The Brexit Effect – International Business Perspectives Revealed at Hogan Lovells Event
14 April, 2016
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Major Brexit event held by Hogan Lovells, the International Chamber of Commerce UK and the Council of British Chambers of Commerce in Europe.
The potential impact of the EU referendum was vigorously discussed this week at an event held at the London office of international law firm Hogan Lovells. The event was held in partnership with the International Chamber of Commerce UK (ICC United Kingdom) and the Council of British Chambers of Commerce in Europe (COBCOE), and included speakers from a number of countries and industries.
The event brought together senior business leaders with the aim of contributing to an informed discussion of the international implications, risks and opportunities that the EU referendum brings. There was a widespread view among speakers that the EU is a work in progress and that - whether the UK chooses to remain or leave – the EU must listen more, and respond to, the needs of business. Speakers emphasised that equally businesses have a responsibility to contribute to informed debate by laying out the facts and being clear about what business needs to thrive and create jobs. There was, however, some concern that referendum campaigning rules would restrict businesses' ability to do this in the coming weeks.
Some of the features of the EU that the speakers wanted to see improve were the decision making processes, as well as reduction in red tape and bureaucracy. But easy access to the common market, and free movement of labour, capital and services were seen as central benefits of the UK's current membership of the EU that contribute to the success of the country.
How businesses in the UK and internationally should be preparing for a potential Brexit was also hotly debated. Interestingly there was also much debate about how businesses should also be preparing for the impact of the UK remaining in the EU and the renegotiation and further reform that would need to follow, which is seen as a core issue that has not received the focus that it should.
The evening opened with a keynote speech from Sir Michael Rake, Chairman of ICC United Kingdom, who highlighted the importance of the international business view and revealed the findings of a survey carried out in partnership with Hogan Lovells’ Constitutional Change Taskforce, canvassing the opinions of international businesses on the potential outcomes of the EU referendum. The survey has revealed that 86% of international businesses support continued UK membership of the EU; with only 1% of respondents indicating that Brexit would lead to more inward investment.
This was followed by a speech from Paul Dreschler, President of the Confederation of British Industry (CBI), who provided a UK perspective on Brexit and emphasised the UK's crucial position as a gateway to Europe.
The evening continued with journalist and TV presenter Kirsty Wark moderating a panel debate. Questions were posed to:
- Sir Simon Fraser, Former Head of the UK Foreign Office and Co-Founder and Managing Partner of Flint Global
- Alan Houmann, Head of Government Affairs for Europe, Middle East & Africa at Citi
- Paul Kahn, UK President at Airbus
- Thomas Spiller, President, British Chamber of Commerce in Belgium
- Lourdes Catrain, Head of the International Trade and Investment Group at Hogan Lovells
Speaking at the event, Susan Bright, Hogan Lovells Regional Managing Partner for UK and Africa, who is leading the Hogan Lovells Constitutional Change Taskforce work around the EU referendum, commented: “As legal advisers with a global network we see our role as informing and facilitating the debate around the EU referendum to help businesses to assess and manage the legal and constitutional effects of a potential Brexit. Much of the debate so far has focused on the impact for UK businesses; however, a Brexit would also have a major impact on other countries and the international business community, so it is important for them to be a part of the ongoing debate.
"Our event this week has enabled senior business leaders to weigh up a range of issues they should be taking into account, whether the UK chooses to remain within or leave the EU. These include potential political disruption and potentially renegotiating our relationship within or with the EU.
"There was also an interesting focus on the UK's participation in key EU debates – whichever way the EU referendum goes, many in the audience last night clearly felt that the UK should be more visible and active in Brussels. Businesses and their advisors have an important role to play in supporting the UK's international engagement."
Sir Michael Rake, Chairman of ICC United Kingdom, said: “This is a seminal moment for the UK and will have major implications for many generations to come. It is vital that this be a fact-based debate. The facts presented in our survey are crystal clear: international business wants the UK to stay in the EU. They think we are better off in the EU and should continue to constructively engage to improve competitiveness and attract FDI."
Howard Rosen CBE, Chairman of the Public Affairs Committee, COBCOE, said: “Our members believe that it’s in Britain’s interest, on balance, to stay within the EU. Our members and research for Evolving Europe indicate that the EU is very much seen as “work in progress” and, moreover, that it must change in a way that actually listens to business. These are the opinions of those enterprises, big and small, who are our commercial friends, working at the “coal face” of international trade, investing in and engaging with the UK, often as part of a complex supply network.”
Sir Simon Fraser, Managing Partner of Flint Global, said: A British exit from the EU would create immediate political, market and regulatory uncertainty in Europe, and could therefore have major consequences in the medium term for international businesses. The aftereffects could include pressure on both the Euro and Sterling, a political crisis in the UK, as well as a boost for anti-EU sentiment in other EU member states. International firms with significant interests in the EU or the UK should think through, in a detailed and systematic way, the risks - and opportunities - that they could face.”
Alan Houmann, Head of Government Affairs for Europe, Middle East & Africa at Citi, said: “Membership of the EU is one of the main reasons Citi’s EMEA headquarters is in the UK. Being in the EU allows us to ‘passport’ our financial services right across the single market, creating efficient access for our multinational clients operating throughout Union.”
Paul Kahn, UK President at Airbus, said: “The success of Airbus Group’s operations in the UK depends on European industrial organisation and integration. If the UK exits the EU, there are likely to be significant changes to the regulatory and economic environment with subsequent impacts on our competitiveness. Though Airbus Group remains fully committed to its operations in the UK and to its employees here, we certainly hope the UK will choose to retain its EU membership which helps to ensure the continued long-term success of Airbus Group’s European industrial model.”
Lourdes Catrain, Head of the International Trade and Investment Group at Hogan Lovells, said "A British exit would have a huge impact on the UK’s trade agreements with countries outside the EU – the UK would have to negotiate 50 or so trade agreements with the rest of the world, simultaneously. There is an assumption that non-EU countries would be queuing to arrange bilateral free trade agreements (FTAs) with the UK but current trends show that bilateral FTAs are not as important as they once were and what trading partners are demanding is regional trade agreements. So, Britain could face certain reluctance to bilateral deals."
For further information on the work the Hogan Lovells Constitutional Change Taskforce is doing to assist businesses in assessing the Brexit effect, please visit the Hogan Lovells Brexit Effect page or view the #Brexiteffect infographic.
Full details of the findings of the ICC United Kingdom survey of international businesses can be found here.