View from the German-British Chamber on the Brexit Situation, with links to key information sources.
Director's Letter - April 2018
Transition phase only grants temporary relief to the business community
With the principle agreement on a transition phase some temporary relief has been granted to the business community. We all hope, or even assume, that the negotiations will go well and that the EU and the UK will be able to agree on a framework of their future relationship by the autumn of this year.
Such an agreement on the future framework is necessary for the transition period to be allowed to materialise. However, there is no guarantee that this will happen, especially as the Irish question remains unsolved. The problem is that none of the current proposals are acceptable to both sides of the negotiation, simply put: an untested, yet to be implemented electronic declaration system (together with a tolerance for some low level smuggling) versus the, for the British side, politically unacceptable continued membership in the customs union for Northern Ireland only.
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.