Diese Präsentation wurde erfolgreich gemeldet.
Wir verwenden Ihre LinkedIn Profilangaben und Informationen zu Ihren Aktivitäten, um Anzeigen zu personalisieren und Ihnen relevantere Inhalte anzuzeigen. Sie können Ihre Anzeigeneinstellungen jederzeit ändern.

Trade and Brexit

1.093 Aufrufe

Veröffentlicht am

This Brunswick note looks at the different scenarios for post-Brexit trade and distills some of the key advice from recent Brunswick events with trade negotiators so companies can prepare their engagement strategies and ensure the best outcomes for their business and sector, no matter the shape of the final deal.

Veröffentlicht in: Leadership & Management
  • Als Erste(r) kommentieren

  • Gehören Sie zu den Ersten, denen das gefällt!

Trade and Brexit

  1. 1. Episode2:Global Britain – AFreeTrading Future? Brexitinperspective March 2017
  2. 2. © Brunswick 2017 | 2 Thetradenegotiations arisingfromBritain’sexit fromtheEU willprovide businesseswitha unique opportunityto helpsetthe termsof theirtradewiththe restof theworldfor a generation. The UKGovernment’sBrexit WhitePaper makesclearthatBritainwill leavethe Single Market:theEU’sprojecttodeepen economiccooperationthroughthe‘four freedoms’ofgoods,services,workersand capital. ThedocumentalsosuggeststhatBritain willleavetheCustomsUnion,which allowsUKgoodstocirculatefreelywithin theEUwithouttariffsorcustomschecks forconformitywithEUstandards. Thesechangesrequirea new legal frameworktobe putin place,one whichis compliantwithexistingWorldTrade Organizationrules,andclearlyestablishes theUK’snew tradingrelationshipwiththe EU. Tradenegotiationstakearoundfiveyears onaverageandagreements areonlyre- visitedevery20-30years.Itistherefore criticalthatbusinessesconsidertheir tradinginterestsandpresentthem clearly andstronglytokeypolicy-makersonall sidesofthenegotiationstoensuretheir futuresuccess. Alongsidetheseopportunities,however, areunprecedentedrisks.Increasingly engaged activists,controversyaround traditionaltradeagreement clauses includinginvestorstatedispute settlement,intellectualpropertyand agriculturetariffs,combinedwiththe electionofanti-tradepopulistleaders aroundtheworldmean thatglobaltrade liberalisationcannolonger be takenfor granted. Forbusinessestosucceedinthis environment, itisessentialthattheyhave therightsupportfromthebeginning of thenegotiationprocess. Theyneed tostartthinkingactivelyabout howtoengage Westminsterand Whitehall,aswell astheEuropean Commissionandforeign governments,on theirprioritiesandcannotassumethat theseactorsunderstandtheirsectoror theirneeds. Companiesandsectorsthatfailtoget theirprioritiesintothegovernment's negotiatingbriefwill be playingcatchup forthenext fiveyearsormore. TohelpclientsprepareforBritain’spost- Brexittradingenvironment,Brunswick hasan unparallelednetwork ofEuropean andinternationalofficestoprovidecritical adviceandsupportbefore,duringand afterthenegotiations. Thisnote looksatthedifferentscenarios forpost-Brexittradeanddistilssomeof thekeyadvicefromrecentBrunswick eventswithtradenegotiatorsso companiescanpreparetheirengagement strategiesandensurethebestoutcomes fortheirbusinessandsector,no matter theshapeofthefinaldeal.
  3. 3. Brunswick Group Brexit in perspective © Brunswick 2017 | 3 Investor State Dispute Settlement (ISDS) ISDS isa standardprovisionin FTAs and BilateralInvestmentTreaties (BITs),thatallowscorporationsto takegovernments to binding arbitrationin the event of legislation thathurtsexpectedfutureprofits or interest,if there is expropriation, discriminationor denial of justice withinthe country of investment. Whilstthe broadframework is standard,ISDS provisionsvary considerably amongagreements. ISDS hasbecome increasingly controversial asNGOsand protest groupshaveaccusedcompaniesof exploitingarbitrationprovisionsin FTAsand BITsin order to overturn domesticlegislation,in oppositionto publicinterest.Much of thestrong oppositionthathelpedderail the proposed EU- USFTA(TTIP)was basedon concernsaroundthe proposed ISDSprovisions. Trade rules at aglance The UK entered the WTO as part of the EU and will need to disentangle its current membership as part of the Brexit process. The UK’s tariff levels for goods and services are currently agreed and listed as part of the EU’s schedules. Britain has committed to replicating its current schedules as far as possible to ensure a predictable and comprehensive outcome. The