London, June 2017
Danger: BREXIT! Stay back from the cliff edge
Ahead of the General Election in 2001, Tony Blair’s statement of intent was summarised in his famous three word “Education, education, education” quote. Mrs May’s mantra, ahead of the snap election in June, should perhaps be the paraphrase: “Trade, trade, trade”. Rarely, following the Brexit vote last year, has there been so much focus on the critical importance of international trade relations to the UK’s economic fortunes.
For the sake of all our corporate customers engaged in cross-border trade, it is to be hoped that transitional arrangements during the negotiations will ensure continued membership of the single market and customs union. This would at least provide a modicum of stability and certainty while the talks progress, assuming of course that the process manages to survive beyond the initial skirmishes.
In the longer term, a failure to agree terms with the EU on an alternative trading relationship with the bloc will guarantee a harsh exit and the prospect of establishing bilateral trade agreements between the UK and each of the 27 member states. Should this be necessary, the timetable can probably be measured in multiples of decades rather than years.
On the face of it, what with Brexit, an anti-free trade US president in office, and a continuing slowdown in the Chinese economy, the outlook for UK exporters looks uncertain to say the least. Nevertheless, as we at Bank Leumi UK have frequently witnessed, our exporter clients have, time and again, demonstrated their resilience and ability to adapt to geo-political events and adverse economic conditions. Notwithstanding the current headwinds, we have no doubt that they will continue to do so and our Commercial Finance and International Trade Services teams stand ready to support them in whatever way they can.
As both Nicola South, Head of Commercial Finance and John Edwards, Head of International Trade Services highlight in the recent GTR edition, world-wide trade will continue, come what may, and Bank Leumi UK will continue to provide financial solutions to help export managers manage their payment risks and cash flows.
Nicola, John and I will all be attending the GTR UK Trade & Export Finance Conference in London on 15th June and we would be delighted to see you at our stand during the course of the day.
Michael Duval, Chief Business Officer
Bank Leumi (UK) plc.