Hard Brexit for Britain will be “mission impossible,” says head of German motor industry

A hard Brexit will be “mission impossible” for both Britain and the European Union, the head of the German motor industry association has warned, insisting the aim of the Brexit talks must be to keep the UK in the single market.

Matthias Wissmann, the VDA President, said Britain leaving the internal market and the tariff-free customs union would have “massive negative effects” on both sides of the English Channel.

He argued that the EU should aim to keep Britain in both, forcing it to pay into the Brussels budget and accept the resulting rules, including the free movement of people, which has been firmly ruled out by Theresa May.

Mr Wissmann highlighted the “deep reciprocal dependency” of the two countries’ automotive industries, with German cars accounting for half of all new cars registered in the UK, which imports 86 per cent of its vehicles.

Similarly, British car production has boomed over the last five years, growing by a quarter to 1.6 million vehicles in 2015 with German brands accounting for 11 per cent, and 57 per cent of car exports sold in the EU.

Writing in the Suddeutsche Zeitung newspaper, Mr Wissmann said the figures showed the “deep interdependence” between the UK and EU, including Germany.

“The hard Brexit preferred by Theresa May would have severe side effects,” declared the car industry chief.

“A long period of uncertainty must be expected until new contracts are concluded. This can take years; a frightening perspective for investors.”

He went on: “In the UK there is hardly anybody to say to the people that a hard Brexit will not be a ‘win-win situation’ but, above all, laborious and expensive.

“It remains the hope that in the upcoming exit process the realisation of the nearly insurmountable hurdles prevails; a hard Brexit is indeed a ‘mission impossible.’”

Mr Wissmann said the aim of the talks must be for Britain to “remain in the internal market and in the customs union, accept the basic freedoms and make a financial contribution to the EU budget, in return for unimpeded access to the internal market”.

But in comments which will cheer the Prime Minister, who will be considering how much leverage she has in the negotiations, he highlighted the strategic importance of the UK to Germany.

“They are the voice of the market economy, competition, as opposed to representatives of a ‘transfer union’. Without London it would be even more difficult for Berlin in Brussels to stand up against the desires of other EU countries. Moreover, the EU 27, a union without the British, would have less weight anywhere in the world,” claimed Mr Wissmann.

His comments come after Brexit Secretary David Davis told car manufacturers earlier this month that ministers were focused on getting the “best deal” for the industry.

Assurances already offered to Nissan have persuaded the Japanese car giant to make two new models at its Sunderland plant, securing 7,000 jobs in the region.

Liam Fox, the International Trade Secretary, has also suggested the UK could remain a partial member of the customs union, raising speculation that ministers may seek to keep certain sectors like the automotive industry in the tariff-free bloc.

Meantime, Jean-Claude Piris, a senior former EU lawyer, warned a final trade deal would be “totally impossible” to negotiate within the two-year exit period set out in Article 50 of the Lisbon Treaty.

Mr Piris, the head of the EU Council’s legal service from 1988-2010, said ministers must seek a transitional period to stop the UK having to fall back on World Trade Organisation rules and tariffs, which he said would be damaging for both Britain and the EU.

Earlier this month, Mrs May indicated Britain could remain in the EU for an “implementation period” after a divorce deal is settled, giving businesses and officials time to adapt.

However, the PM has also made clear she expects to negotiate a deal within two years of triggering Article 50, which she has promised to do by April.

But Mr Piris said it was “vital” to secure a transition period, telling The Financial Times a final deal could take a decade due to its complexity.

“It’s not the most pessimistic view because the most pessimistic view is that there will be no agreement at all,” he said.

“It will take years; that’s for sure. I don’t know how many years…some people say between four and eight years but that is if people have goodwill on both sides.”

He added: “The important thing is that clearly there is a gap of a few years between the date where the UK is withdrawing from the EU and the date where this agreement comes into effect, perhaps five or six years.”

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