With the General Election nearing its due date, we and all others are very eager to have a better understanding of how the outcome will affect trade and also businesses. We have found enough information to show you what the implications could be. Have a read at what we have found.
Let's start with the chief economist at advisory group Global Counsel, Gregor Irwin tells GTR.
There are unlikely to be any implications for trade. While Brexit is a central issue, trade policy will be a more marginal issue, although there may be some questions about environmental and other standards in future trade agreements. The market reaction on Tuesday – which produced a small but significant increase in the value of sterling – gives you an idea of what investors think.
So with that, let's explore in a little more detail.
The election is not expected to disrupt the early stages of the Brexit negotiation, which will be more around modalities such as what will be discussed, when and by who. These discussions are expected to be able to continue in the run up to the election, which is scheduled for June 8. The European Council has said the election will have no implications for the EU’s plans to finalise its negotiating mandate at the Brexit summit on 29 April. Bigger political decisions will have been on the agenda for much later as they require the new German government to be in place following elections there in September.
The election could however have significant implications for the UK’s negotiating position.
“The campaign – and the platform the Conservatives stand on – has the potential to soften or harden the UK’s position in critical areas, as May, eyeing the prospect of a sizable majority and a personal mandate, will know, this is the moment when she can redefine what Brexit ‘means’. Hard-line eurosceptic backbenchers will struggle to oppose her if she wants to soften Brexit in some areas; equally, a weak opposition will struggle to prevent a hardening in others if that’s what she chooses,” says Irwin.
May will be constrained by the Article 50 letter and having to stay outside the single market and customs union, but a win would provide room for manoeuvre to define exactly what she means when she says she wants a “close partnership”.
EU leaders gave vague statements on the announcement. President of the European Council Donald Tusk tweeted that he had a “good phone call” with May on the upcoming elections, before tweeting a more cryptic message reading “It was Hitchcock, who directed Brexit: first an earthquake and the tension rises”. Meanwhile, the European Parliament’s Brexit co-ordinator Guy Verhofstadt said the election was a chance for the UK “to express themselves on how they see the future relationship between their country and the EU.”
Extracted from Global Trade Review. Read more here