The Green Sheet Online Edition
December 24, 2018 • Issue 18:12:02
Brexit and U.S. companies doing business abroad
Michael Salerno, director of global banking at First National Bank of Omaha, www.fnbo.com, sent us his views on how Brexit might affect U.S. companies doing business internationally. The following is excerpted, with permission, from his note:
"As the economy recovered from the global financial crisis of 2008, many U.S. companies expanded to the United Kingdom to reach the European Union market," he wrote. "Such expansion was relatively easy thanks to a common language and similar banking and legal systems in both countries. But then came Brexit. The deadline for the U.K. to negotiate a withdrawal agreement is March 29, 2019, after which time the U.K. must leave the EU, whether or not an agreement has been finalized.
"'No-deal' Brexit would mean that EU law would no longer apply to the U.K. as of March 29, 2019. This would likely have wide-ranging, negative impacts on the U.K. It would also disrupt the global economy. Banking and financial services would feel the most impact, but other service-related businesses would also be affected. U.S. companies operating in the U.K. and providing products and services to other EU countries would have to contend with two sets of rules, regulations and possibly tariffs.
"For companies doing business directly with the U.K., trade agreements are underway that could substantially expand trade with the U.K. U.S. companies that rely on the U.K. as a key element in their EU strategy, however, should be concerned and should have plans in place for both no-deal and negotiated Brexit.
"If significant trade barriers are erected between the U.K. and EU, the U.S. could greatly benefit from expanding trade with the U.K. This potential windfall will ultimately depend on the timing and details of a possible trade agreement between the U.S. and the U.K. In addition to formulating their strategies for responding to Brexit, businesses can lobby U.S. policy makers for favorable trade terms.
"U.S. companies doing business in the U.K. can survive and even thrive with the right strategies in place."
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