After the announcement that Britain would exit from the European Union, the first casualties were the stock markets in Europe as they experienced a major fall, they fell by over 12%. The devaluation of the British sterling pound was another effect as it reached its lowest value ever since 1985. A number of experts have opined that this proposed exit could bring about lasting impacts on the international economy according to Flavio Maluf.
Consequences on the UK Economy
In 2014, the UK contributed about € 11.3 billion and only received € 6.9 billion. This formed part of the reasons why the UK supported its exit from the EU as it increased the pressure of inflation in the country. Paulo Figueiredo, the director of operations of FN Capital feels that this isolation will lead to a drop in the investments that the country receives. It will signal the end of free transit of both goods and people among EU countries thereby bringing negative and unexpected results.
Impact on Foreign Trade
European member countries allow free trade without applying any quotas and tariffs on goods. Following the exit, UK will experience new tariffs that may affect its foreign trade. Flavio Maluf quotes the thoughts of Otto Nogami, a specialist that this exit will enable the UK enter into bilateral agreements that it could not in the past.
Consequences on Brazilian Imports and Exports
Brazil stands to benefit a lot from the exit as it can sign bilateral agreements with Britain. The bilateral agreements were previously negotiated using the EU standards, which affected some products in terms of rates and impediments. Flavio Maluf however, notes that the benefits could be limited as the UK is not Brazil’s key trading partner.
About Flavio Maluf
Flavio Maluf is a mechanical engineering graduate from the Armando Alvares Penteado Foundation (FAAP), Sao Paulo. He went abroad where he worked and studied administration in the New York University. He joined Eucatex Group in 1987 and assumed various positions in different areas. He started off at the trade division and then went to the industrial area until 1996. His father invited him to become part of the Eucatex Group’s executives. After a series of great results and collaboration, he assumed the presidency of Eucatex Group following an agreement by the family and all parties involved.