Businesses favour hybrid trade agreement post-Brexit

UK businesses favour a hybrid trade agreement post-Brexit which will allow them to retain access to the European single market but without the restrictive burden of unwarranted tariffs.

The favoured blueprint for the UK’s international trade strategy once it is divorced from the European Union would be a mix of elements from the agreements instigated by Canada and Norway.

This would ensure the UK retained preferential access to the EU single market but without financial constraints. It would also enable the UK to continue to benefit from EU financial services agreements and allow free movement of citizens.

The option has emerged following new research by RSM, which instigated a major survey to assess attitudes towards Brexit and what picture businesses expected to emerge from the ongoing negotiations.

The resultant report, The Global Economy – where next?, details preferences on what kind of trade agreement firms would like to see introduced and which countries are their preferred trading partners.

The agreements Canada and Norway have with the EU were the most popular choices for a post-Brexit environment, each attracting 22% of the total number of responses.

Respondents also pinpointed the United States (40%), Germany (26%), China (23%), France (21%) and India (12%) as their top five trading partners post-Brexit.

These were followed by Japan (10%), Canada (9%), Spain (8%), Italy (4%) and Russia (4%).

Simon Hart, lead partner – Brexit, RSM (pictured) said the results illustrated that the UK was still keen to be a part of the European economic area.

He also said that UK firms were displaying typical British pragmatism towards the current situation; effectively adopting a ‘Keep Calm and Carry On’ approach.

“The sentiment towards Brexit at the moment is one of pragmatism. We are seeing less of a sense of polarisation of views and more realism in terms of ‘Right, we’ll get on and do things’,” he said.

The survey also showed that the Midlands remains the most positive area outside London in terms of the health of the economy over the next five; while it is the single most positive region in the country in the short term (the next two years).

As to whether Brexit posed more challenges than opportunities, Mr Hart said he remained optimistic.

“I think there’s going to be more opportunities. Successful business is reactive, it is fleet of foot, it is also forward planning – it can’t just exist as it did yesterday,” he said.

“I think those successful businesses in the UK – especially the mid-market companies that are growing – are the ones that are going to adapt and seize the opportunities, because there will be.”

The findings of the research were outlined to businesses from across the West Midlands at a special presentation held at The Belfry Resort, featuring both Mr Hart and RSM’s chief US economist, Joe Brusuelas.

The event, in partnership with TheBusinessDesk.com, was attended by delegates from some of the region’s leading businesses.