04 July 2016

What Brexit means for your supply chain

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The disruption may be over 15,000 kilometres way but foreign affairs experts say the shockwaves from Brexit will be felt across the world.

Australia and the EU were preparing to hold preliminary talks about a free trade agreement which are now likely to be put on hold. Australia will now have to negotiate a separate deal with the UK. Given that Britain will now have to renegotiate its trade and policy links with the EU member states, Australia will likely be a low priority, according to the British Chamber of Commerce Chief Executive, David McCredie.

The day prior to Brexit, the Shadow Assistant Treasurer, Andrew Leigh, warned that “for Australian companies that use Britain as an entry point to the EU, it would generate disruption.”

The UK is currently the second largest source of foreign direct investment into Australia and Brexit could potentially bring even more UK interest in Australia. The UK’s access to European markets may be hindered, meaning Britain will look towards other markets- specifically the Asia-Pacific region.

Although possible, this outcome is somewhat unlikely. Despite Brexit, European destinations are still more geographically desirable. Logically you will always be more likely to trade with your neighbours.

The UK leaving the EU could also affect the European policies on movement of people and capital. Europe has been a significant Australian trade destination, but without Britain the EU may shift their trade focus internally. This could compromise Australia’s ability to trade with Europe. 

From an employment perspective however, it appears almost certain to be beneficial to both our job seekers and our employers.

It could become easier for Australians to study or work in the UK as Britain now has the freedom to change an EU migration police which discriminates against our skilled workers.

Jobseeker site Indeed reported that searches from UK residents interested in Australian jobs skyrocketed, increasing by 190 per cent after the vote.

On Friday 24th the Australian ASX fell 4.1%, losing $70bn. The strength of the Aussie dollar against the British pound is now our biggest strength, says Indeed Chief Economist Tara Sinclair; “With the British pound slumping to a 31-year low following the Brexit vote, it gives Australian employers a lot more clout when it comes to recruiting the best and brightest from the UK.”

Although some impacts were immediate, like the sudden drop of the British pound, the aftershocks will continue for the next several years. And I bet you didn’t think Britain got earthquakes.

Claire Dowler is a Conference Producer with Akolade. She recently graduated with a double degree: a Bachelor of Journalism and a Bachelor of Media and Communications Studies majoring in International Communication. Claire minored in sarcasm and puns.

A ballroom-dancer who collects salt and pepper shakers and volunteers for animal rescue, you might say Claire has eclectic interests.

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