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The impact of 'Brexit' on SME's hoping to expand overseas
Since 52% of eligible UK voters chose to leave the EU, there has been debate over when Article 50 of the Lisbon Treaty should be triggered and prominent business figures have weighed in with their outlook on life and business outside of the Eurozone.
A group of over 1000 lawyers from across the country have signed a letter to David Cameron stating the ‘advisory’ nature of the referendum and that it doesn’t automatically generate an exit from the EU. They are arguing that ‘MPs are elected to exercise their best judgement on the basis of objective evidence, to safeguard the interests of the country and constituents for this and future generations.’
The letter states there is a need to come up with a tangible plan for the UKs independence before activating Article 50, with a thorough investigation into costs, benefits and drawbacks before making the final move to withdraw. There has been a division in business opinion on whether or not to leave the EU since the referendum was first announced. Since the vote swung in favour of the ‘leave’ campaign, UK shares have dipped, and the value of the pound fell in the first 24 hours after the announcement, although a slow recovery has been made in the weeks since and with the announcement of Theresa May as the new Prime Minister.
Jonathan Strassberg, US Attorney specialising in trans-Atlantic business at Warner Goodman says: “The risk of a near term recession seems arguably significant. Whether this will remain in the long term has yet to be seen, but we can assume that one result of leaving the EU is the new focus on trade outside of the EU in places like the USA. Having easy trade with the EU has been a great way for small companies to try international trade and export in an uncomplicated manner, often giving them the confidence to look further afield. Without the relatively risk-free first step of the EU, small business owners may be intimidated by any export or expansion at all. Some intrepid and successful companies will simply look elsewhere, but such courage is uncommon, especially in an uncertain market.”
For more information on international business, contact Jonathan or the company commercial team on 02380 717717.
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