BREXIT and the impact on British and European companies
The result of the British referendum was a surprise to all. The negotiations leading to the Brexit deal were lengthy and not entirely satisfactory to some industry sectors. The estimated trade between the UK and the EU, prior to the referendum is approximately 1196 billion euros, mostly comprised of the import/export of goods.
The irrevocable step to leave the EU was taken by the UK and despite the extensive negotiations there was precious little clarity as to the way trade with the EU Member States would continue right up to the wire. It is now abundantly obvious that the businesses that took measures to ensure that they had a foothold in British/EU commerce by way of creating subsidiaries in both the UK and the EU, as well as the organisations who created new businesses in the country in which they wish to trade, with many strategically relocating their headquarters, have the ability to continue to trade with minimal problems. There is a strong advantage in retaining lawyers that have a wide capacity across multiple jurisdictions,
For Germany alone there are an estimated 1,300 German subsidiaries in the UK and 2,500 British companies have a branch in Germany creating thousands of jobs. This is replicated in countries all over Europe. There are a number of options that have been considered to facilitate the continuance of trade between the EU Member States and the UK, for example, bilateral agreements or independent free trade agreements. However, regardless of whether an organisation has a branch or has set up a separate business in another territory, it will be hard to avoid additional costs and a greater bureaucratic burden directly arising from the split but those businesses that prepared before the final separation have found it easier to trade.
With Brexit behind us, Britain is now free to strike bilateral agreements and free trade agreements for selling goods and services worldwide. So far the Government has struck a number of new trade agreements across the globe.
The patience of a number of global organisations based in the UK has been tested. The tech and automotive giants have ruled out Britain for their next development projects with Tesla building its next factory in Germany and Sony moving its European headquarters to the Netherlands. However, encouragingly Nissan will build its Qashqai model at Sunderland site despite the EU tariff threat. There are still so many unanswered questions it is hardly surprising, that businesses want certainty as opposed to unexpected surprises and unknown quantities, any European organisation that chooses to do business out of Britain will almost certainly receive an extremely efficient level of service in order to retain the business.
Despite the fact that the UK triggered the whole situation with the decision to leave the EU, it is not a one-way street of loss, many of the EU Member States have a vested interest in the continuance of cross-border business between the EU and the UK. It is in everyone’s best interests to ensure that the importance of maintaining a good level of trade between the UK and the EU is fully recognised. The devastating effects of the coronavirus pandemic have made it all the more important to set aside previous objections and look towards working together for the greater good with regard to commerce Britain and Europe.
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