Lighthouse 7 - What About Business in a Post-Brexit World?

01 Dec 2017

On 24 June 2016, the UK voted to leave the European Union and the latest of our Lighthouse Events held on Wed 29 Nov 2017 explored the subject of 'What About Business in a Post-Brexit World?' with a particular focus in the discussion on business and the Commonwealth.

The panel assembled for this event brought together Arif Zaman, Deputy Director, Centre for Research and Enterprise at LSBM (left of picture), John Pemberton-Pigott, Commonwealth Enterprise and Investment Council (CWEIC) (centre) and Cal Courtney, Director, Centre for Student Engagement, Wellbeing and Success (SEWS) at LSBM (right of picture), who was a (brave!) very late replacement for Shamoy Hajare of Jamaica, Commonwealth Caribbean Young Person of the Year 2016, who was unfortunately unable to attend due to illness.

John Pemberton-Pigott, Commonwealth Enterprise and Investment Council (CWEIC) opened the event:

"We have a mandate from the Commonwealth to promote trade and investment across the 52 countries. The Commonwealth is an organisation that has an enormous potential. It is our belief that trade and investment is the best way to galvanise the Commonwealth into action. What brings them together is speaking english, a shared legal system, shared regulatory systems and shared values, whether that's democracy or the belief in the rule of law. Taken together, suddenly you get a very powerful network for business. 

We don't focus on the idea of the Commonwealth as a trade-block, or that it is the 'answer' to Britain's role outside of the EU. But it is an enormously powerful network of countries, with different levels of development, from Canada and Australia with the latest technology, right down to little, tiny countries in the Caribbean, and enormous giants like India with half of the population of the Commonwealth with 1.5 billion people. That blows everything out of the water as to how the Commonwealth relates as a network.

We are a membership organisation which is a bit of a weird cross between a Chamber of Commerce and a Government agency. Sometimes we pretend to be 'Government', sometimes we pretend to be 'Business'. It is very satisfactory to be able to flick between the two. We see that National Government's are often in a state of paralysis across the world, and we are increasingly seeing that it's city and state governments that are making the running on trade and investment policy and movement of trade.

We don't neccessarily believe that trade deals are that important as an organisation. We've never really focused that much on trade deals. Certainly, here in the UK I'm rapidly having to become a trade policy expert. I don't really understand it and it's enormously complicated. It almost seems like trade policy is done by governments and by academics. It doesn't really relate to businesses day-to-day. Obviously, trade policy can have an enormous effect. I'm not that naive. But it's a triusm that the UK's biggest trading partner is the United States, and we have never had a trade deal with the US. So, we sort of have this context in the UK at the moment that everything is about trade deals and everything is about future bi-lateral relationships. Our relationship with the EU is important, but business can make things happen without those trade deals.

In many ways trade deals are things you need when countries are worried about not getting paid. Providing that security. Providing that rule of law. So, if you don't trust the country to get paid, are you going to trust the trade deal that underwrites it?

So, we believe very strongly that the world is about connecting businesses. We do that by creating our own network. We have a couple of really big platforms. This year we hosted the first ever Commonwealth Trade Ministers meeting, which was in train long before Brexit, but Brexit slightly spoiled the meeting, which was a shame from our perspective. We also organise the Commonwealth Business Forum, which happens alongside the Commonwealth Head's of Government Meeting, which takes place every two years. So, London, again by chance, is hosting next years Head's of Government meeting, where 52 leaders from the Commonwealth are coming together next April.

We are told that Brexit's not on the agenda. Visa's are not on the agenda. Which are the two things that probably 51 of those countries want to talk about with the UK. But, for us, what is exciting is that prosperity is on the agenda. Getting traction behind the idea that the Commonwealth should be about trade and investment, it should be about connecting businesses, it should be about innovation and helping our countries get better at those things. And for us, that is progress, because as far as we are concerned the Commonwealth has made itself irrelevant by not having that focus on trade and investment, and in many ways, that is the point of our organisation, to put trade and investment at the heart of the Commonwealth."

Cal Courtney, Director, Centre for Student Engagement, Wellbeing and Success (SEWS) at LSBM.

"I didn't expect to be here, and so to some extent am 'winging it' today, because when I woke up today I didn't think I would be talking about trade in a post-Brexit world. But I'm very happy to be here, and interestingly, both Nick (Hillman), Deputy Academic Principal and myself attended a conference over the last two days, and one of the panel discussions was about just that, Brexit and what happens next. So, I feel I have been briefed, and I want to plagiarise, and that's not a good thing to do, some of the ideas that were shared yesterday, particularly by Ian Dunt, who is the Editor of A lot of what he said really resounded with me, and the first thing to say is that I'm an Irishman, and I was born in the Irish Republic and the Irish Republic left the Commonwealth during a flurry of nationalist thought, and thats something I always lament, because I think the Commonwealth is an incredible community of people and I would love to see the day when the Republic would join that, now that republican fervour on that island has dissipated somewhat.