WTO uses members bound tariff rates and the most favoured nation (MFN) clause to keep tariffs down. Members may apply tariff rates below their binding agreements, but cannot raise them, and members must offer all others the same tariff rates they offer to their MFN partner. Countries may, however, enter into bilateral and regional FTAs without offering the same tariff reductions to all WTO Members provided that they have established free trade on substantially all trade within the FTA, and that the parties do not raise their tariffs or other barriers against countries outside the agreement. In the event of a country breaching WTO rules, it can be taken before the WTO’s dispute resolution system by another member. Dispute resolution decisions may involve the application of punitive tariffs. The UK’s new schedules will need to be agreed by all of the other 163 WTO Member States as part of the WTO’s consensus decision making process. In the absence of EU Membership and ratified Free Trade Agreements (FTAs), Britain’s ability to trade around the world is governed by the World Trade Organization (WTO). The UK is leaving the EU Single Market and Customs Union. What is the global trade framework? World Trade Organization
  4. 4. Brunswick Group Brexit in perspective © Brunswick 2017 | 4 European Union Free Trade Agreement 17,571 19,484 20,098 21,307 44,343 Volume of trade in £ million 14,004 14,343 15,580 22,424 22,823 Volume of trade in £ million The UK’s proposednegotiationof an FTA withthe EU is unique in trade negotiationhistory.Bothsidesare alreadystartingwithzero tariffson goodsand a commonregulatory framework. The UK Government’sWhite Paper confirmsthatBritainwill be seeking continuedtariff-freetradein goods, meaning thattheprimaryfocusof the negotiationsislikelyto be servicesand regulations,althoughagricultural productsand movement of labourare alsolikelyto provecontentious. Implementing a customsborder between the UK and the EU will posean enormouslogistical challenge,almost certainlynecessitatinga transition periodasthe new arrangementscome into force. Expectations arefor the final deal to resemble the EU Canada‘Comprehensive Economicand TradeAgreement’ (CETA), the EU’smostrecentlynegotiatedand ambitioustradeagreement. CETA provides fortradeliberalisationand reducedbarriersacrossareassuch as investment,government procurement, labourand the environment as well as goodsand services.CETAdoesnot, however,coverfinancialservices –a key negotiatinginterestfor the UK in itsdeal with theEU. Given the startingpoint,the UK islikely to seek a deal with the EU thatimproves on CETA’soutcomes,particularlyin services andagriculture,an outcome commonlyreferred to as ‘CETAPlus’. The final deal will alsoneed to agree a mechanismfor addressingdisputes between the parties,anotherpotential flashpointgiven UK determinationto ‘take back control’of itssovereignty, as well as the currenthostilepublic environment towards ISDS. As withCETA,any tradeagreement between the UK and the EU will almost certainlyneed to be ratifiedby all member states,includingby nationaland sub-nationalparliaments,aswell asthe EuropeanParliament.Thisisa complicatedprocess whichcan takeup to a year depending on parliamentary schedules andisvulnerableto opposition from special interests.In particular,the deal risksattractingthe ire of anti-trade groupswhichhavebeen vocalin their oppositionto CETAand to the proposed EU FTA with the USA (TTIP). It will thereforebe extremely difficult to concludeand ratifya comprehensiveUK- EU FTA before March2019,when it is expectedthatBrexit will take effect. Top 5 UK Exports to the EU (2015) Top 5 UK Imports from the EU (2015) Other Business Services Financial Services Motorvehicles,trailers and semi-trailers Chemicalsand chemicalproducts TravelServices Motorvehicles,trailers and semi-trailers Computer, electronic & opticalproducts Pharmaceutical products& preparations Foodproducts Chemicals& chemicalproducts
