Airbus warns over Brexit free movement

Airbus aircraft A320, A330, A350 and A380 flying in formation

"We are entering a dangerous phase" if Airbus cannot seamlessly move people and products around the European Union, a senior executive has warned.

Chief operating officer Tom Williams told MPs that Washington would be "delighted" if that happened.

Giving evidence to the Commons Treasury Select Committee, he added that the US would make decisions based on the benefits to US rival Boeing.

Airbus employs 6,000 people at its wings plant in Broughton, Flintshire.

Mr Williams, also president of commercial aircraft at Airbus, told the committee's inquiry into Britain leaving the EU, that he was "sceptical" that the World Trade Organisation (WTO) was effective at resolving disputes.

He added that relying on WTO rules if an EU deal could not be reached was not a "sensible fallback position".

Airbus and its main rival, US aircraft giant Boeing, have been in dispute over subsidies for production and development.

Airbus had 731 net aircraft orders last year, compared to 668 for Boeing.

The prime minister said last week that no deal was better than a bad deal as the UK leaves the EU and negotiates its future relationship.

That would mean WTO rules would apply.

The WTO headquarters in Geneva, Switzerland

WHAT IS THE WORLD TRADE ORGANISATION?

• It has 164 member states and the UK has been part of it since it was set up in 1995 to reduce trade barriers and administer rules governing international commerce

• It is a forum for governments to negotiate trade deals and settle disputes and it operates by a set of rules

• Each European Union country is a member but all act as a bloc to ensure a united EU position

• A new set of negotiations started way back in 2001 in Doha, Qatar.

• The main aim is to help trade flow as freely as possible to promote economic development and well-being

• Based in Geneva, it has a permanent staff of 600, though decisions are made by member states

• Critics of the WTO argue that it pursues an agenda driven by business and its rules undermine the sovereignty of its member states

WTO map of trade deal on aircraft

Is free trade good or bad?

Treasury committee member, Conservative MP Steve Baker, who is also a chartered aerospace engineer, said it would be possible to develop a full aircraft industry in the UK.

Mr Williams suggested that would not be a successful model.

Outside north Wales, Airbus employs a further 9,000 workers across the UK.

Mr Williams said any EU deal must allow the company to move its products and workers around Europe, including at short notice and without restrictions.

The UK government has indicated it may try to make special arrangements for key sectors such as aerospace.

If free movement of labour could not be agreed, Mr Williams said the company's concern would be "does the UK not really care about Airbus in the future?"