February Update

February Update

A Message From Duncan Edwards, CEO

The tendency for short term issues to overshadow long term challenges of perhaps greater consequence is understandable. In business, fire fighting and the daily reality of an in-tray, sucks up time which most executives know needs to be spent on longer term thinking, planning and investment.

There is some of this in the Brexit debate that is overwhelming the political and economic discourse in the UK; the issues are important, and are absolutely worth the time being spent on them, but should not be confused with the much greater long term challenges that individual industries, and the whole of business, face. Technological driven change, shifting cultural attitudes, broader geo-political tensions and a real challenge to the idea that business and trade is the principal driver of prosperity, have the ability to kill industries.

Manufacturing businesses in Britain are rightly deeply concerned about their supply chains and UK CEOs of multinationals fret about how to attract capital from their HQ, but fundamental systemic changes will have a much deeper impact. Sensible analysis needs to separate ‘Brexit effect’ from the impact of other challenges and this is not always the case.

It is a tough game predicting how Brexit will ultimately resolve itself but our sense continues to be that the Withdrawal Agreement will ultimately get adopted with some form of quasi legal tweak to the backstop. With time running out the alternative looks more and more like some version of ‘no-deal’ with all its attendant consequences which we continue to advise against.

In the US, the government shutdown is finally over, but the question of funding for the border wall has been postponed, not solved. As the President made clear in his State of the Union speech on Feb 5th, he sees this as a clear part of his mandate and we anticipate more confrontation before this issue is put to bed. People will take from the speech a reflection of their own political views, as usual, but at least it was more optimistic and collegiate in tone than the awful inauguration speech of two years ago. For business, we should note the resolute commitment to re-negotiate the trade relationship with China and the concept of a Reciprocal Trade Act, introduced to Congress this week, allowing the US to impose tariffs, and other measures, on imports equal to those on its own exports. This would mean a departure from one of the principles of the WTO but it feels like there is support for this part of the President’s agenda. EU and UK trade negotiators should take serious note. As an organization that believes in the benefits of free and open trade, these developments are alarming; it feels like it is time for a fresh and urgent debate about the multilateral trading rules before things escalate further.

Here at BAB, in London and New York, we are well into our stride of events and programming for the New Year. Our ongoing agenda will include all of the networking opportunities our members value as well as an increased focus on the key policy issues for businesses active in the US/UK corridor. We look forward to seeing you along the way.