Start of Brexit negotiations in Brussels

Maintain the fundamental freedoms and the cohesion of the EU

Brexit negotiations should not further weaken the European Union ++ Strive for a comprehensive partnership, investment and trade agreement ++ Avoid burdens through customs payments and in future regulation.

VCI comments the start of Brexit negotiations: European Union should not be further weakened; strive for a comprehensive partnership, investment and trade agreement! - Photo: © jamdesign - Fotolia.com
VCI comments the start of Brexit negotiations: European Union should not be further weakened; strive for a comprehensive partnership, investment and trade agreement! - Photo: © jamdesign - Fotolia.com

Prior to the official start of the withdrawal negotiations between Great Britain and the EU, the German chemical industry association Verband der Chemischen Industrie (VCI) emphasizes that the achievements of European unification must not be put at stake. VCI director-general Utz Tillmann: “The Brexit negotiations should not further weaken the EU. The cohesion of the European Union and maintaining the four freedoms have high priority for the chemical-pharmaceutical industry.”

Especially at the present moment in time, politicians and industry need to highlight the advantages of cooperation and speak for the integration project EU, while keeping the economic damage of the Brexit as low as possible for both sides, so Tillmann. In order to ensure this, the EU should strive in the withdrawal negotiations for a comprehensive partnership, investment and trade agreement. Tillmann: “Partnership achieves more than protectionism.”

Impacts on the chemical-pharmaceutical industry

The impacts of the Brexit on German chemical companies will depend on the concrete shape of future trade relations. Should the British government impose chemical and pharmaceutical tariffs corresponding to the existing EU external tariffs, Germany’s third largest industry would have to pay 200 million euros p.a. in customs duties.

Further burdens for the chemical-pharmaceutical industry can be expected if future regulation in the EU-27 and the UK take divergent paths – be it for the European chemicals regulation REACH, the authorisation of medicines, cosmetics and plant protectants or for new regulation regarding the circular economy. For example, different legal requirements for the classification, labelling and packaging of chemical products would mean bureaucratic obstacles for trade.

For the German chemical-pharmaceutical industry, the United Kingdom is the third largest trading partner in the European Union following the Netherlands and France. In 2016 the industry sold goods worth 11.7 billion euros to the UK (6.6 percent of all exports), with specialty chemicals and pharmaceuticals making up the biggest share. During the same period, German chemical companies imported products to the value of 6.2 billion euros from the island. These mainly included pharmaceutical inputs and petrochemicals.

Great Britain has also a major role as a production and distribution location for the industry. At present, 63 subsidiaries of German chemical companies are active in the UK. In total, they have around 6,000 staff and realise sales of 4.1 billion euros. The stock of direct investments on the island amounts to roughly 1.6 billion euros. British investors account for investments of well over 2 billion euros in the German chemical industry.


The VCI represents the politico-economic interests of around 1,700 German chemical companies and German subsidiaries of foreign businesses. For this purpose, the VCI is in contact with politicians, public authorities, other industries, science and media.The VCI stands for over 90 percent of the chemical industry in Germany. In 2016 the German chemical industry realised sales of around 183 billion euros and employed 446,000 staff.

Contact: VCI Press Dept., Phone: +49 69 2556-1496, E-Mail: presse@vci.de

Please note: VCI news about the chemical industry is also available via Twitter: http://twitter.com/chemieverband

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Contacts

Jürgen Udwari

E-Mail: udwari@vci.de