Dr Carmen Stoian responds to concerns from the British Chamber of Commerce that businesses are being hung out to dry by the government's Brexit negotiations.
At this late hour in the Brexit process if the Government wants to continue with Brexit then there is not too much that the government can do to eliminate uncertainty, at least in the short run. Even if the deal is accepted by the MPs – and that is a big ‘if’ – the future trade relationship with the EU is still to be negotiated, after 29th March.
If the past is anything to go by these talks are going to be difficult and the outcome is still uncertain, as negotiations with the European Union (EU) are about compromises and not about ‘having the cake and eating it’. So firms will still be left ‘hung out to dry’ for a while. The only good thing about adopting the proposed current deal would be that during the transition period that is due to end on 31st December 2020 the status quo will continue. So some certainty will come, at least in the short run.
Can some firms thrive in this uncertainty? Some yes. However, this uncertainty is akin to the institutional voids that characterise many emerging economies and firms in these economies have the ability to make the best of this uncertainty, as they have operated in this context from their very setup. Unlike emerging economies firms, UK firms are used to and expect clarity of rules and regulations in order to succeed.
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