Brexit an “economic disaster” for British and German trade: DIHK

BERLIN, June 22 (Reuters) – Brexit has been an “economic disaster” for trade and investment ties between Britain and Germany, causing German direct investment to fall and leading to a decline in importance of the UK as a trading partner, according to German economists. saying.

Great Britain voted on June 23, 2016 to leave the European Union and left the EU single market in early 2021.

“Brexit is an economic disaster for both sides of the channel,” Volker Treier, head of foreign trade at the German Chamber of Industry and Commerce (DIHK) told Reuters on Thursday.

Last year, Germany exported goods worth 73.8 billion euros (80.57 billion dollars) to the United Kingdom, 14.1% less than in 2016. The year of the referendum, the United Kingdom was the third most important export market of Germany, but by 2022 the country had fallen to eighth. place, Treier said.

As a trading partner, which measures exports and imports combined, the UK has lost even more importance since then, falling from fifth to 11th place, he added.

The volume of German direct investment in the UK has also declined. In 2021, it was around 140,000 million euros, a decrease of 16.1% compared to 2016.

According to DIHK, some 2,163 German companies are now active in the UK, down 5.2% from 2016.

Meanwhile, many British companies have set up shop in Germany in recent years. Germany Trade and Invest (GTAI), an organization that helps international companies establish business in Germany, has counted more than 1,000 UK start-ups since the Brexit vote.

Last year alone, there were 170 new businesses, a number surpassed only by companies from the US and Germany’s neighbor Switzerland.

“We expect UK inquiries to remain at a high level,” said GTAI director general Robert Hermann. “It is important for British companies to have a foothold in the EU.”

Germany’s size and central location are an advantage when it comes to attracting UK companies, he added.

“The UK’s departure from the EU has made our close business relationships more difficult and there is still considerable planning and legal uncertainty in the business of German companies in the UK,” Treier said.

($1 = 0.9160 euros)

Reporting by René Wagner; Written by María Martínez; Edited by Emma Rumney

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