BERLIN, Jan. 4 (Xinhua) -- German firms should brace for higher customs-related costs due to Brexit, a report published on Thursday by the newspaper "Handelsblatt" warns.
"Handelsblatt" cited an official paper compiled by the German Federal Ministry of Finance which outlined its views on the direct financial impact of the United Kingdom's decision to leave the European Union (EU) on trade between the two countries.
"Even in the best case of an extensive Free Trade Agreement (FTA) there will have to be customs controls between Britain and Germany again", the document read. Seeing as goods that enter the EU's single market need to be identified, firms would hereby have to register their imports and exports.
The Finance Ministry estimates that imports from Britain will require 2.7 million additional customs registries. Taking exports into account as well, the German Chambers of Industry and Commerce (DIHK) put the total figure as high as 15 million registries resulting in an additional cost to firms of at least 200 million euros (242 million U.S. dollars) each year.
DIHK president Eric Schweitzer told "Handelsblatt" that trade with Britain would become more burdensome after Brexit, regardless of the exact shape of its new relationship with the EU.
"Truly free trade only exists in the single Market", Schweitzer said.
The United Kingdom is Germany's fifth most important trading partner, accounting for a total annual trade volume of 122 billion euros. Should Britain and the EU ultimately fail to reach an agreement and revert to World Trade Organization (WTO) terms, The DIHK president estimated that additional annual customs duties for the automobile sector alone would cost 2 billion euros.
According to "Handelsblatt", even a close economic relationship between the EU and its former member would be far from cost-free for German business. On top of the annual 200 million euros forecast to go towards for new customs registries, mandatory proofs of origin for goods would come at a further cost of 300 million euros each year.
An unpublished survey conducted by the Federation of German Wholesale and Foreign Trade (BGA) found that its members view "additional customs formalities" as the greatest problem for trade. 31.4 percent of firms indicated that such fears topped their list of Brexit-related challenges.
Nevertheless, the German government has voiced concerns that many German businesses are underestimating the implications of the United Kingdom's departure from the EU.
"Many firms who are only active in the EU have no more points of contact with customs authorities", an unnamed figure in government circles was cited by "Handelsblatt."
Brexit poses a direct challenge to German customs officials as well. The authority may be forced to expand its headcount beyond currently around 39,000 employees in order to be able to deal with resulting bureaucracy. The public sector was confronted with a similar level of uncertainty as that faced by firms in this context, as much still depended on the final outcome of negotiations.
"We cannot say yet whether we will require large amounts of additional personnel", a statement by the Ministry of Finance read.
While the precise costs of Brexit were hard to calculate, however, it was already "certain" that many German firms were reducing their investment in the United Kingdom as a consequence.
