Will Brexit affect trade with the United Kingdom?
The U.K’s global and European role following the Brexit referendum has been subject to much debate with, public reaction polarised between anxiety and optimism. For businesses however the U.K continues to be a great place for international trade and investment due to:
- Our historic strengths afforded by the English language, legal system and central time-zone.
- Britain being a significant global actor with representation through NATO, The United Nations and Commonwealth enhanced by cultural, sporting and educational ‘Soft-Power’.
- An open and diverse economy strong in professional and financial services, media, information technology, pharmaceuticals, aerospace and automobiles; recognised by the OECD’s 2015 ‘Ease of Doing Business Index’ as the sixth most business friendly location in the world.
- The government is reducing Corporation Tax from 20% to 15% by 2020, a focus on infrastructure spending and further monetary easing to help the U.K economy and businesses growth.
Britain does on reflection have real potential to both capitalise on these advantages and thrive in a post-Brexit world:
- Improved Laws
The regulatory burden of E.U membership can be particularly onerous for small and medium sized enterprises, but this could now evolve into a more flexible and streamlined arrangement meeting U.K needs, with an even greater focus on growth and employment.
- Fuller and Freer Trade
Outside of the E.U, the U.K will have more control over tax and trade policies. On exiting, it ceases to be part of the E.U’s system of external tariffs, which increase the cost of imports from outside resulting in other nations imposing their own. Independent of this [Britain will reclaim a place at the World Trade Organisation giving a national voice and influence on global trading rules] to forge its deals to lower import costs and encourage exports. This creates new opportunities for U.K companies to sell or source abroad and attract greater foreign investment – with expressions of interest from the larger markets of U.S.A and China, with also Australia, New Zealand, South Korea and Canada.
- Article 50
The U.K will not formally leave the E.U until it triggers ‘Article 50’ of the Lisbon Treaty and commences a period of negotiations that could last two years. This still affords U.K businesses access to and the benefits of free movement of the single European market, until negotiations have concluded giving some current stability to their trading environment.
In conclusion, Brexit may cause some uncertainty over our trading relationships and economic direction, but the presented opportunities of greater openness, improved terms of trade drawing upon our strengths and deep wells of creativity or entrepreneurial flair, prove Britain is a great place for any business.