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A mere free trade agreement, as previously sought by Brussels and London, is "too little for companies," said Joachim Lang, chief executive officer of the Federal Association of German Industry (BDI). Mr Lang said: "From a political point of view, a trade agreement is much more realistic. "But you should not simply discard the idea of a customs union. For from an economic point of view, a free-commercial agreement is not far-reaching enough." The business chief has appealed to the EU Commission and the British Government. The Confederation of British Industry (CBI), the UK's leading association of companies, is also calling for a customs union post-Brexit.

GETTY German businesses have said the EU must offer UK full customs union

If there is a "hard" Brexit, companies in the EU and in the United Kingdom are threatened with direct additional costs of a total of €69bn per year through customs duties and new regulatory barriers to trade, according to management consultant Oliver Wyman and the Clifford Chance law firm in London. This is around 15 percent of the total goods trade between the EU and the UK. With €37bn per annum, the costs for EU companies would be higher than for the UK economy, which would be burdened by €32bn. In relative terms, however, the damage would be lower for the EU side because the figure is spread over 27 individual states. The BDI predicts German firms will have to shoulder additional costs of €9bn a year if a hard Brexit happens - meaning that commerce with Great Britain will in future be based solely on the rules of the World Trade Organisation.

GETTY German business chief Joachim Lang, Federal Association of German Industry



The report released on Monday said: "These increased costs and the uncertainty threaten to reduce profitability and pose existential threats to some companies.” UK financial services were said to be facing the hardest hit. In the EU, the automotive industry, agriculture and the chemical industry would be most damaged. But if a kind of customs union would be agree with Britain the cost would roughly for both sides, the study said. In Austria the mechanical engineering industry and the automotive industry would be the most affected.