by Oliver Duke
With a date now set for the Thursday 23rd June, the UK will vote on whether Great Britain will stay within, or exit, the EU.
Whatever happens on the 23rd, the outcome will have an impact on businesses throughout the country, especially those that export.
So, what will the outcome mean? I asked the European Sales Director at Vernacare and CEO of consulting business Hands Associates Ltd - Hakeem Adebiyi his thoughts and I'm delighted to share his response with you.
One of the hottest topics right now is whether Britain should remain part of the European Union and as an exporter, the decision will have a particularly significant impact on your business regardless of what happens. Now to be clear, I’m not an expert on the EU, nor am I a politician but I have been following the debate closely and like everyone else I have been trying to make sense of all the information.
So what exactly are the pros and cons for exporters if we stay in the EU?
The PROS of staying in
There are quite a few advantages of staying in the EU and as I see them they include:
• Free trade links throughout Europe
• More negotiating power with other countries
• Access to more than 400 million suppliers
Let’s have a look at these in slightly more detail.
One of the biggest advantages of being in the European Union is the fact we benefit from free trade. The majority of businesses in the UK carry out most of their trade within Europe and therefore, if we were to leave the EU, it could well put the European trading market in jeopardy, making it much harder than it is now. The BBC highlights how if we were to leave the EU, exports would be subject to EU tariffs.
Currently UK companies have access to over 400 million suppliers. If we drop out of the EU, it would prove more difficult to find different suppliers as well as new customers for over half of the country’s current exports.
Did you know that a lot of international companies based in the UK are here purely because they can get access to EU markets? If that were to change, those businesses would likely move, potentially causing economic decline.
Of course, staying in the EU doesn’t just make it easy to export to European countries, it also helps to improve your chances of exporting to other countries too. The EU currently has 46 free trade agreements with countries outside the EU and is in negotiations for more.
So there are clearly advantages of staying in the EU (certainly not exhaustive but what I thought were the key points), what about the cons?
The CONS of staying in
Some disadvantages of staying include:
• Limits trade to fast-growing international markets
• UK businesses not trading in the EU are still bound by strict rules and regulations
• Europeans can migrate to the UK, potentially jeopardising the job market for UK residents
Some experts do argue that staying in the EU limits trade within other non-EU countries. Specifically, if we did leave the EU, the UK would then be able to develop bi-lateral trade agreements with increasing export markets in countries such as Singapore, China, India, Brazil and Russia. So staying in could be affecting our chances of having better trade deals with these fast-growing export markets.
Another potential downfall of staying in the EU is that it currently has a negative impact on small and medium size businesses that don’t trade with the EU. It’s thought that around 90% of the country’s economy isn’t actually involved in the EU, yet businesses are still required to adhere to strict rules and regulations. Experts say that if Britain was to leave the EU it would open up an estimated 1 million jobs based on reduced regulations.
Lastly, the free movement of people within the EU means that the employment market may be negatively affected as some EU residents are willing to work for less than UK residents.
Overall from an exporters point of view, it seems staying within the EU is the better option. However, there is still a solid argument that leaving could enable exporters to start trading under the UK’s own regulations to bigger markets.
Whichever way it goes, the decision will have a major impact on the export and economic market.
Hakeem Adebiyi, CEO consultancy business Hands Associates
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