Speaking in Coventry this morning, Labour leader Jeremy Corbyn MP announced that Labour would seek to negotiate a customs union with the EU that would protect "full tariff-free access" and avoid a hard border in Northern Ireland.
Professor Nigel Driffield, Professor of International Business at Warwick Business School, comments:
"Business will largely welcome Labour's new position, though the question then is how the rules of origin will be handled within this. If the EU rules of origin continue to be applied to UK advanced manufacturing as they are now, then it could be close to “business as usual” for firms in the UK.
"However, if the EU play hardball and treat the UK as a third country, then the country has a lot of work to do to ensure that supply chains for the UK's headline firms are more robust and can be further developed through investments in skills, and ensuring access to finance for small firms and potential new entrants.
"Business will also welcome Corbyn's reassurance to EU workers, many have been concerned about losing skilled people.
"What is less clear is how a customs union membership would impact on the service sector. Here there is no real solution other than sector by sector arrangements for banks, financial services, architects, etc. The precise outcome of this will influence location decisions within the sector, but the combination of a customs union and a more realistic treatment of EU nationals is a positive step for business."
- Professor Driffield has researched the impact of Brexit on foreign direct investment into the UK.
26 February 2018
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