  5. 5. Brunswick Group Brexit in perspective © Brunswick 2017 | 5 8,338 10,450 16,313 19,762 100,273 Volume of trade in £ million EUtradeagreements inplace /provisionally applied EUtradeagreements finalised butnotyetapplied EUtradeagreementnegotiations stillongoing (atleastpartially) As well asunfettered accessto theSingle Market, leavingthe EU will mean thatthe UK will loseitsaccessto preferential tradewith the over 60 states withwhich the EU currently hasFTAs. Althoughthe UK could attempt to transposeitssharein theseagreements into nationallaw,disentanglingquotas and tariffrates,particularlyon agriculturalproducts,may prove substantiallymore complicatedthan negotiatingnew agreements from scratch.As theexisting EU FTAsalso reflectcompromiseoutcomesbetween all 28 Member States,the UK shouldbe able to seek better targetedoutcomesfor itsbusinessesand consumersthrough new bilateral FTAs. Whilstthe UK is technicallyprohibited from negotiatingseparatebilateralFTAs aslong asit remains an EU Member, Britain’sGovernment hasstatedits desireto begin exploratorydiscussions with keybilateralpartnersto enable it to rapidlynegotiateFTAsfollowingits formal exit from the EU.Agreements havebeen proposedwith the US, Canada, Australia,New Zealand,SouthAfrica, India and China,among others. Despitestrong politicalsupport,bilateral agreements cannotbe finalised until thirdcountriesknow the outcomeof the UK/EUnegotiations and theUK’s final WTO schedules. Top UK non-EU Export Goods and Services Partners (2015) USA Switzerland China Japan Australia Top UK non-EU Imports Goods and Services Partners (2015) USA China Switzerland India Japan Existing EU Agreements 9,605 9,793 12,125 39,288 60,955 Volume of trade in £ million Bilateral Free Trade Agreements
  6. 6. © Brunswick 2017 | 6 Brunswick Group Brexit in perspective Brunswickhasheld a numberof recentevents withcurrentand former tradenegotiators.Here is theiradvicefor business. 1. Businesses need to start thinking now about howto engage key governments on trade negotiations. Do not wait for negotiating stances to become clearer as it may be too late. 2. Companies cannot assumethat negotiators understand their business or sectoral needs. They must spend thetime and appropriate resources to do necessary analysis themselves. 3. Businesses shouldwork with their sector to ensure that– where possible –theyhavea coordinated approach to thenegotiations. 4. Businessshould ensure thatthe specific disruption caused by lack of trade is communicated and understood. 5. Companies and sectors need to map key stakeholders in the negotiations both within ministries and parliaments. 6. Businessneeds to engage at every level of each government involved in thenegotiations in order to ensure thebest possible outcomes. 7. Businesses and industry groups are more likely to seetheir priorities represented in trade negotiations if theyformulate clear and practical proposals that negotiators can feedinto thedraft agreements. 8. Businesses need to understand the scope of thenegotiations, in particular where other sectoral interests may impact their priorities. 9. Businesses shouldconsider whetherto influence thedebate publicly via themedia. 10. Companies need to be prepared for potential public opposition to trade agreements and make sure theyhaveclear and effective responses. Securing YourTrading Future 10 tips fromtrade negotiators © Brunswick 2017 | 6
  7. 7. Brunswick Group Brexit in perspective © Brunswick 2017 | 7 Brunswick Group Offeringatrulyglobal perspective Brunswick is an advisory firm specializingin critical issues and corporate relations. Aglobal partnership with 24 officesin 14 countries. Founded in 1987, Brunswick hasgrown organically, operating as asingle profit centre – allowing usto respond seamlessly to our clients’ needs, wherever theyare in theworld. Ourtrade expertise includes partners across our global network toensure clients engage with key stakeholders at every level across countries and institutions. Ourteams work closely with colleagues worldwide to deliver international intelligence, advice and campaigns. ContactBrunswickBrussels BrunswickGroup 27 Avenue des Arts 1040 Brussels Belgium + 32 22 35 65 10 brusselsoffice@brunswickgroup.com www.BrunswickGroup.com For more information contact our offices in London and Brussels ContactBrunswickLondon BrunswickGroup 16 Lincoln’s Inn Fields London WC2A3ED United Kingdom +44 20 7404 5959 londonoffice@brunswickgroup.com www.BrunswickGroup.com Brussels PhilippeBlanchard Brussels LinusTurner Brussels NickBlow London StuartHudson London SumeetDesai London AndrewPorter Berlin UlrichDeupmann Milan AlessandroIozzia Paris NicolasBouvier Stockholm HenrikBernitz Vienna RonaldSchranz NewYork RichardJacques WashingtonDC NealWolin Beijing MeiYan Mumbai KhozemMerchant