Breaking Down Brexit for Associations

4th December 2017

Just because the UK is leaving the EU, it doesn’t mean they should be left out of the conversation. Now is the time for associations to refocus and adapt to an already changing world. Despite a lack of clarity about the effects of Brexit and what this means for associations, many are looking at this decision as an opportunity to effect change and create EU-wide coalitions. – Words Lane Nieset

“When one door closes, another door opens, but we so often look so long and so regretfully upon the closed door, that we do not see the ones which open for us.” This quote from scientist Alexander Graham Bell couldn’t ring more true today in the time of Brexit, a political situation Europe hasn’t faced and quite frankly, isn’t sure how to face. “We’re not quite certain what questions to ask since the situation changes each day, each week,” explains Dr. Rachel Barlow, senior advisor to Ellwood Atfield and Co-founder of the Association Leadership Academy, whose clients include international and EU business associations. “The UK government doesn’t seem to be in a strong negotiation position with the EU, which is what the EU wants; they want a solution to this.”

With trade between the UK and the rest of the EU worth over €600 billion per year, the UK industry is now looking to avoid what they call a ‘cliff edge,’ the case of there being no arrangement in place by March 2019 when Britain officially leaves the EU. “The way things are looking today, there’s a real prospect of there being no deal in March 2019,” Barlow says. “All of this political discussion doesn’t bode well for business. Brexit means uncertainty, and this has led to 40 percent of UK firms reducing or delaying investment.”

So what does this mean for European or international associations, who may receive EU funding or have English members? According to the Association for Financial Markets in Europe (AFME), whose members comprise pan-EU and global banks, as well as key regional banks, brokers, law firms and other financial market participants: “Brexit will have an impact on both our UK and EU27 members and it will vary considerably across banks, which are conducting extensive planning and putting in place arrangements, including setting up footholds in the EU27, to minimize disruption to their businesses and clients.”

Many associations initially took a stance of neutrality, but now this is starting to change. If associations don’t seek to influence the political situation and be there to defend their business platform, there’s a great risk that somebody else may do that for them.

While some European associations led by British members saw their director generals stepping down following the Brexit decision, others used this as a chance to show unity. “We already have members from Norway, Switzerland and Australia, so why shouldn’t the UK remain a member?” asks CEEMET Director General Uwe Combüchen, who represents more than 200,000 manufacturers across Europe. “We are inclusive. The UK is sitting in all of the meetings. We are standing together here from the employer side, which I understand is not the case for all associations.”

One great example is when CEEMET Chairman Terry Scuoler, who also serves as CEO of EEF, the UK manufacturers’ organization, offered to step down due to the political situation. CEEMET members overwhelmingly responded with a firm rejection his offer. “We want to show unity and that there are no borders for thoughts, no borders for brains,” Combüchen says.

While protecting and including British members is one side of the coin, the other is the very real possibility of UK-based EU associations, such as the European Medicines Agency (EMA), having to leave their current headquarters. EU states may compete to be the new headquarters for powerful European regulatory agencies like this one, where Bucharest has popped up as the unlikely bidder.

 “Bucharest argues that Romania remains the largest EU member state without a European Union agency based in its territory,” said Alexander Smotrov, Global Counsel’s Practice Lead on Russia, the CIS, Central and Eastern Europe, in one of the London-based firm’s recent post. “It will probably resonate with Brussels policymakers already anxious that the Brexit process become neither a policy stitch-up at the hands of Berlin and Paris, nor a carve up of EU assets in the UK between ‘older’ members.”

The full version of this article can be read in the November issue of Boardroom

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