The
‘debate’ over next month’s referendum on whether Britain should
stay in or leave the European Union heated up so much this week that
it is starting to look like civil war. It seems to be tearing apart
the British Tory government and indeed the whole country. A wider
worry in the event of a Brexit is the collateral damage in Portugal
and other EU countries.
Brexit
cheerleader Michael Gove says leaving would be “an empowering
moment of patriotic renewal.” The Governor of the Bank of England,
Mark Carney, evoked fury in the Brexit camp on Thursday by saying
that leaving might spark a recession. Then the IMF’s Christine
Lagarde weighed in on Friday by saying she had “not seen anything
that's positive” about Brexit. Her remarks were dismissed by Brexit supporters
as “nonsense.”
Lots
of strong opinions continue to be aired, but in truth no one knows
for sure what a Brexit would bring. No country has ever left the EU
before.
Amidst
all the internal rhetoric, scaremongering and false forecasts, a calm but
concerned outlook emerged this week from the British Portuguese
Chamber of Commerce in London.
Founded
in 1911, the BPCC is an independent, non-profit organisation devoted
to promoting commercial links between businesses in the United
Kingdom and Portugal.
The
UK is one of Portugal’s major export destinations, with almost €3
billion worth of goods going there every year. Few countries do more
business with Portugal.
The
BPCC reports that research conducted by international shippingexperts ParcelHero concludes that the impact of a Brexit on this
market could be huge. It could have serious implications not only for
Portuguese traders, but also consumers.
“It’s
impossible to overstate the importance of the EU to Portugal’s
trade with the UK,” writes Keegan Spindler, a member of the
consumer research team.
“The
free movement of goods has allowed British companies to be
competitive in the European market, and the cost of shipping in the
EU is significantly lower than shipping to European countries that
aren’t part of the Union, such as Switzerland or Iceland.
“Our
research suggests that by leaving the EU, the cost of goods imported
to the UK from Portugal could change by as much as 30%. That price
change comes from a variety of factors that include raised shipping
costs, duties and taxes and handling costs.”
Such
a price change would make Portuguese goods less attractive to British
consumers and reduce Portuguese manufacturers’ abilities to compete
on price in the UK market.
Most
Portuguese small to medium enterprises are likely to look elsewhere
for their customers if Britain leaves the EU, but those who don’t
will have all new challenges to deal with, among them paperwork,
customs clearance and duties and taxes. Furthermore, the United
Kingdom will no longer be a competitive target for the logistics
industry, which is likely to mean that shipping costs will rise
significantly, according to the study.
The
UK is expected to be separated from countries like Portugal by a lot
more red tape, making it a much less attractive proposition for
international businesses.
“Our
data suggests that the UK’s departure from the EU would likely
force many SME’s who trade in the country to find new markets for
their goods or be forced to quite literally pay the price. Similarly,
a Brexit would see the cost of importing in to Portugal from the UK
increase, and as Britain is one of Portugal’s biggest importers, it
could be the consumers who end up paying the price.”
None
of the above will apply, of course, if the Great British public
decide on 23 June that voting for Michael Gove’s “empowering
moment of patriotic renewal” would in fact be akin to a
catastrophic moment of total madness.
Which
way will it go? No one probably knows better than the betting
bookmakers. Paddy Power’s latest odds:
* 2/5
in favour of remaining in.
* 15/8
in favour of exiting.
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