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Brexit storm clouds build

“Chaos threatens,” warns German chemical industry body VCI

by Alex Scott
August 29, 2018 | A version of this story appeared in Volume 96, Issue 35


Photo of tankers in Grangemouth terminal.
Credit: Henkel
U.K. chemical terminals, such as this one in Grangemouth, Scotland, may face chaos if the U.K. and EU fail to secure a trade deal.

Ongoing failure of the European Union and the U.K. to strike a trade deal ahead of the U.K.’s exit from the EU in March 2019 could bring the import and export of chemicals between the two entities to a complete standstill, says Utz Tillmann, CEO of VCI, Germany’s largest chemical industry association. “Chaos threatens,” he says. Complex and cross-border chemical supply chains would lead to time-consuming customs procedures at the border, he adds.

The U.K. government is due to provide the chemical sector with guidance in the event of a “no deal” scenario in the coming days. But unilateral technical advice to British firms will not solve the problem, Tillmann says. Instead, the EU and U.K. must work hard to reach a negotiated result. The most important component of any deal would be to integrate the U.K. into Europe’s Registration, Evaluation, Authorisation & Restriction of Chemicals legislation, he says.

The U.K. chemical and pharmaceutical industries generate annual sales of $65 billion, of which about 60% are from exports to the EU. Approximately 75% of finished chemicals and raw materials imported into the U.K. come from the EU.

Philip Hammond, U.K. government minister for finance, in recent days acknowledged that the chemical industry would be one of the sectors hardest hit by Brexit in the event of no deal. Hammond is forecasting that in such a scenario, the U.K.’s gross domestic product—a marker of economic output—would drop by 5.0–10.3%.

Meanwhile, the U.K. government is advising the country’s pharmaceutical companies, including GlaxoSmithKline and AstraZeneca, that they should stockpile a six-week supply of drugs, two weeks more than it had previously proposed.

A “no deal” scenario is currently on track to have major repercussions for British scientists, according to Scientists for EU, a campaign organized by U.K. scientists who want to stay in the EU. The organization expects that in the event of no deal, the U.K. would no longer be eligible to receive money from European funds, including the European Research Council and Marie Skłodowska-Curie Actions, which together provide U.K. scientists with almost $700 million annually.


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