From shipping to staffing, the Chamber and its partners have the tools to save your business money and the solutions to help you run it more efficiently. Join the U.S. Chamber of Commerce today to start saving.
Earlier this year, the British people opted for change by voting for “Brexit,” calling on the UK government to negotiate an exit from the European Union.
Summer is over, and Britain’s Prime Minister Theresa May has indicated she will invoke Article 50 no later than March 2017, at which point a two-year negotiating period begins. Whether the UK’s move to break with the status quo benefits the country in the long run depends chiefly on the choices the prime minister and her cabinet make in the months ahead.
The U.S. business community has a tremendous stake in the economic success of both the European Union and the UK. After all, the EU-27 will remain America’s largest trade and investment partner even after Brexit occurs. At the same time, nearly one quarter of total U.S. investment in the EU is to be found in Britain. As such, we are eager to see a mutually beneficial economic relationship emerge from the UK-EU negotiations.
Today, as Prime Minister May participates in her first EU leaders’ summit, here are seven key things the U.S. business community would encourage the UK to prioritize as it considers its economic future vis-à-vis Europe:
1. Market Access: The UK should retain unfettered access to the European Market in goods and services.
The UK’s ability to buy and sell products and services freely across the European Union has helped make it one of the world’s leading economies. Already some U.S. businesses have indicated that, without continued seamless market access into Europe, new investment and hiring decisions may well favor other locations. Similarly, the rest of Europe will want to retain access into Britain, the world’s sixth-largest economy.
2. Labor Movement: The British Government should be mindful of the “skills gap,” which saps the competitiveness of industry, and it should craft policies on the movement of labor accordingly.
The ease with which professionals are able to move across the EU has been a major competitive advantage for companies across Britain. The UK should continue to allow the movement of labor without overly restrictive barriers.
3. Financial Services: Firms should retain the right to provide services from the UK to customers across Europe.
Europe has several financial centers, but London is the preeminent hub for capital markets in the region and beyond. Access to London’s capital markets will continue to be vital for other EU member state economies.
4. Regulation: The UK and EU should arrange for Britain to continue to participate in certain common regulatory arrangements where appropriate to avoid additional compliance costs for industry.
The issue of regulatory compatibility, in particular, looms large as the UK exits the EU. Thousands of regulatory policy decisions will come into play, underlining both the complexity of coming EU-UK negotiations and the considerable uncertainty that businesses face. Britain should retain regulatory flexibility but understand that in many instances it will make good business and public policy sense to coordinate across the Channel with the EU.
5. Data: The UK and EU should implement consistent data protection legislation to ensure the free movement of data between the UK and Europe.
U.S. businesses established in the UK need a policy environment which permits the free flow of data between the UK and the EU. Inability to access and process EU-wide data would make the UK a much less attractive place to invest.
6. Tax Policy: The UK should implement transparent and predictable corporate tax policies that will continue to foster foreign investment.
Clear and predictable tax policies are important when companies are deciding on future investment destinations. The UK should maintain a tax structure that will solidify its reputation as an investment-friendly nation.
7. Transition measures should be enacted to limit economic uncertainty.
To foster greater certainty, any final UK-EU deal should include a reasonable transition period for implementation of both market access and regulatory provisions. It is vitally important for consumers and businesses alike that Britain not be immediately cut off from Europe upon conclusion of the Article 50 process.
In short, we are looking for outcomes that do not disrupt business.
You can read a full analysis of what the U.S. business community wants out of the future economic relationship between the UK and EU here.
We believe both the UK and EU should enter these talks with a clear eye toward ensuring a mutually beneficial economic relationship once the UK exits the EU. U.S. businesses are committed to working with the UK government, the institutions of the European Union, and other EU member state governments to ensure that our priorities are taken into account in the debates that lie ahead.