This essay deals with the withdrawal of the United Kingdom (UK) from the European Union (EU) and the resulting consequences for German companies which have business relations with the UK. The process and the reasons for Brexit will be explained chronologically followed by various consequences for German companies.
The result of the referendum in June 2016 makes the UK the first country in the history of the EU to leave the association of states. The Brexit process and the associated contract negotiations took several years until the UK finally left the EU on 31.01.2020.
However, many aspects – such as trading conditions – have still not been fully negotiated and there will be a transitional period until the end of the year. Since Germany and the UK are major trading partners for each other, there are consequences for German companies in various areas. In addition to the impact on trade, there may also be implications for value chains, employees or even corporate financing.
At a glance
- Grade: 1.3 (1.0 is the best grade)
- Examines potential WTO most-favoured-nation tariffs in EU–UK trade
- 10 sources in the bibliography
- 3 figures
Table of Contents
1. Introduction
2. Context and Evolution of the Brexit
2.1. Outline of the Reasons
2.2. Chronological Development
3. Impacts on German Companies
3.1. Impacts on Trade
3.2. Impacts on Value Chains
3.3. Impacts on Employees
4. Conclusion
Objectives and Topics
This essay examines the background and development of Brexit and considers how the United Kingdom’s withdrawal from the European Union could affect German companies with business relations in the UK. It asks what consequences changes in the trading relationship may have for trade, value chains and employees.
- The political, social and economic background to Brexit
- The chronology of the withdrawal process
- Potential changes to trade conditions and tariffs
- Implications for corporate value chains
- Employment and cross-border labour mobility
Excerpt from the Book
2.1. Outline of the Reasons
The Brexit was caused by political developments in the UK, which in turn were influenced by many factors including social and economic factors and the global trend towards international integration and globalization. As a result of worldwide internationalization, especially in the EU, some groups have benefited, and others suffered. One example is the increasing income gap, which has widened in many parts of the world. Therefore, an anti-globalization mentality has developed in the UK since trade liberalization has failed to spread its benefits. This mentality led, for example, to the desire to end payments to the EU, which the British perceived as excessive. The public consciousness was dominated by the idea that every British taxpayer had to pay a large share of his tax contribution to foreign companies and European institutions each year rather than investing in the national economy. Furthermore, labor mobility and unrestricted migration between EU countries was perceived as negative for the British economy as well. Through Brexit, the UK was given back control over borders and restrictions on immigration.
Another main reason to leave the EU was that the UK would be able to negotiate trade agreements with other countries individually and may be able to negotiate better terms as a result. Even though the UK aims to reap the benefits of the EU and, for example, to remain part of the single market, the UK does not want to subordinate itself to common standards and rules. This aspect affects not only trade but also all regulations, standards and laws in all areas from building regulations to the labor market.
Chapter Summaries
1. Introduction: The essay introduces Brexit and its potential consequences for German companies with business relations in the UK. It sets out the sequence of the discussion.
2. Context and Evolution of the Brexit: This chapter considers reasons for the withdrawal and traces its chronological development, from the referendum through the negotiations and transitional period.
3. Impacts on German Companies: This chapter examines possible consequences for trade, value chains and employees, including tariffs, sourcing decisions and labour mobility.
4. Conclusion: The final chapter brings together the discussion of uncertain future trading conditions and their potential implications for German businesses.
Keywords
Brexit, European Union, United Kingdom, German companies, international trade, tariffs, single market, customs union, value chains, employment, labour mobility, trade negotiations
Frequently Asked Questions
What is the essay about?
It examines Brexit and its potential consequences for German companies that do business with the United Kingdom.
What are the central topics?
The essay covers the reasons for Brexit, its chronology and possible effects on trade, value chains and employees.
What is the primary objective?
The objective is to explain the Brexit process and consider its potential consequences for German businesses.
What method does the essay use?
It uses a literature-based discussion, drawing on published sources and trade statistics to describe the withdrawal process and consider possible business effects.
What does the main discussion cover?
It considers the development of Brexit before examining trade conditions, business value chains and employment.
Which keywords characterise the essay?
Key terms include Brexit, German companies, EU–UK trade, tariffs, value chains and labour mobility.
How are value chains discussed?
The essay considers how changes in the cost of imported intermediate products might prompt companies to reconsider sourcing or production locations.
Why does the essay discuss WTO rules?
It considers the possibility that most-favoured-nation tariffs could apply to EU–UK trade if no trade agreement were concluded.
- Quote paper
- Anonym (Author), 2020, Brexit and its Impact on German Companies, Munich, GRIN Verlag, https://www.grin.com/document/921591
