How Will Brexit Affect UK Trade Deals?
Brexit has been the hot topics in the UK for over two years. UK businesses have already made preparations for potential lower rates of trade due to leaving the European Union.
But will all go downhill from here? Trade deals are integral in sustaining industries from raw material manufacturers to suppliers, but how will Brexit dictate the economic balance of the UK-EU partnership?
Currency at stake?
The pound was overvalued before the Brexit vote, which is why so many speculators and those in the know made a fortune betting against the pound.
Typically, the value of a currency is in part affected by the consensus of its economic current and future standing. Some experts had, before the leave vote, analysed the post-Brexit landscape and subsequently made the prediction that it will preempt a ‘slowing down’ of the economy.
However, these are probably the same ‘experts’ who predicted half a million job losses, an emergency budget and an extra £3,500 a year cost to every household in the UK should we vote to leave the EU.
Customs and trade?
Once the UK leaves the EU, it has to leave the customs union and take back control of the national economy once and for all. In practice, this could mean little difference to how things operate now. German carmakers, French wine producers and service companies which own significant stakes in our infrastructure will not stop trading with us overnight. It is not in their interests to block trade, neither is it our interest to reciprocate.
Countries such as Canada, the United States – in fact, any country which is not in or going to apply for membership of the EU trades freely with the EU. Why should the case be any different for the UK post-Brexit leave date?
What does the future hold in store?
Although Brexit will mean the UK is formally leaving the EU, under article 50 of the Lisbon treaty, the UK is still allowed to renegotiate a new trade relationship with the EU within a minimum of two years.
It is in the interests of the governments of the countries of the EU that a new trade deal is developed. However, the current mindset of some business owners, trade associations and, sadly, many of our elected representatives and unelected peers is one of defeatism and failure.
To sum it up, the future of trade between the UK and the rest of Europe will carry on with little effect. If there is any slight downside, that will be more than compensated by our new freedom to trade freely with other nations without the shackles of a protectionist treaty holding us back.
Business opportunities will be thriving in specific areas after Brexit has happened. We will undoubtedly be pleased to speak with you regarding any commercial finance enquiry. So contact us today with your requirement.
