And it has highlighted the new town of Telford as one of the areas potentially worst hit by a hard Brexit.
The comments come from a researcher at the economic think tank, Centre for Cities.
The organisation’s latest report has highlighted how the M54 town is in a uniquely vulnerable position in relation to Brexit, listing 70 per cent of the town’s exports as going to the EU.
The situation means that the introduction of tariffs on items exported to Europe would represent increasing costs for the town’s firms.
Matt Whearty, a researcher who wrote the report, explained that the town’s current balance of EU trade meant that it would be best served by an agreement which made sure there were limited barriers or tariffs on trading with Europe.
He said: “The thing right now is we do not know what any sort of post Brexit trade deal will look like.
“We do not even know if there will be any post Brexit scenario at this stage.
“What we can say is Telford’s export relationship to the EU is the strongest of the cities in the UK and what we can take away from that is it is about staying as close as possible to the EU market economy. The closer the better really.”
He explained that while a customs union would not protect towns and cities which trade in services with the EU, it would limit the damage for those trading in physical goods.
He said: “There are a few options being talked about today such as a customs union. A customs union covers goods not services. In Telford services exports to the EU are not as significant as a share. If it comes to a customs union as the final outcome, the impact in Telford would not be as big as some cities.”
The report places Telford alongside Sunderland, Derby and Slough as areas most vulnerable if the UK comes out of the EU without a workable trade deal.
and also outlines the effect of a customs union style agreement would have on other cities.
It states: “Although not without disadvantages, a goods-only customs arrangement would however offer greater certainty to cities that export large amounts of goods to the EU. Sunderland (home to Nissan’s UK factory) Derby (Rolls Royce) and Slough (Mars) would all benefit from continued tariff-free trade.
“The EU remains the largest export market for every British city. Almost one-third of cities send over half of their exports to the bloc.
“All cities would, therefore, benefit from a future relationship that maintains open trading arrangements with the EU in both goods and services.”