Doing business in the EU

EU membership makes doing business with Toulouse, Turin and Trier as easy as doing business with Norwich, Newcastle and Nuneaton

The vast majority of ADS’ members export to the EU. Membership of the EU provides valuable access to a European customer base that is vital to sustaining Britain’s industrial sector.

Whilst the UK remains the second largest global aerospace economy, the increased number of new entrants is putting pressure on the established supply chains and manufacturing bases. In addition to China, new entrants include India, Mexico, South Korea and, in Europe, Poland and Turkey.

Each of these countries is seeking to use its commercial influence to develop indigenous aerospace industries to compete with the established suppliers in Europe and North America.

59% of ADS members see free trade within the EU as the biggest benefit to their business

The importance of free trade with the EU is best illustrated by the value of the UK’s export market and the deep integration of UK supply chains in the EU. UK companies are often key suppliers, providing components, critical elements and sub-systems into Europe’s supply chain.

The EU guarantees free trade across Europe and pushes for free trade across the globe. It has approximately 100 free trade agreements globally and is working towards a free trade agreement with the US that would remove tariffs for EU companies trading with the US.

Our sectors benefit from integrated pan-European supply chains

Integrated Supply Chains
SOURCE: KPMG & Airbus

 

Even if protectionist tariffs are unlikely to actually be applied if the UK were to leave the EU, the UK is embedded in the EU supply chain for existing programmes, it is likely an EU exit would impact industry over the long run and could be impossible to reverse. If investment decisions on new programmes of work are made elsewhere, with EU Original Equipment Manufacturers (OEMs) allocating work within the EU, future generations will feel those impacts.

The UK would need to get free trade agreements in place, which would have a time cost and create an added layer of bureaucracy, resulting in uncertainty for UK companies and inward investors alike.

We look for a stable competitive economic environment to operate in, and we are a successful integrated European company. So we work with France, Germany, and Spain in particular and we want to work as efficiently as possible across those borders. So anything which disrupts that is a concern to us.

Paul Kahn, President of Airbus Group UK