View from the German-British Chamber on the Brexit Situation, with links to key information sources.
Director's Letter - June 2018
It is time to get down to business again
The Royal Wedding was a welcome distraction for a few weeks but now it is time to get down to business again. With the Brexit deadline slowly but steadily approaching, time is running out and one does not have the feeling that this urgency is felt by everybody.
The discussions about the future customs arrangement show that there is more than one devil in the detail. Whatever the future arrangements will be, the idea of frictionless trade may well turn out to be an illusion – and this may not be the only one. Let us remind ourselves that, independent of any transition period, which still has to be finally agreed and ratified, Britain will be leaving the EU on 29 March 2019. Therefore “business as usual” will no longer apply in a significant number of instances from that day onwards, as Britain will cease to be part of many agreements the EU has concluded on behalf of all member states.
EU Preparedness Notices
On 29 March 2017, the United Kingdom notified the European Council of its intention to leave the European Union. Unless a ratified withdrawal agreement establishes another date or the European Council, in accordance with Article 50(3) of the Treaty on European Union and in agreement with the United Kingdom, unanimously decides that the Treaties cease to apply at a later date, all Union primary and secondary law will cease to apply to the United Kingdom from 30 March 2019, 00:00h (CET) ('the withdrawal date'). The United Kingdom will then become a third country.
These notices, which aim at preparing citizens and stakeholders for the withdrawal of the United Kingdom, set out the consequences in the following policy areas:
1. Communications Networks, Content and Technology
2. Employment, Social Affairs and Inclusion
5. Financial Services and Capital Markets Union
6. Internal Market, Industry, Entrepreneurship and SMEs
7. Human Resources
8. Justice and Consumers
9. Maritime Affairs and Fisheries
10. Mobility and Transport
11. Health and Food Safety
13. Trade/Taxation and Customs Union
Brexit White Paper
THE FUTURE RELATIONSHIP BETWEEN THE UNITED KINGDOM AND THE EUROPEAN UNION
The Government will have delivered on the result of the 2016 referendum – the biggest democratic exercise in this country’s history. And it will have reached a key milestone in its principal mission – to build a country that works for everyone. A country that is stronger, fairer, more united and more outward-looking.
To fulfil that mission, the Government is advancing a detailed proposal for a principled and practical Brexit.
This proposal underpins the vision set out by the Prime Minister at Lancaster House, in Florence, at Mansion House and in Munich, and in doing so addresses questions raised by the EU in the intervening months – explaining how the relationship would work, what benefits it would deliver for both sides, and why it would respect the sovereignty of the UK as well as the autonomy of the EU.
At its core, it is a package that strikes a new and fair balance of rights and obligations.
One that the Government hopes will yield a redoubling of effort in the negotiations, as the UK and the EU work together to develop and agree the framework for the future relationship this autumn.
The Impact of Brexit on German Businesses
DIHK's nationwide survey "Going International 2018" was created with support from 79 Chambers of Commerce and Industry (IHKs) in Germany. More than 2,100 German-based companies with foreign operations took part in the survey, which was conducted in February 2018. The results of this special analysis of Brexit are based on responses from around 900 companies with significant business contacts in the UK, representing 43 percent of total responses.
The impact on German companies of the departure of the United Kingdom (UK) from the European Union (EU) will be overwhelmingly negative in terms of business, investments and trade. The first signs of this impact are already noticeable: since the Brexit decision, trade with the UK has grown at a much less dynamic pace than it would be expected given the economic context. The specific ways in which conditions for business with the UK will change are still entirely unclear for companies. Almost two years after the referendum and one year after the British government gave notification of its withdrawal, the details are still unclear. A possible transitional phase could mitigate the negative consequences, but at the same time threatens to prolong the uncertainty. But some companies are already planning to shift their investments, primarily to other EU countries.
See the full results from the survey here
Brexit Business Check-List
The UK’s impending departure from the European Union will bring change for businesses of every size and sector.
While some companies are already planning for the challenges and opportunities ahead, Chambers of Commerce believe that all firms – not just those directly and immediately affected – should be undertaking a Brexit 'health check', and a broader test of existing business plans. Time spent thinking through the changes that Brexit may bring to your firm could yield real dividends in future.
While the final settlement between the UK and the European Union is still to be negotiated, there are steps that businesses of all sizes can take now to start planning ahead. Recent Chamber surveys have asked:
- Have you / your management team devoted time to considering the potential consequences of Brexit – direct or indirect – on your businesses?
- If you have one, have you consulted with your Board of Directors on Brexit – or scheduled an opportunity to do so?
- Have you mapped your supplier and customer base – and considered how changes in the UK-EU trade relationship could affect them?
This checklist has been prepared in response to the findings, which suggest that a significant number of firms are either watching and waiting – or taking no action at all. We hope you find it useful as a basis for business planning at both operational and Board level.
