BERLIN (WNI) – Germany’s finance minister recently reached out to the UK to discuss a closer trading relationship with the EU.
The invitation came as relations between the UK and the EU have improved since Brexit and there is a renewed emphasis on discussing trade and investment ties.
It’s no secret that the trading relationship between Germany and the UK has been important historically, but since Brexit, both countries have seen disruption. This is especially true for Germany’s manufacturing sector which prior to Brexit, had unfettered access to the lucrative UK domestic market with solid demand for its cars.
Direct investment from Germany into the UK has also fallen since Brexit, and both countries are deemed to be “worse off” in the past several years. Since the start of the Ukraine war, and the subsequent rise in energy prices, Germany has been hit particularly hard and its world renowned manufacturing sector is enduring one of its toughest trading environments in decades.
With Brexit comes difficulties but where there is renewed political ambition, Germany and the UK could seek to forge a closer trading relationship that improves the Brexit deal – in turn, to the benefit of both countries and the wider EU. With Britain already signing up to the The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) since leaving the European single market, it is no secret in European circles that Britain is going to become increasingly a competitor when it comes to trade on the world stage. However, an improved Brexit deal and more flexibility with Britain could prove to be beneficial in the coming years for the EU. Germany, which in the past had a close trading relationship with Britain, could lead on a new Brexit arrangement that brings further opportunities for direct investment in both countries, and a renewed sense of optimism for future trade.