Summary of public submissions on Brexit
Following the United Kingdom’s vote to leave the European Union, the Government called for submissions from New Zealand businesses which trade with, or invest in the United Kingdom. The call for submissions was made in August and ran until October 2016.
Exporters and investors were invited to submit details of their company’s business with the United Kingdom, the extent to which they also trade with the rest of the EU, and how they consider the UK leaving the EU may affect their business.
Eighteen submissions were received from 17 New Zealand companies and industry associations operating across a broad range of sectors. A number of submissions were made in confidence, and accordingly submitters and details which could identify particular businesses will not be made public.
What will we do with the submissions?
The New Zealand Government will carefully consider all points expressed in the public submissions.
This information helps ensure the Government has a full picture of the issues that matter to New Zealand companies which trade with, or invest in, the United Kingdom. It will inform the Government’s approach to issues that may arise in the course of the United Kingdom’s withdrawal from the European Union, and allow the Government to more effectively work to safeguard New Zealand’s interests as the process unfolds.
What happens in practice will depend largely on the way in which the United Kingdom and the European Union arrange their future relationship. The withdrawal process will take some time. It remains unclear precisely how, and over what period of time, the process will unfold.
The Government continues to pay close attention to the exit process, to seek to ensure New Zealand’s interests are maintained and advanced.
The potential impacts of Brexit on New Zealand businesses outlined below were key elements of the submissions received. The views set out below are those of the submitters and should not be taken to represent the views of the Ministry or the New Zealand Government:
- Some submitters thought the UK might move towards a more open market, including in respect of tariffs, subsidies, restrictive regulations and market distorting support measures. They indicated they saw this as potentially opening up opportunities to facilitate increased trade flows between the UK and New Zealand, as well as globally. At the same time, other submitters raised concerns the UK may move towards greater protectionism, which would result in market distortion and would weaken global value chains.
- Several businesses emphasised the importance of the UK and the EU respecting their WTO commitments. Some responses highlighted an opportunity for the UK to streamline standards and compliance, which would impact positively on services and goods trade. Conversely, proliferation of regulatory standards, compliance and product registration processes for business and financial activities and goods trade if current EU standards and related processes are not recognised or retained by the UK was seen to be a risk by some. A possible need to engage with multiple regulatory compliance bodies for products entering the EU, if current UK bodies are no longer accredited across the EU was raised.
- There was a general view that loss of market access into the remaining EU27 for New Zealand businesses trading into the EU from an operational base in the UK was possible. This is based on potential changes to customs rules, standards and regulations, intellectual property protection, banking and financial arrangements and a range of other technical and non-technical considerations. Some of these issues are discussed in more detail below.
- A possible increase in barriers at the border as a consequence of potential changes to customs rules for companies exporting goods from the UK to EU27 countries was raised. This includes potential imposition of tariffs, shipping delays and increased paperwork.
- Uncertainty about the tariffs the UK and EU would apply to future trade post-Brexit and how quotas would be dealt with in that context.
- Exchange rate fluctuations and uncertainty surrounding the GBP are currently affecting profits and making financial instruments unattractive.
- Concerns regarding the visa and immigration status of staff employed by New Zealand companies in the UK – EU nationals as well as New Zealand citizens.
- Anecdotal evidence of reduced access to EU scientific research grants impacting New Zealand affiliates of UK research entities.