The Federation of International Associations in Belgium (FAIB) and the Association Leadership Academy are delighted to invite you to a jointly hosted info-debate on “Brexit for Associations”.
On 18th October, the Association Leadership Academy and the Federation of International Associations co-hosted an info-debate on Brexit for Associations.
This was the second such event for the Academy, having organised the first in March 2016 – see associationleadership.eu. There will be a third session in April 2017 to deal with “Brexit: post triggering of article 50”.
The aim of this info-debate was to focus on informing, looking ahead and seizing opportunities. These are unprecedented times and we are entering an era of constitutional confusion.
At this stage, it would be unrealistic to assume that all issues in the relationship between the UK and the EU would be resolved within the two year period set by the Treaty. It is more likely that the two years will be spent discussing and putting in place transitional measures that will regulate the relationship until an agreement has been fully thrashed out and then agreed with the remaining 27 Member States.
If talks on transitional measures are to take place in 5 months’ time, then it is indeed now that representative business associations should assess their own priorities and agree on their own action plan. The Brexit landscape is still, to a certain extent, empty. This however also means that there are opportunities. On a practical level, it is suggested that association leaders:
- Appoint someone in their organisation to monitor developments on Brexit and to gather information and reactions EU wide: analyze these to anticipate and deal with change;
- Create EU wide coalitions with other service or industry sectors;
- Engage on a Member State level since the capitals will have to approve by qualified majority any deal struck at the end of the two years of negotiation between the UK and the EU.
- Finally, start talking to the European Parliament; their consent is required on the agreement.
But first, a little more information and guidance. The panel of speakers was set up to inform from three diverse but complementary angles; political, business and internal governance.
Jonathan Faull would provide insight into the historical and political events leading up to Brexit; Glenn Vaughan would talk about the activities of key British business stakeholders and the guiding principles developed by the British Chamber of Commerce in Belgium and Florence Bindelle would share the steps that she has taken in her finance related association from an organisational and governance viewpoint.
Jonathan Faull, Director General in the Secretariat General of the European Commission, focused on the events leading up to Brexit…. “Where did it all start? Was it 1066?” There has always been an issue between Britain and Europe. Jonathan then skipped “a whole swathe” of political and historical developments to when the pressure was growing on the then Prime Minster, David Cameron, for a referendum that might achieve a new settlement between both parties. There seemed to be two fundamental issues that dominated the referendum discussions; immigration and sovereignty or, “who has the last say”.
He then presented various scenarios ranging from an EEA type agreement, through WTO rules, to the CETA type free trade agreement. He pointed out that CETA was not yet approved since the Wallonian Parliament had blocked ratification, hence in effect preventing Belgium from signing the international agreement and suspending its application worldwide.
The UK government has announced that it will introduce legislation next year, preparing for the repealing of the European Communities Act of 1972 in 2019 and bringing with it the end of direct effect in the UK and Northern Ireland, the jurisdiction of the European Court of Justice and the supremacy of EU law.
An important point to note, therefore, is that since the UK will no longer be subject to the jurisdiction of the European Court of Justice, any upcoming interpretation provided by UK courts on those laws might lead to a divergence of jurisprudence, itself leading to legal and hence business uncertainty.
Another factor that might have an effect on how the Brexit debate unfolds is the number of important national votes and elections that will take place in the coming months; a landmark constitutional vote in Italy in December 2016; federal elections in Germany before October 2017; and French presidential elections in April and May 2017.
Glenn Vaughan, Chief Executive of the British Chamber of Commerce in Belgium, underlined the close business ties between the UK and EU Member States. He noted that the pound sterling was at its lowest in 184 years. This might be favourable for UK exports in the short term but had potential negatives too. He described the highly integrated supply chains of the automotive sector in particular to highlight the complexity of the manufacturing process which took place across the EU. A new Bentley will have travelled 4 thousand miles before formally “rolling off” the production line, ready for sale. Glenn also mentioned potential regulatory costs for example for the pharmaceutical sector.
One of the main concerns was the possible effect of limiting the free movement of persons. This would negatively impact the diversity of skills and drive for innovation in the UK. He pointed out that 25% of engineering start-ups registered in the UK are founded by non-British, EU nationals.
The British Chamber of Commerce in Belgium has led discussions with its members to develop and establish a list of 14 key principles to “make the best of Brexit” see link http://britishchamber.be/uk-eu-relations. The points are set out in six chapter headings; trade and investment, labour market, regulation and law, energy and climate, tax, and innovation.
Finally, Glenn described the proactive initiatives taken up by his Chamber which has reached out to the German Chamber of Commerce for discussion and information exchange. This initiative will also soon include other national Chambers.
Florence Bindelle, Secretary General of the European Issuers’ Association, dealt with practical management matters that should be addressed as a result of Brexit. Her presentation centred on three areas of association leadership: governance, financial sustainability and representativeness for advocacy activities.
On governance, Florence urged participants to look at their statute clauses on both the purpose and activities of the association, and those related to membership. Should the clause on purpose and activity refer to an EU territory, laws or institutions, these terms should be amended to specifically include the UK, beyond the borders of the EU. Should the clause on membership be limited to the EU Member States, and you wish to retain your British member, Florence again advises amending the clause to clearly include the UK. She pointed out that the UK based member might seek to modify the category of membership should the association present such a choice.
Florence however, then concluded that it is likely that UK members will re- assess their own level of participation in working groups and committees – there is still a lot of uncertainty.
On the matter of financial stability, she warned of a loss of income due to the potential loss of the UK membership but also to the devaluation of the pound sterling. The impact depends on the business model of the organisation in question. Should the association be entirely “internally” funded through membership fees, a low impact is expected. However, if the association depends on events and training that might take place in the UK, then the negative effect on revenue can be quite substantial.
On the last matter of representativeness and advocacy activities in Brussels, Florence Bindelle asked whether we would see a consolidation of lobby positions or the emergence of a new British multi-sectoral lobby coalition.
She stated that the associations of the financial sector active in Brussels decided to regroup and monitor developments together, sharing relevant information on political events. The leaders hold conference calls every two weeks and are measuring the impact of withdrawal on all regulatory files. The group are identifying threats and opportunities and see Brexit developments as an opportunity to address existing gaps and uncertainties.
This was a positive note on which to close the debate after a Q&A session. The vote on the UK referendum on EU membership was heavily influenced by politics rather than only economics. The ensuing discussions and negotiations are likely to follow in that vein. It is for association leaders to steer a steady ship through the choppy waters of the English Channel and find constructive solutions for their respective business sectors.