But Brexit is an interesting thing to look at as an Irish person, because the only land border that the United Kingdom has is with the Republic of Ireland, and there are interesting things happening on that frontier, which bring into focus the questions that are going to face trade in the future, and I would like to completely endorse what John said about trade agreements. Trade agreements are fantastic things, and historically, when we look at trade agreements, they have played an important role in developing countries and establishing human rights. But trade agreements are not just about having large sovereign entitities underpin trade.

Trade agreements are also about ensuring standards, both for the customers and the merchants, and it's also about protecting infrastructure in different parts of the world. There was an interesting conversation on Radio 4 on monday about sand and the shortage of it, and the need for it, particularly in economies like China, which is growing at a particularly fast rate. And, what  trade agreements can do is bring into focus these needs in different parts of the world, and they can either ignore those needs, or try and ensure that a sustainable path is taken, where the trade from those regions is concerned.

The European Union has been quite successful in negotiating those things. I think that at this point in the whole Brexit thing nobody knows what's really going to happen. Like, the Commonwealth is an amazing market, but the European Union is also an amazing market, made up of many millions of consumers and we do not know what is going to happen. There is a figure of 50 billion being thrown around in the news yesterday evening, that Theresa May has finally decided to give a divorce settlement of 50 billion, on top of potentially 40 billion for pension obligations for British/EU staff, and that's an incredible amount of money. And it's going to have to be paid for in some way. 

One of the points that Ian Dunt was making yesterday was that a huge part of the UK economy is financial services, and that Britain is going to want to preserve those financial services. What Ian is predicting is that the two sectors that are going to pay for that will be manufacturing, as more bi-lateral relations need to be built with China. So manufacturing will suffer, and agriculture will suffer outside the caps and quota system of the EU. So, these are the two sacrificial lambs, if you will, that Ian Dunt is predicting, agriculture and manufacturing, that will be sacrificed to maintain Britain's financial services industry. 

That's something that is very worrying, but something that Arif has been reminding us of with VUCA, that in this volatile, uncertain world, fortune favours the brave perhaps. I was very passionately anti-Brexit, because I believe in the European Union. I'm a historian by temperament. I understand the world historically, and the European Union has done a magnificent job in bringing what was a war-torn continent for centuries to peace, and in establishing levels of human-rights which I benefit from, which we all benefit from. So, it's very painful for me to be a citizen of a country that's leaving, and it's not easy, and it's not easy to be generous to the other side. But the fact is that the decision has been made, and I can't spend the rest of my life moaning and lamenting the exit. 

So that forces me to consider what can things be like in a post-Brexit world. And, given the uncertainty about what's going to happen with trade, and other things, and looking for other signs of the times, I would predict that with trade and business, there is going to be a lot of opportunities for small traders. People talk about the xenophobia in that Brexit vote, and while, no doubt, there was a portion of xenophobia in the decision to leave the European Union, that was not the entire reason. It is unfair to whitewash people who voted for Brexit as xenophobic, as I know many of them who are not. 

But I think that what people were rejecting in that vote were models of commerce that are so alienated from the human being, which are so big and impersonal and which do impoverish regions, and I think if we were to look for something positive in the Brexit vote, it would be that. That people want a different way of doing business. Now, if agriculture and manufacturing are going to face a huge backlash post-brexit, then it's going to be interesting to see how a small business-persons approach to those industries could maybe offer some solutions."

The Discussion

There then followed a discussion concerning how to tap into the second and third generation diaspora, including the Commonwealth First programme (whose next round of funding applications closes on 4 Dec 2017), how business often ignores big geo-political events when expanding anyway, and how business is often haphazard and expansion is often based more around granular events (such as someone going on holiday or emigrating) then it is about what government is doing. That local is important when it comes to business, and concerns over the border issue in Ireland and steel-workers in Port Talbot.

Members of the audience also raised concerns about doing trade deals with countries with concerns over human rights in some of the countries in the Commonwealth, such as Pakistan, Jamaica and Uganda. Another question was also raised regarding World Trade Organisation rules, which explored issues of how significant trade deals even are, given that the audience member contended that the drop in sterling would more than offset any small additional tariff that trading under WTO rules would create, to which John's response was essentially that trade deals are usually 'symbolic, rather than important', especially as the internet has created an ever more borderless world in an increasingly information-led world.

There were also doubts raised about the idea of 'shared Commonwealth values', with the examples of Rwanda and Mozambique being stated, and the 'rule of law', with Zimbabwe being suggested as counter-example against the idea of common legal frameworks in the Commonwealth. Issues were also raised about the likely cost to negotiate trade deals, and if it was even premature to talk about post-Brexit, given that we are still in such early stages. There were also questions raised as to what support may be on offer to businesses.

Thanks to all the speakers and all the members of the audience for coming along.

You can see information about other Lighthouse Events here.

Stuart Brown
Media and Content Manager

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