British Bulgarian Business Association response to Theresa May’s Brexit speech

Written by on February 8, 2017 in Perspectives - Comments Off on British Bulgarian Business Association response to Theresa May’s Brexit speech

The British Bulgarian Business Association (BBBA) chairman has been approached by H.E. Emma Hopkins OBE, British ambassador to Bulgaria, with a request to comment on prime minister Theresa May’s recent Lancaster House speech on Brexit. Below is BBBA’s response:

The local context of Brexit
In assessing the impact of this speech on our membership, it is first important to place Brexit in its context as viewed in Bulgaria.

The event is still two years away. There is for the time being no major trade impact as far as Bulgaria is concerned. The speech makes reference to an incremental, phased approach, with a smooth, orderly exit. If this is achieved, there should be no surprises and appropriate business planning can take place on a structured basis. Business needs certainty and the sooner an agreed platform of certainty is agreed by both sides, then the happier business will be.

However, Brexit can also be viewed as the tip of an iceberg threatening established EU structures. We have a number of national elections (including Bulgaria) in 2017, which are being influenced by challenges from populism versus conventional politics, and increasing nationalist temperament in a number of EU countries.

Much has been reported on the stability of the euro zone, and it has been commented that the Commission itself must seek to adapt and change if it is to survive in a new environment. Added to this we have the rapidly changing position of the USA to World trade, with no doubt a number of breath-taking moments in store. These factors could well be seen to have a greater impact on business affairs than Brexit and could happen in a shorter time frame.

Thus whilst Brexit is of major importance to the UK, it is just part of a bigger picture as far as our membership is concerned. Bulgaria tends to think in the short term and from the local point of view the impact of Brexit is still quite distant.

Some immediate concerns
A recent COBCOE survey, in which BBBA members took part, strongly encouraged the UK to remain in the EU. This is unsurprising, understanding that British membership is a minority in joint Chambers in Europe. There is undoubtedly a strong desire to maintain Free Trade by whatever mechanism works. There is no support for the political message from certain quarters that ‘Britain must be punished’.

The desire to control immigration is understood – but must be balanced by the needs of business. UK Companies need to recruit the best talent; and Bulgarian entities investing in the UK want to send in their own management. We must not forget the need for seasonal workers – a welcome source of income for Bulgaria, as well as allowing UK agriculture to price its products competitively. The process for entry clearance should be made simple if it is not to be a barrier for business.

Whilst it was stated earlier that there has been no major immediate impact of Brexit, we have detected a reluctance by UK companies to further develop outsourced solutions in CEE – and Bulgaria has been particularly successful in this area to date. This clearly applies to manufactured goods rather than services, and important decision making has been stalled until it is understood if import tariffs will be applied on entry to the UK.

We have also noted the importance attached to science and innovation. Work in universities has benefitted greatly from the contribution of international students, and we are keen to see that Bulgarian students do not get priced out of the UK higher education system.

We note the emphasis on repositioning the UK as a leader in world trade. We welcome this inasmuch as this would continue to build our bilateral trade activities. It has already been mentioned elsewhere that UK companies are well behind countries such as Germany in getting export minded. We have particularly witnessed this during visits to a number of UK Chambers of Commerce where there is a mixed reception to offers to do good mutual business. We have met a large number of enthusiastic potential business partners, but also have seen a substantial number of organisations that have no interest in foreign trade. This is a major challenge for the UK to face if the May vision is to be realised.

BBBA activity
The BBBA Brexit activity has two main objectives. The first is to educate and inform both our membership, the greater business community and Bulgarian society as a whole, of the key issues in the debate in a timely and coherent manner. This should be done without preconception and from a neutral standpoint, but nonetheless influenced by the business needs of our members. The second is to inform policy makers both in Bulgaria (in our own right) and the UK (as part of our umbrella organisations such as BCC and COBCOE) of the business impact of issues as they are debated in order to get a good outcome.

We do believe that there is a developing role for BBBA to identify the ‘win-win’ scenario and present its view to the new Bulgarian government of ‘what is best in Brexit for Bulgaria’. We shall be considering the best way to do this in the coming months.

(BBAA chairman John Munnery. Photo: provided)

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