Interview with Taggart Davis, Vice Chair of the Brexit Task Force, American Chamber of Commerce to the EU (AmCham EU)
How will Brexit affect American Business invested in Europe?
The EU and the UK are hugely important markets for US companies. In 2016, Europe was the destination for some 60 percent of US foreign direct investment (FDI), directly supporting some 4.5 million jobs and generating billions of euros in trade and investment. The UK is the recipient of around one quarter of this investment – traditionally operating as a launchpad for US companies to serve the broader Single Market.
This means that any changes to the current EU-UK trade and investment relationship could have significant ramifications. We continue to call on both parties to work towards an ambitious new relationship that preserves the deep and open EU-UK relationship that has served companies and consumers so well.
What is AmCham EU’s view on Brexit and what are your activities on this topic?
We have been consistent from the very beginning that the EU and the UK should look to deliver the most ambitious and open relationship possible – ideally with the UK remaining a member of the EU Single Market and Customs Union after Brexit. If that is not possible, then both parties should find creative solutions which ensure minimum disruption and maintain the current trade relationship. In the short term, the two parties still need to agree on and ratify a Withdrawal Agreement which will ensure an orderly UK exit and the beginning of a transition period which will give companies time to adapt to new requirements.
Throughout the process, we have been actively engaging policymakers and stakeholders on both sides of the Channel to share our concerns and priorities. One added value of AmCham EU is that we represent a cross-section of industry – meaning that we can share our knowledge and expertise across all sectors and industries. Going forward, our perspectives will only get more relevant as the future relationship is mapped out.
You have addressed the problem of Brexit from a supranational perspective. However, at AmCham Bulgaria we are aware that a no deal scenario would affect small and large business across the continent. What role can EU Member States play to avoid this?
Given the interconnected nature of the Single Market and modern supply chains, businesses around Europe could be significantly affected in a scenario in which the UK and the EU fail to reach a Withdrawal Agreement by next March. A “no deal” would mean that the rules and regulations that govern trade between the EU and the UK would become obsolete overnight – potentially grounding trucks at the border and causing severe disruptions in industries from financial services to manufacturing to retail. Small businesses could be hit worst, as they lack the resources of larger companies to prepare for such a situation.
Clearly, then, governments and trade associations such as AmCham Bulgaria have a key role. National policymakers need to engage and inform their businesses and citizens about the realities of Brexit and put in place measures to mitigate any short-term disruptions in the case of a “no deal”. Business associations can amplify these messages and also work with their member companies to help them plan for the worst case scenario. Currently, we are concerned about the level of awareness among business at local level about the impact of Brexit in both the short and longer terms.
AmCham Bulgaria can play an important role in reminding policymakers that while Brexit may have marginal benefits to EU Member States with some business moving from the UK into the EU27, American business leaders see Brexit as a big disruptor of the stability and prosperity of Europe as a whole with net negative effects. Therefore we need to focus efforts on minimising disruption.
You have been conducting many meetings with Senior EU Officials and Members of the European Parliament. What is the atmosphere around Brexit in Brussels? And how likely is the scenario of a No Deal Brexit, beyond what we hear in the media?
The two parties are working very hard to reach a deal as soon as possible. To this point, the deadline for a deal has been pushed back several times but we hope that a resolution will be found very soon. Certainly, reaching an agreement remains the highest priority for the EU and the UK.
The level of uncertainty for companies, however, remains high as long as no such deal is agreed. As companies, we cannot emphasise enough the importance of avoiding a hard Brexit which would be a major disruption for the European economy and all businesses invested here.
Two weeks ago you attended an event organized by AmCham Bulgaria on ‘Brexit and The Future of Global Trade’. What was your main takeaway and what message will you bring back to Brussels?
I was unsurprised to see it, but hugely impressed by the level of pragmatism from participants and attendees alike at the event. It was a great opportunity to discuss both challenges and opportunities for Bulgaria in the Brexit context. Despite the far distance between Sofia and London in miles, it was heartening to see how close the UK and Bulgaria are and a recognition of the importance of the UK’s role in the transatlantic business relationship. Bulgarians seem very focused on maintaining a strong trade and investment relationship with the UK post Brexit – this is very positive.
Taggart Davis took part in the “Brexit: Future of Global Trade“ Conference, jointly organized by AmCham Bulgaria and the British Bulgarian Business Association on October 25th, 2018 at Grand Hotel Sofia. He is Vice Chairman of AmCham EU’s Brexit Task Force, representing more than 150 companies, primarily US multinationals from across sectors who are invested in Europe. He heads the J.P. Morgan’s Brussels Government Relations office, engaging with EU policymakers on the EU and global regulatory agenda, specialising in banking and investment management regulatory policy and political developments.
During the business leaders panel it was expressed their expectation for a prompt deal agreement, and more clarity from the politicians about the period after Brexit.