Northern EU Chambers
An alliance of northern European Coastal Chambers accounting for 70% of EU-UK trade urge British and EU negotiators to create clarity on a future trade friendly relationship as soon as possible now that sufficient progress has been made.
The Federation of Belgian Chambers of Commerce represented by Voka - Flanders Chamber of Commerce and BECI - Brussels Chamber of Commerce, the British Chambers of Commerce, Chambers Ireland, the Danish Chamber of Commerce, the French Chamber of Commerce and Industry, the German Chambers of Commerce and Industry and the Netherlands-British Chamber of Commerce have today handed over a joint statement to the British and EU Brexit negotiators. They urge the British and EU negotiators to strive for a breakthrough in the first phase of the negotiations to ensure talks on transition and the future EU-UK trade relationship can start as soon as possible.
Countries from the northern European coastal area have always maintained exceptionally good trade ties. Trade between the United Kingdom and the other 6 European Union countries in this area amounted to 344bn EUR in 2016, accounting for 70% of the total EU-UK trade. The English Channel, located in the middle of the North Sea area, is for example the world's busiest shipping lane, with more than 500 vessels passing through the strait on a daily basis, as well as being a key transport link between the EU and Ireland. A sudden and chaotic disruption of trade in this region would have a substantial economic impact that should not be underestimated.
The northern European Coastal Chambers were therefore pleased to learn last Friday that sufficient progress has been made in the first phase of the Brexit negotiations. The Northern European Coastal Chambers now call on the United Kingdom and the European Union to move on to discussing the outlines of a future trade friendly EU-UK relationship that fully respects all aspects of the integrity of the Single Market as soon as possible.
The northern European Coastal Chambers also believe a realistic transition period is needed to provide time for companies to adapt to the new EU-UK trading relationship. A status-quo like transition period - announced with sufficient notice - ensuring the UK remains in the customs union and the Single Market for the duration of the transition period, with all the appropriate rights and obligations, would be best to provide business with the highest possible degree of certainty and predictability.
German-British Business Community
Results of the 2017 Brexit Survey of the members of the German-British Business Community
More than 60% of the members of the German-British business community think the likely effect of Brexit on future investments by their companies in the UK will be negative.
30% even think their decrease in investment will be greater than 10%. By contrast only one in twenty (5%) think Brexit will have a positive impact on their future investments in the UK.
For a full analysis of the survey, please click here.
Ireland, Germany & the EU
September 2017 - Meeting the Brexit Challenge
Ireland is the only EU member state to share a land border with the UK - where Northern Ireland meets the Republic of Ireland.
There is free movement of people and goods across this border. 30,000 people cross the border between Ireland and Northern Ireland every day to work or visit family and friends.
The German- Irish Chamber of Industry & Commerce has published a report on Ireland's connection with Brexit, with a focus on Northern Ireland and the impact Brexit will have on this section of the United Kingdom.
For German companies with links to businesses in Northern Ireland, it is important to stay abreast of developments in this area.
German Irish Brexit Report 2017
Information for EU Citizens
From the European Commission:
What are your EU citizenship rights?
"As a national of the United Kingdom or any other EU country – you are automatically also an EU citizen."
Further details and information
From the UK Government:
Status of EU citizens in the UK: what you need to know
"There is no need for EU citizens living in the UK to do anything now. There will be no change to the status of EU citizens living in the UK while the UK remains in the EU."
Further details and information
Post-referendum German-British business community
December 2016 - The German-British business community hopes for a soft Brexit, but majority expects a hard Brexit
A majority of companies of the German-British business community (56%) believe that in the medium term Brexit will be negative for their business, according to a survey by the German-British Chamber of Industry & Commerce in 2016.
Post-Referendum Survey Graphics
Are you ready for Brexit?
On 30 March 2019, Britain will leave the European Union. This is definite. It is very likely, however, that there will be a transition phase after the exit which will end on 31 December 2020. Although Great Britain will be left out in political terms during this period, everything will remain the same economically due to its membership of the Customs Union and the Single Market. After the transition phase, the United Kingdom will become a third country. Whether it will be possible to conclude a free trade agreement between the EU-27 and the United Kingdom is uncertain. Should an agreement not be reached with a follow-up solution, trade between Great Britain and the EU would take place under WTO rules only.
It is already clear right now that companies need to prepare for changes. There will be a whole range of changes for the worse, especially in relation to the movement of goods. The preparation for Brexit at companies can be extensive – depending, among other things, on the future involvement in Great Britain, the size of the company and the sector. The enclosed checklist is intended to show where companies need to adapt and adjust. We will gradually expand upon and update the topics in the light of the results of the negotiations. For further questions, companies can contact their local chamber of industry and commerce.