Commercial uncertainty for the Cross-border European Market

All across the EU businessmen and women are slamming on the brakes as the spectre of commercial uncertainty rises higher following the results of the British parliamentary vote. The vote, now won, which the government hoped would allow another round of EU negotiations to amend the current Brexit deal, only to have the EU state, within a blink of an eye, that the deal was set in stone and no further negotiations would  a) be likely to happen or b)change the deal.   Infuriated businessmen and women, particularly those in the UK, who opted to stay calm and not panic, who trusted the Prime Minister when she said that she would not let Britain fall off the cliff-edge are now facing declining order books, retreating suppliers and a very different from expected “cliff-edge” sort of a  future. UK businesses that have been successfully operating for years, decades even, across Europe are now in no doubt that they have been comprehensively let down.  

Those UK businesses in the European market have hard choices to make, do I go or do I stay?  Some businesses will trigger a relocation plan as the toxicity of uncertainty is too damaging to their brand.  Others will dig in and hope to forge a path in new markets, by no means a guaranteed strategy for success despite all the breezy statements about leveraging trade deals with South Korea, Canada and Mexico.  Every business person knows that in order to get a new client the previous supplier’s fingers have to be prised off the target client with the offering of a better price or service, often squeezing the margins until they all but disappear.

Dr. Adam Marshall, director general of the British Chambers of Commerce, commented in the Daily Telegraph, “I am glad that more and more businesses are looking after their interests, making plans and stress testing their operations for choppier waters. Whether their reassessment is due to Brexit concerns or other, more global factors, it's unquestionably the right thing to do. A flat-footed business is, ultimately, one that's less likely to survive and even less likely to thrive”.

Indecision and uncertainty have dogged the whole Brexit strategy; the government’s over-confidence that a good deal could be struck appears to have led them to fail to prepare for the worst case scenario and they certainly did not flag up to British businesses that this situation was creeping ever closer during the negotiation process.  The government’s over-optimistic view that whatever happens everything can be “managed” has come back to bite it.

Unless a very big rabbit is pulled out of the hat, the future prospects for the UK are that large organisations will be relocating, which will leave whole communities who depend on them in the doldrums; closures and job losses; investments pulled and contracts lost to competitor countries who do not have any impediments to trade.  The government must find a way of creating the time and space to avoid these potential disasters, as the country is patently unprepared to weather storms ahead.

For more information about options to circumvent the adverse effects of a Brexit no-deal please email or telephone 020 7183 9482