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Greater costs than opportunities if the UK moves away from EU rules - CBI

File photo dated 20/04/17 of the London skyline, as the official triggering of Article 50 failed to spook the City jobs market, which saw a double digit rise in financial sector vacancies last month. PRESS ASSOCIATION Photo. Issue date: Thursday April 20, 2017. See PA story CITY Jobs. Photo credit should read: Chris Radburn/PA Wire

Business will be hit by greater costs rather than benefits if Brexit leads to the UK moving away from EU rules and regulations, an UK industry group has warned.

The CBI said a study of 23 industry and service sectors showed that 18 preferred convergence or alignment for most of the important regulations.

Rule changes in agriculture, shipping and tourism could benefit the economy, but these are "vastly outweighed" by the costs of deviating from rules necessary to ensure smooth access to the EU, said a CBI report.

Carolyn Fairbairn, CBI director general, said: "It's vitally important that negotiators understand the complexity of rules and the effects that even the smallest of changes can have."

"Deviation from rules in one sector will have a knock-on effect on businesses in others, and divergence from rules in one part of a production process will have consequences for market access throughout entire supply chains."

"It's hard to overstate the importance of the decisions that will be taken over the next six months."

"Put simply, for the majority of businesses, diverging from EU rules and regulations will make them less globally competitive, and so should only be done where the evidence is clear that the benefits outweigh the costs."

A UK Government spokesman said: "We want the broadest and deepest possible partnership - covering more sectors and co-operating more fully than any Free Trade Agreement anywhere in the world today."

"And - as the Secretary of State for Exiting the European Union has said, this is a race to the top on global standards, not a race to the bottom."

In a separate report, the British Chambers of Commerce called on the Government to set up a formal dialogue with business groups on future trade deals.

Director general Adam Marshall said: "The world's most successful trading countries have formal structures to tap into business expertise ahead of and during major trade negotiations."

"As the UK prepares to develop its own independent trade policy after its departure from the European Union, the government must learn from global best practice and swiftly establish a detailed, meaningful and permanent dialogue with business and civil society that informs and supports future UK trade deals."

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