended her own much-criticized proposals for Brexit, describing them as a "free trade deal that provides for frictionless trade in goods". She also gave a clear coded message to vocal critics within her own party, such as former foreign secretary Boris Johnson, warning that people pursuing "our own visions of the perfect Brexit" could lead to "no Brexit at all".

Aside from Britain's future trading relationship with the EU, one of the other biggest obstacles to Brexit is the issue of the border between Northern Ireland, which is part of the UK, and the Republic of Ireland, which is an EU member state. At the moment there is no hard border, but how this will be maintained post-Brexit, from both an economic and practical point of view, is a complex issue.

According to reports in the Financial Times, the Irish government is leaning toward a solution which might help ease the situation.

It is understood Dublin officials have privately given their backing to a proposed customs union between the EU and UK for a time-limited period, which is one of May's suggestions.

Although chief Brexit negotiator Michel Barnier has already rejected the idea, Irish Prime Minister Leo Varadkar is due to meet him and European Council president Donald Tusk this week.

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