Brexit Impact Series #1
Globig is monitoring changes happening in the UK and the EU due to Brexit and we will keep you updated on our Brexit Impact Blog Series. We are also creating a deeper analysis and step-by-step guide for our Globig members, including key policy areas that will be impacted, regulatory changes,and other tactical assistance needed to navigate these complex new situations.
Background
On June 23, 2016, the UK voted on a referendum to leave the EU as a member state. There are a lot of areas where the EU and the UK are intimately intertwined and the unraveling of the relationship and creation of a new relationship will be complicated, messy, and may take a long time. The unfolding impact of Brexit over time is what we’ll be covering, so you can rest assured that you’re prepared to make informed business, travel, and personal decisions.
Until the UK invokes Article 50 of the Lisbon Treaty, the official process to begin negotiations to exit the EU, no laws or procedures will change. Unofficially, however, the markets have reacted with daily ups and downs, there is a deeply divided populace in the UK leading to protests and incidents of racism against foreigners and an increase in hate crimes, and there is a lot of emotion, worry, and speculation about what this means for the UK, EU, US, and the rest of the world.
Here is a list of the primary areas that will be impacted by Brexit. Some of these will drive quick reactions and fluctuations, while others will take many years to create change, if ever. The impact can range from short-term on one side to those that won’t be quantifiable for a long time.
To stay informed, we recommend that you read both conservative and liberal media coverage, as we do, and a mix of bloggers who are able to see beyond the rhetoric and articulate the situation with thoughtful analysis both for and against Brexit. There is usually truth somewhere in the middle. We’ll share what we believe are interesting perspectives and insightful discussions throughout Globig’s Brexit Impact Series.
Areas we’ll provide insights and guidance on include:
- Business – Import/Export Trade
Accessing the EU’s single market and preferred trade terms is probably the EU’s and UK’s most critical point to negotiate. The EU is the UK’s largest trading partner, accounting for 45% of UK goods and services exports and 53% of UK imports. That’s over £529 billion combined.
- Cultural – Sentiment – Confidence
This is one of the most challenging areas of impact to quantify and measure, not only in the UK, but also the EU in general. Having a positive, robust, and healthy business climate where people are excited, motivated, embracing globalism, and have confidence in the future is a very important aspect of doing business. Currently, there are a lot of unknowns and people in the UK and the EU are concerned and upset, and the business environment is wary and unsure. Once negotiations with the EU have been completed and new deal terms are in place, we anticipate uncertainty to go away and the overall business climate to improve.
- Economic – Market – Currency
Since the announcement of Brexit, markets have been volatile and the currency has contracted for the Pound Sterling and the Euro. Dramatic daily fluctuations are anticipated until successful negotiations have been completed between the UK and the EU.
- Immigration – Labor – Employment
For about 30-40% of the voters, open immigration from other EU countries, the refugee crisis, and employment for EU citizens in the UK were pressing issue or at least major concerns. While the actual laws won’t change until after EU and UK negotiations, there has been an increase in violence and clashes with foreigner workers since the Bexit vote.
Employment laws are more stringent and entitlements are richer for countries that are part of the EU. There may be some cutbacks and more flexible business regulations to help smaller UK businesses be more competitive in the future. Globig will keep you updated on areas impacting your business as they develop.
- Financial – Business Services – Investment
London is a global hub for financial and business services, and a robust startup community. Will investment remain strong in the UK? Will London retain its title as the EU’s top startup ecosystem? Will companies continue to get the support they need to be a global player, if based in the UK? There are a lot of questions that we’ll seek and find answers to over time.
- Privacy – Data
Most experts don’t anticipate many changes in digital data privacy and data handling requirements. But since there are currently a lot of changes in the GDPR (general data protection rules for the EU) on top of the potential changes caused by Brexit, this area will be critical to watch. The more rigorous EU regulations will most likely remain in place even after the UK is not a member state.
- Police – Justice Cooperation
The EU and UK police and justice services share databases and cooperate in criminal investigations across borders. This will also be an area of negotiation between the EU and UK. They will need to determine how and if they will coordinate and work together in the future.
Other Integrated Services:
There are many other areas that connect the EU and the UK to each other. We will continue to bring youupdates on the changes and ongoing discussions for these important areas, as well as others along the way.
If you’d like to keep up with the daily changes yourself, here are some websites and blogs to read that will give you both conservative and liberal perspectives:
