Anti-Brexit demonstrators wave EU and Union flags outside the Houses of Parliament in London, Britain, January 30, 2018. REUTERS/Toby Melville

LONDON (Reuters) - Britain’s aerospace industry would be badly damaged if the country leaves the European Union without a free trade deal and any divergence from EU rules would be “utterly self-defeating”, a committee of lawmakers said.

The industry is one of Britain’s largest employers of skilled labour, generates revenue of 32 billion pounds a year and accounts for about 7 percent of the country’s manufacturing output.

But companies are worried that Britain’s exit from the world’s largest trading bloc could lead to increased customs checks and fracture intricate supply chains built up across the continent over decades.

Failure to agree on a way to harmonise customs processes would push up costs and risk the long-term viability of their factories, the lawmakers said in the report.

The aerospace industry could face 1.5 billion pounds a year in extra costs after Brexit if firms exporting components to the EU face additional checks at the border, industry body ADS Group told the committee.

“The health of the industry relies on components moving quickly across borders with delays of even a few hours having a significant impact on costs. Given this, the government must ensure custom procedures are kept to an absolute minimum after we leave the EU,” the chairwoman of Britain’s business committee, Rachel Reeves, an opposition Labour lawmaker, said on Monday.

Britain says it is seeking the freest possible trade with the EU after Brexit and has outlined potential customs regimes, but it has yet to begin detailed negotiations with the bloc on what its future trading relationship will look like.

The report also said that Britain should remain a member of the European Aviation Safety Agency (EASA) to ensure manufacturers of aviation parts can continue to benefit from cooperation on safety and avoid increased certification costs.

EASA ensures airlines respect safety rules and certifies aerospace products across the bloc, helping to bring down the costs of development and production within the industry. It also has a bilateral deal with the United States under which they accept each other’s certifications.