Brexit is now close to reality, and online sellers wonder what impact it will have on their businesses. The people of the UK voted on Thursday to exit the European Union, which is a group of 28 countries that work together in great part for economic stability. One of the advantages to being an EU member is the right to export and import goods freely with other member states.
A UK exit from the EU would mean it would have to forge new deals will them regarding trade and a host of other issues.
For example, a British citizen can currently travel to and work in any of the other 27 EU countries without visas and work permits (See this page.) Once the UK exits the EU, that freedom will be lost unless it’s negotiated under a new agreement.
As we reported last week, marketplace sellers in the UK seemed unworried about the immediate impact of a Brexit vote in the days prior to Thursday’s referendum, believing their country had plenty of time and leverage to forge new agreements with the EU.
Now that Brexit is a reality, that notion is being challenged. The financial markets around the world fell on news of the outcome, and the Guardian reported that EU leaders want the UK to wrap things up quickly to avoid prolonging the uncertainty around the departure.
The newspaper said some EU countries may push for a harsh settlement with the UK to hammer home the price of leaving in an attempt to avoid a chain reaction of other countries leaving, referring to EU’s challenge of “mounting Euroscepticism.”
Any business that invested in operations in the UK so they could sell goods and services easily throughout the EU may now be rethinking those and any future investments in that country.
As CNBC reported, Amazon may be one such company. In addition, Amazon relies on low wage, often immigrant workers to staff its fulfillment centers, and Brexit means a curtailment of immigrants. And the status of the 3 million EU citizens currently residing in the UK has yet to be determined, according to the Guardian, as well as the 1.2 million Britons living in the EU.
Sellers discussed the impact of the UK’s departure from the EU in industry discussion boards. The fact that it could become more costly for EU shoppers to purchase from UK sellers due to tariffs is one concern. Another concern: sourcing inventory, raw materials, and supplies from Europe could become more costly for UK sellers.
We pointed out some of those concerns in the EcommerceBytes Blog, let us know what you think.
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