International 2017: What will happen now after the Brexit vote?

The negotiations on Britain leaving the European Union will be starting next year. What do trade fair industry insiders think the consequences of this controversial decision will be?

Many people and experts are still quite relaxed about Britain’s leaving the European Union. (Photo: VisitBritain / Simon Winnall)
Many people and experts are still quite relaxed about Britain’s leaving the European Union. (Photo: VisitBritain / Simon Winnall)

Most German trade fair organises do not expect any significant consequences of Britain leaving the EU in terms of the numbers of British exhibitors and visitors at their trade fairs in Germany. That’s according to a survey of the Association of the German Trade Fair Industry (AUMA), although it should be emphasised that it was carried out before the referendum. The respondents were large and medium-sized organisers of international trade fairs. They did see risks, however, if there should be a significant economic downturn in the UK and if trade barriers are erected. However, even in those circumstances, German trade fairs would still be likely to hold significant appeal for British exhibitors and visitors. Around 5,400 exhibitors and 140,000 visitors a year come from the UK. The UK is thus in the top five countries in terms of participation in German trade fairs. No major consequences are expected in the convention industry or for business with British guest organisers at German trade fair venues. “Here the quality of the location is critical rather than EU membership,” explains AUMA. Regardless of that, German trade fair organisers would very much welcome it if the UK were to remain in the EU (www.auma.de).

The prospects for Europe and the United Kingdom have become more uncertain. (Photo: VisitBritain / Pawel Libera)
The prospects for Europe and the United Kingdom have become more uncertain. (Photo: VisitBritain / Pawel Libera)

The German Machine Tool Builders’ Association (VDW) was less unequivocal about the consequences for machinery manufacturers in advance of the AMB trade fair in Stuttgart. Politically, the vote of the British to leave the EU is a shock, according to the VDW, which organises the world-leading trade fair EMO. This is leading to an atmosphere of general uncertainty in the European economy and a loss of confidence among international business partners. “Now it is essentially about what the road map looks like from this point on,” believes VDW managing directory Wilfried Schäfer. “And about how quickly the politicians manage to reassure markets and investors,” says Schäfer. “Whether the German machine tool industry manages to achieve its target of one percent growth in output also depends on this to a certain extent.” Last year the UK was the 11th most important market for the industry with an order volume amounting to around 313 million euros. The smooth exchange of goods and services between German manufacturers and their British subsidiaries is also a cause for concern. Quite a number of German companies have made investments in the UK in the expectation of stability. “So far the conditions under which their business model will have to function in future are completely unclear,” explains Schäfer (www.vdw.de).

Brexit at Expo Real

Brexit was also the most important topic of conversation recently in Munich. The Expo Real trade fair is not just a real estate industry get-together. “It’s also a chance for experts in global economic development to meet up,” explains Klaus Dittrich, chairman and CEO of Messe München. Accordingly, well-known experts discussed the UK’s decision to leave the EU at the fair at the beginning of October: both opponents and advocates of Brexit. “Holding this referendum in the first place was a failure of the political class in both the UK and Europe,” declared Brexit opponent Howard Bernstein, chief executive of Manchester City Council. “People all over Europe are expressing similar views, particularly when it comes to immigration,” said Bernstein. “Moreover, the uncertainty will continue because it is not clear what form Brexit will take.” On the other hand, Brexit advocate Gerard Patrick Lyons, formerly chief economist at Standard Chartered Bank and advisor to Boris Johnson, declared: “Brexit is a fantastic opportunity for the UK, and the economy will benefit from it greatly in the long term.” Max Otte of IFVE Institut für Vermögungsentwicklung in Cologne describes Brexit as a huge opportunity for Europe: “The British have been cherry picking for 30 years, and that may now be over.” According to star US economist Nouriel Roubini, “Brexit will have less of an impact on Europe than on the UK.” But he also sounded a warning: “Europe must hold together, because you’ll either succeed together or you’ll go under together” (www.exporeal.net).

Author: Peter Borstel

This article was published in TFI issue 6/2016

 
 

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