UK elections: what the trade experts say
In the UK’s general election last week, Prime Minister Theresa May and the Conservative party fell short of a parliamentary majority, raising a number of issues for the already uncertain Brexit process and its implications for trade.
The call for a snap election was a bid to improve May’s negotiating hand. Instead, failing to secure the power she needed, May has now lost credibility both at home and abroad.
The Prime Minister has since confirmed her intention to continue as a minority government through forming a coalition with the Democratic Unionist Party (DUP).
We look at some key statements from trade and Brexit commentators below:
EU Brexit negotiator Guy Verhofstadt tweeted: “Yet another own goal, after Cameron now May, will make already complex negotiations even more complicated.”
Michel Barnier, the EU’s chief negotiator for Brexit tweeted: “Negotiations should start when the UK is ready; timetable and EU positions are clear. Let’s put our minds together on striking a deal.”
European Council president Donald Tusk tweeted: “We don’t know when Brexit talks start. We know when they must end. Do your best to avoid a ‘no deal’ as result of ‘no negotiations’.”
Kit Nicholl, Western Europe Analyst at IHS Markit, comments: “The Conservative government’s limited power in parliament is likely to delay Brexit negotiations. Prime Minsiter May could be forced into a more volatile and unpredictable negotiation strategy due to the difficulties in gaining domestic parliamentary support on contentious issues such as the UK’s final EU budget contributions.”
Trade partner at Baker McKenzie, Ross Denton says: “The Election result raises the possibility that the other political parties will become more influential in setting the agenda for the Brexit negotiations and force the Government away from the Lancaster House plan.
“One possible softening could be that the UK remains part of the customs union. This will reduce the barriers faced by UK businesses dealing with the EU-27 but will also drastically reduce the UK’s ability to negotiate trade agreements with third countries. A further softening might open the possibility that the UK moves into the EEA. However, membership of the EEA does not appear to be consistent with the referendum, since the UK would likely have to pay, accept free movements of workers, and have little or no say in the development of laws.”
Senior lecturer in operations and project management at Durham University Business School, Christos Tsinopoulos says: “So far, the only certain thing is the uncertainty. We know from our research that supply chains thrive on information sharing in a stable external environment. Openness to sharing knowledge, ideas, and best practice has been one of the key factors that have so far provided competitive strength for the UK’s supply chain in a global environment. It would be great to see this translated into specific actions as the new government settles in.”
British International Freight Association (BIFA) director general Robert Keen says: “The huge issues concerning international trade surrounding the Brexit negotiations have not changed. What we can state with certainty is that the Conservative manifesto pledged to invest £40bn in transport infrastructure improvements, and expand Heathrow. Those are not Brexit-dependant matters and would be very useful for the BIFA members who manage the movement of goods within domestic and international supply chains.”
Managing director UK at Spotcap, Niels Turfboer, says: “Over the coming years, the new government will play a major role in negotiating the UK’s relationship with Europe and the rest of the world. By doing so, it must factor in the interests of the fintech sector and ensure easy access to foreign markets, as well as the ability to retain and attract foreign workers.”take me back