For business' sake, UK should stick with EU

Tom Barfield
Tom Barfield - [email protected] • 2 Jun, 2015 Updated Tue 2 Jun 2015 16:37 CEST
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Andreas Meyer-Schwickerath, Managing Director of the British Chamber of Commerce in Germany (BCCG), exposes the stakes and consequences if Britain votes to leave the European Union in 2017 in an interview with The Local.

Meyer-Schwickerath has been working at the BCCG since 2003, coming from a background in industry and banking.

In that time, he's seen growth in trade between Germany and the UK balloon.

Figures from UK Trade and Investment (UKTI), the British government's trade promotion body, show that bilateral business has increased by 21 percent since 2009, to £43 billion (€59.16 billion), making the Federal Republic the UK's largest European trading partner.

British companies employ 200,000 people in Germany and represent one tenth of all the foreign businesses present in the country.

On the German side, the UK was behind only France and the United States in its appetite for the country's exports in 2014, splashing out almost €85 billion according to statistics from the Federal Statistics Office (Destatis).

And Germany spent almost half as much money as it earned from selling to the UK on buying British products.

Those numbers are big enough to make the British government's plans for a referendum on leaving the EU, if its demands of fellow members for a renegotiation of the relationship aren't met, a serious concern to business people on both sides.

Bad for business

"The overall sentiment is that it would not be good for Europe, and it would not be good for Britain," said Meyer-Schwickerath.

"It would also not be good for Germany, because German interests are similar to British interests — for example, on labour or the services sector, which need to be deregulated, but also on migration into our social security systems."

The fundamentally conservative - with a small 'c' - people of Britain and Germany are a good match for one another and an important counter-balance, Meyer-Schwickerath argues, to the more statist, spendthrift instincts of France, Spain and Italy.

And the UK government's tough rhetoric on Europe belies the effort that has been going into building up the relationship in real economic terms in recent years.

Wasted effort

UKTI has "changed its focus since some time ago, more to small and medium-sized businesses [SMEs] trying to export from the UK, they're supporting a lot of SMEs trying to set foot in Europe and Germany," Meyer-Schwickerath pointed out.

Those small and medium businesses are where the largest numbers of jobs tend to be created in an advanced economy.

"We've noticed an increasing number of inquiries to us, trying to find out the conditions for companies to establish themselves in Germany and how to improve their business."

If the UK leaves the EU suddenly, all of that painstaking work will be lost - or at least set back for years.

Europe continues to dominate the UK's export markets, with its top ten trading partners for import and export including only the US, China, Switzerland and Norway from outside the EU.

The EU's significance for Britain "should not be underestimated," Meyer-Schwickerath said.

"Of course everybody's talking about China, where the growth rates are big, and also about India for the same reason, but for the coming years Europe will remain the largest (trading partner)."

Business hates uncertainty

What keeps people like him up at night when thinking of the British referendum and Prime Minister David Cameron's campaign for EU reform is uncertainty, Meyer-Schwickerath said – even though many business people would like to see cuts to some European red tape.

"We are getting into danger that Europe starts again from the particular interests of each country," he said. "This uncertainty is very bad for business, for trade or investment in other countries.

"The other thing is that most of the tariff negotiations would have to be redone. Trade tariffs on products and services might apply again if Britain leaves the EU."

Meyer-Schwickerath points to the difficulty Europe and the USA have had in negotiating what was supposed to be a flagship free-trade agreement, the Transatlantic Trade and Investment Partnership, as an indicator of the time it might take the UK to negotiate a new deal – or multiple new deals – with its EU trading partners if it were to leave.

Small and medium businesses, like many of those that make up the BCCG membership, were asked to contribute to a British review of the balance of powers between the EU and the member states – but many didn't have the expert knowledge to contribute.

"We did a meeting with UKTI and our parent organization [Council of British Chambers of Commerce in Europe, COBCOE] and some business representatives and the outcome was fairly open," with no real consensus about what the best reforms to the EU system would be, Meyer-Schwickerath said.

Give and take

"It's really up to the will of the government," no matter what the facts and statistics say, he concludes.

But for a prudent businessman, the preference would be for a status quo that's proven its worth.

"Of course it's all in the details, there will always be a degree of compromise between the EU and each individual country," Meyer-Schwickerath concludes.

"You give and take in some instances, but in the end, the economic and political union have been to the great benefit of many countries.

"Even though the British and German governments are net contributors, the benefit for business is much greater."



Tom Barfield 2015/06/02 16:37

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