Brexit: German business warns May its priority is to protect single market, not a good trade deal with UK

Carmakers in Germany were expected to lobby their government for a free trade deal to help them sell into the British market, but they say protecting the single market is more important

A carnival float depicting British Prime Minister Theresa May pointing a gun to her with the lettering 'Brexit' takes part in the traditional 'Rose Monday' carnival parade in Duesseldorf, western Germany (Getty Images)

German business leaders have cast doubt on claims that the country's manufacturers will help secure a Brexit trade deal, instead warning Theresa May it will be "extraordinarily difficult" to protect UK industry.

Ministers have frequently claimed that German carmakers, along with other key European industries such as French farmers and winemakers, would lobby their governments to agree a comprehensive deal which maintains tariff-free trade between the UK and the other 27 EU member states.

But the leaders of two of Germany's main business organisations said the priority for them was maintaining the integrity of the single market for the 27 remaining members of the European Union.

Dieter Kempf, president of the BDI, the federation of German industries, told the Observer: "Defending the single market, a key European project, must be the priority for the European Union. Europe must maintain the integrity of the single market and its four freedoms: goods, capital, services, and labour.

"It is the responsibility of the British Government to limit the damage on both sides of the Channel. Over the coming months, it will be extraordinarily difficult to avert negative effects on British businesses in particular."

Ingo Kramer, president of the confederation of German employers' associations (BDA), told the newspaper: "The single market is one of the major assets of the EU. Access to the single market requires the acceptance of all four single market freedoms.

"The UK will remain a very important partner for us, but we need a fair deal for both sides respecting this principle. The cohesion of the remaining 27 EU member states has highest priority."

Their intervention comes after the Prime Minister received a boost at the G20 summit, with US President Donald Trump highlighting the prospect of a trade deal with the UK.

Ms May said it was a "powerful vote of confidence" in Britain that Mr Trump and other world leaders have shown with their "strong desire" to strike new trade deals after Brexit.

The Prime Minister said she is "optimistic and positive" about a future pact with the US after the president said he believed an agreement could be reached "very, very quickly".

Following talks on the margins of the summit in Hamburg, Mr Trump hailed the "very special relationship" he had developed with the PM.

He said he expected an agreement on new trading arrangements with Britain to be "very powerful".

Ms May insisted she was confident the UK would also secure a good deal with the EU "because it's not just about what's in the interests of the United Kingdom, it's about what's in the interests of the remaining 27 members states in the European Union and I think it is in the interests of both sides to have that good trade agreement".

She added: "But I'm also optimistic about the opportunities that we will see in the rest of the world.

"Some of the countries I have been talking to here who have shown great interest in working with us on trade arrangements in the future, the United States, Japan, China, India, these are all huge world economies.

"This is an important development for the United Kingdom and I look forward to developing those trade deals as well."

Press Association