“Hope for the best; expect the worst”, “it’s reality TV”, “It’s difficult to know what to do; things change daily.”
Just some of the phrases that emerged from the Brexit debate ‘Brexit – The Interest of the European Business World’ organised by the British-Portuguese Chamber of Commerce with sponsors Deloitte and The Apartment Service (Worldwide) on Tuesday, November 21.
Of course, none in the room at Lisbon’s Hotel Altis were vocally out-and-out Brexiteers, but you couldn’t avoid the sense of pessimism, disappointment, bewilderment and even bemusement at the farce that the British government’s negotiations and changing position has become.
The debate, led by Bernardo Ivo Cruz (True Bridge Consultancy) and hotel entrepreneur Chitra Stern (Portugal In) with moderator Filipe Lowndes Marques was hard on the British Government and referred to “problems”, “constraints” and “opportunities.”
For an Atlantic country like Portugal, Cruz said that the big problem of Brexit is that the UK is a key element in the EU in the Atlantic dimension. This means that with the UK out of the EU, the economic, political and financial centre of the EU will shift away from Western Europe and inevitably towards Eastern Europe with the focus somewhere on the German-Polish border.
This is bad news for Portugal as interest drifts away from the Atlantic countries leaving her in an increasingly peripheral position as a convicted and dedicated member of the EU.
“Portugal is an Atlantic country and will remain so. It is part of who we are and how we look at the world. With Brexit the EU’s Atlantic region will be Portugal, Ireland, part of France and Spain with Portugal and Ireland (neither major powers in the EU) the only two countries making the case after Brexit.”
Why is this geopolitically and economically important? Because Portugal as an Atlantic country needs the EU to see it and its Atlantic heritage as important as a bridge between South America and Brazil and Angola, Mozambique, Goa and Macau.
“We need to address the issue of how to keep the Atlantic a key element of EU policy after Brexit,” said Cruz.
And then comes the question how? Through the EU-International Agreement, particularly the agreement with Canada, Mexico and the negotiated agreement with the Latin America economic community bloc Mercosul which will be signed at the end of the year.
“If we manage to work around those agreements, the Atlantic and Portugal will remain key elements of the EU’s commercial foreign policy and keep both on the EU’s agenda.
“Because of Brazil and our close commercial, political and historic relationship, Portugal can become a key player in the EU-Mercosul agreement.
But why stop at Latin America, Canada and the States which are currently key Atlantic commercial trading priorities for Portugal.
Chitra Stern says that Portugal’s relationship with the United Kingdom will, despite constraints, continue and here Portugal can be an important player in the UK’s current ‘global player’ mantra.
Brazil, Angola and Mozambique are now high on the UK’s priority trading list but as one UK government source stated of the latter two: “We know next to nothing about these African countries.”
Here British firms and government trade and embassy agencies can join forces with Portuguese partners in these African countries to mutually symbiotic benefit.
The CLP (Portuguese-speaking countries) are already key elements to Portuguese foreign policy as the economist Hernani Lopes stated: “Portugal will be important in the EU if it is important in the Portuguese-speaking world; and will be important in the Portuguese-speaking countries if it is important in the EU.”
And that explains why Portugal must keep its Atlantic dimension strong in the mind of policy makers in Brussels.
But what about the impact of Brexit on Portugal and the UK in terms of bi-lateral trading partners?
First up, some facts and figures on UK investment in Portugal. The British are the largest source of Portugal’s tourists; the UK is its fourth largest export market and source of FDI. The stock of the UK’s FDI into Portugal has increased almost 8% year-on-year reaching €8Bn in 2017.
And the fact that the UK is the 2nd largest European investor and the biggest receiver of FDI in the world makes it continue, for now, to be an important player on the European and international stage.
So, what will happen to the UK’s ‘special’ relationship with her oldest ally? The oldest alliance in world history.
Chitra Stern believes it is unlikely to suffer and British companies are unlikely to up sticks and leave Portugal. She says that Portuguese and European companies too can wake up to alternatives to London and Lisbon is an attractive one offering Golden Visas, Start-up Visas and attractive Non-Habitual Resident tax incentives.
That said, one of the main reasons the UK left the EU was “to be able to strike trade deals with other countries outside the EU, outside EU structures and work directly with the world as a ‘global economic player.’
This is all good and well. But the trouble with this mantra is that the World Trade Organisation is interested in countries trading tangible goods rather than intangible services and Britain’s economy is now 75% service-led. She will need to start developing and manufacturing physical goods to sell on the open market if she wants to successfully go it alone.
Text & Photos by Chris Graeme