Carwyn Jones has warned that the Welsh steel industry would be “wiped out” if Britain left the European single market and signed a free trade agreement with China, and claimed a fresh deal with New Zealand including agriculture could badly hit its farmers.

The first minister of Wales made the comments as his government launched a trade paper claiming that hard Brexit would have a severe, negative impact on the country’s economy.

The report, which is supported by an economic impact analysis from Cardiff Business School, claims that crashing out of the EU on to World Trade Organization rules would cause the Welsh economy to shrink by between 8 and 10%, equivalent to £1,500-£2,000 per person in Wales.

It concludes that the best way to protect the nation would be retaining full access to the European single market and membership of the customs union, saying that tariffs would particularly hit the automotive, chemicals, steel and electrical engineering industries.

The conclusions show the Labour head of the Welsh government is asking for a much closer relationship with the EU, post-Brexit, than his party’s national policy.



On Theresa May’s trade trip to China, she discussed the possibility of an “ambitious” post-Brexit deal with the president, Xi Jinping. The pair agreed a joint trade and investment review as the first step towards a later agreement.

But Jones warned: “A free trade deal with China that allows free flow of steel would kill off our steel industry.”

The first minister said his government was calling for a “sensible Brexit”. He said he “never accepted the vote was for the hardest Brexit”, saying that was only the view of fundamentalists.



“I think people voted for a Brexit that works for the UK; that means a soft Brexit,” he said, arguing that meant full participation in the single market and staying inside the customs union.

He claimed voters had used the EU referendum to make a statement about David Cameron, immigration and globalisation. “No one talked about the single market. No one mentioned the customs union to me,” he said, arguing that no one voted to lose their job.

The trade paper calls for no new barriers to the 61% of identifiable Welsh goods exports that go to the EU and for the UK government to consult extensively with the devolved administrations.

Jones argued that Welsh exports were worth £14.6bn each year. “As our trade paper highlights, moving to WTO rules and the imposition of tariffs could have a catastrophic impact on our lamb sector and on the Welsh shellfish industry, which currently exports around 90% of their produce to the EU,” he said.

“These hard facts underline what is at stake if the UK government fails to get the right deal for the UK or we crash out of the EU without one.”

He made clear that he disagreed with May’s claim that no deal was better than a bad deal. “Ministers in London have yet to show us any evidence of the benefits of leaving the single market and the customs union or how new trade deals would replace the benefits of access to the EU. In fact, UK government documents that have come to light this week chime with our own analysis of a post-Brexit economy.”