The House of Lords European Union Committee last week published its report Brexit: trade in goods. This followed an Inquiry by the EU External Affairs Sub-Committee, to which the Manufacturing Technologies Association (MTA) gave evidence in the autumn of 2016.

MTA CEO James Selka, who appeared in person before the Committee, said much of the Association’s evidence — written and verbal — has been taken on board.

The MTA (www.mta.org.uk) stressed the dangers of the regulatory burden that would be placed on British manufacturers if and when the UK leaves the Customs Union.

The Office for National Statistics (ONS) noted that in 2011, 37.1% of the total value of UK manufactured-goods exports “reflected services-sector value added”.

Mr Selka was quoted in the report as saying: “We are very much a services-based industry that is wrapped around hardware ... we have UK-based importers that re-export after adding value through a service-based offering”.

The MTA also emphasised the importance of “the movement of people and expertise to facilitate working on international contracts and projects. The manufacturing technologies sector has highly integrated supply chains across the EU and the free movement of services and skilled people is an integral part of this industry.”

Mr Selka went on to give examples to underline the significance of trade with the EU for MTA members: around 45% of machine tool exports from the UK go to other EU countries, while 25–30% of the cost of a UK-manufactured machine tool consists of materials and components imported from within the EU.

“The manufacturing-technology sector is a major supplier to UK industries such as automotive and aerospace, which export a very substantial proportion of their output to the EU, so the exposure to EU markets is even greater than the figures suggest.

“With regard to tariffs, special care should be taken to prevent their double imposition — levying a tariff on an imported sub-system and then again on an exported finished assembly. This would leave the manufacturer paying twice
— or even more times.”

Reacting to the publication of the report, Mr Selka said “We are pleased to see that the House of Lords European Union Committee has taken on-board the evidence we presented to them last year.

“It is now down to the Government to act upon this report to ensure that it protects the interests of the advanced-manufacturing technologies sector in the UK.”