Whether you like it or not, Brexit is something we’ll have to live with. There’s (still) a lot of speculation and a lot of noise out there, so this is just very practical, hands-on advice for British exporters regarding business in Latin America:
1- It’s likely to be business as usual for a couple of years at least (the FT says today “from two years to a decade or more”). Britain won’t leave the EU that quickly so all current free trade agreements will still hold.
2- Speak to your business partners in Latin America and assure them that their business is important to you. They will wake up this morning to the news and they will want to hear from you.
3- Most countries that the EU has free trade agreements with, such as Mexico, Colombia, Peru and Chile, are pretty open economies that, in my opinion, will be open to trade with the UK post Brexit. Also, these are the countries with the lowest duties for non-EU products anyway. I’d suggest you check today what the non-EU import tariffs are for your commodity code (HTC): those are the highest duties you’re likely to be paying, the worst case scenario, and take it from there.
4- There are a few countries with free trade agreements with the EU in Latin America that you might struggle exporting to when Britain goes solo. Ecuador is a prime example. And I doubt that a free trade deal with Ecuador will be top of the list for UK trade negotiators. But these are small exceptions and by the time EU trade agreements don’t apply to the UK anymore, the world will have moved on.
5- The biggest economies of South America, Brazil and Argentina, don’t have free trade agreements with the EU so Brexit won’t affect your business there much. If anything, there’s an opportunity now for Mercosur (which comprises those two countries plus Uruguay and Paraguay and, to some extent, Venezuela) to negotiate agreements with the UK (something that terrifies Irish farmers, apparently) but that will take a long time. Watch this space.
6- A short-term plummeting of the pound against the US dollar could help your exports to Latin America so get in touch with local clients or distributors and see if they realise that they could be doing good business right now.
7- If you are starting to explore Latin America and not currently exporting to the region, all that I have discussed in the past in this blog (and my ebook) still holds: Latin America is a continent, not a country, so assess opportunities in each individual market. Every business wants to increase sales, and Latin America is still worth exploring – particularly if EU markets become a bit more challenging. Is this the push British exporters needed to start thinking about Latin America for their export strategy?
In the midst of all the uncertainty British SMEs are experiencing, there is still business to be done and deals to be won in Latin America. If you get distracted and don’t commit to the region, your competitors will. Whether they come from the rest of the EU, the US, Australia, Canada or the rest of the world. There’s no time to lose.
(this article was originally published on LinkedIn Pulse)
