Spain Business Brief – Wednesday December 13, 2017

The British Chamber in Spain with the collaboration of Ketchum Public Affairs and Herbert Smith Freehills, presented a study in Madrid ‘Brexit Ambition’ which collects all the uncertainties and risks which are supposed for companies from 18 European countries during the process of the United Kingdom leaving the European Union, whose conclusions were later debated on a round table made up of experts of reputation, including diplomats, jurists, members of the Administration and some 50 businessmen representing companies.

According to this study, European companies with interests both in the UK and the EU showed great concern and feel ignored and uniformed on any progress over the future post Brexit. CEO of Ketchum Public Affairs, José Ramón Caso, who had the job of presenting the conclusions of the study affirmed that ‘the businessmen lament the actual scheme of negotiators by phases established by the European Union which has added more uncertainty’

Among the grand transversal concerns between consulted economic sectors they underline the presence of new tariffs which create customs barriers, regulatory divergence and difficulty for workers who have to cross borders.
‘All this, in economies so integrated inside the European Union, an economic slowdown could last for decades, from the points of view of the participating businessmen and fearing also an increase in costs which would have to be passed on to the consumers’ underlined Caso.

To develop guarantees during this so important economic change, the European business sector reclaims the establishment of a period of transition to ensure the complex challenges on trade, labour and political regulations between both sides. For the professor of International Public Law and for the EU an academic consultant for Herbert Smith Freehills, Antonio Pastor, ‘we need transitory periods. Brexit is incredibly complex judicially, because the United Kingdom wants to remain immersed in the rights of the EU and the international treaties and complicated bilateral agreements, as is already being seen in attempts to reach agreements. Now, doubt is the concrete paper which member states who want to play individually’

British Ambassador in Spain, Simon Manley, also wants a transitory period, ‘We have to work to eliminate this uncertainty and to quickly reach the expected second phase, for the Administrations and companies can start to prepare for the future relationship between the United Kingdom and European Union. I hope we can guarantee citizens’ rights, avoid tariffs and red tape’ he affirmed.

Despite the uncertain result of the talks, the European businessmen are clear, as reflected in the study, that the United Kingdom will continue to be a fundamentally a European economy for the rest of the countries, especially in questions of investigation, research and development, access to financial services and insurances and as a port of entry from international markets. ‘For the consulted directors, the City of London is an ecosystem which is non-transferable to any other European city’, assured Caso.

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The Study in Spain
Participating business leaders in the study in Spain, reclaim the Mariano Rajoy Government to open a fluid and constant two-way conversation with the business sector, with small businesses especially important during the negotiation process.
They also manifested that need for a number of bilateral links with the United Kingdom and the Cabinet defended the most favourable accord around the leadership of negotiations and not let Germany or France dominate. Great Britain was in 2016 the largest European direct investor in Spain. Some businessmen want the talks to close soon over the bilateral rights for residents who cannot become bargaining chips in commercial aspects.

In the same way, his European colleagues, the Spanish directors showed their concern over the current uncertainty over the result of Brexit. New customs barriers, the lack of harmonisation of standards and goods and services or the concerns of the USA and China during the talks, are also situations which could have a very negative result against the competitiveness of businesses in Spain.

For the general director for Integration and Coordination of General Matters of the EU and from the Ministry for Foreign Affairs, José Pascual Marco, ‘one of the grand concerns for the Government is knowing how to transmit calm to our businesses during the process which could be traumatic’ however, Marco warned that ‘the Administration is prepared and coordinated to inform and help the businesses. Also, we know that in this matter, we have to be as transparent as possible, and give all the information we collect’. The general director added that ‘the Government is optimistic ahead of the meeting on December 15 at the European Council, after the pre-accord reached last Friday, and where it offers the progress made to open the second phase’.

Precisely, the study reflects areas of optimism in the Spanish business class with respect to Brexit, which has imposed the project of e-commerce in some companies to open new markets, or to consolidate where they exist, and to compensate against the possible negative effects in their negotiations with the UK.

Other companies are taking advantage of this new era to strategically reform their marketing models or working processes in an attempt to better adapt to the new times. Also, there are relevant companies who see Brexit as a possible opportunity in the short term, although depending on the new legislation obtained from the talks.

For diplomacy, diplomat and president of Rupérez International, Javier Rupérez ‘damage done by Brexit is evident and difficult to control, but we must not make concessions which could complicate matters even further for the United Kingdom. That would be a bad solution and if inevitable we would suffer the consequences. Importantly, we must be prepared in the best possible way’

Over the Brexit Ambition Project

The study, from the Council of British Chambers of Commerce in Europe, contains an initial survey of 100 European businesses to define the areas of most concern, and later a possible round of talks with representatives from 18 of the 27 European States.

In total, 27 round table meeting have been held grouped by companies and sectors and countries. To carry out the study the Council of British Chambers of Commerce in Europe, had counted on the collaboration of partners in every country. In Spain they used Ketchup Public Affairs.

All the information generated in each round table has been complied locally, analysed and included in this report which includes sectors as varied as automation, agriculture, aerospace, financial services, energy companies, insurances, the pharmaceutical, defence, textile, logistic or higher education sectors among others.

IBEX 35 closed down 0.27% to 10,260.50
FTSE 100 closed down 0.05% to 7,496.51
Euro / Dollar closed up 0.22% to 1.177

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