An end to Brexit whereby the U.K. somehow stays in the EU is the best possible outcome of the three-year saga for U.S. businesses, a U.S. Chamber of Commerce official said, but failing that, a lengthy, orderly Brexit would cause the least harm.
"I think it's fair to say that no Brexit ... is everyone's preference," Marjorie Chorlins, the executive director of the chamber's U.S.-U.K. Business Council, said on a call with reporters April 17. "Well, not everyone, obviously — 52% of the public voted against that — but from the business community's perspective, yes, having Britain remain in the EU is very much a preference."
If the U.K. does ultimately leave the EU, as it is scheduled to do with an Oct. 31 deadline for approval of an exit deal, the transition needs to be as smooth as possible, she added. "The key for us is that, whatever deal is done between the U.K. and EU, and then whatever subsequent deal is done between the U.K. and U.S., together need to create an environment that remains as frictionless as possible," Chorlins said.
Chorlins said that while the Chamber does not have an official position on any withdrawal agreement as details between the U.K. and EU are still being worked out, it is important that the final agreement include a transition period to minimize business costs.
"Whatever terms are finally agreed in the withdrawal agreement, it's essential that that package includes a transition period as is originally envisioned at least of 20 months," she said. "This is important so that business doesn't have to absorb the cost of adjusting twice." The U.K. came close to crashing out of the bloc with no deal at all March 29, its original deadline, and then April 12, before the Oct. 31 extension was hammered out.
The U.S. is the largest investor in the U.K., with U.S. firms having invested nearly $600 billion, according to data compiled by the chamber.
The uncertainty surrounding a potential withdrawal agreement could also have longer-term ramifications for U.S. businesses as President Donald Trump works to secure a bilateral trade agreement with the U.K. House Speaker Nancy Pelosi said earlier in the week that the border between Northern Ireland and the Republic of Ireland must remain open and any Brexit scenario that jeopardizes the 1998 peace accord would mean "there will be no chance of a U.S.-U.K. agreement" on trade, according to The Irish Times.
Aside from the border issue, the U.K.'s departure from the EU could present hurdles if businesses lose a seat at the table via an important business ally as it relates to discussions of rules, regulations and future trade deals Europe could execute.
"Folks who are outside the single market but somehow engaged with the customs union are in effect rule takers," Chorlins said. "From the business community's perspective, it has often been helpful to have the U.K. at the table when the EU is discussing major policy issues because they tend to bring a more pro-growth-oriented perspective to the table."