The Oban Blog

We spoke to our Local In-Market Experts around the world to find out how attitudes towards the UK have evolved since Brexit. Here’s what they told us.

After Brexit, how does the world view the UK?

Over five years have passed since the UK voted to leave the European Union. After the initial shock, followed by years of complex negotiations, the UK finally left on 31st January 2020. The latest economic forecasts imply that it will be a while before we can truly understand the trade impact of Brexit – not least because the pandemic has had such a massive and distorting effect. Most – although not all – of the UK’s major markets are down, but EU markets are no more down than non-EU markets.

British Council research amongst affluent under-35s across 19 countries showed that the British were more negative about the likely impact of Brexit on attitudes towards the UK than the rest of the G20. The jury is still out on how Brexit will impact trade but to find out how international attitudes towards the UK have evolved since the referendum, we spoke to some of our LIMEs – Local In-Market Experts – around the world. Here’s what they told us.

 

Hong Kong

EU flags at the European Commission Berlaymont building

EU flags at the European Commission Berlaymont building

Jie, our LIME in Hong Kong, told us that before the referendum, the prospect of Brexit was generally viewed as a positive thing for Hong Kong. Many believed it had the potential to increase trade and investment flows between the two countries and provide an opportunity for Hong Kong to step up as a hub or gateway to Asia for UK-based companies.

There was also a perception that, post-Brexit, the UK had more latitude to decide its own immigration policy. This meant the UK was able to offer Hongkongers with BNO (British National Overseas) passports a pathway to visas and citizenship. However, Jie said that some Hongkongers, mindful of Brexit, worried about whether they might face anti-immigration sentiment in the UK. Nonetheless, according to the Home Office, in the first half of 2021, about 65,000 BNOs applied for UK citizenship.

Jie cited a business survey which showed that 35% of UK companies planned to focus on non-EU markets post-Brexit, and Asia in particular. This chimes with the UK Government’s ‘Global Britain’ slogan, and some Brexiteers’ insistence that Brexit was about looking outwards beyond Europe, rather than retreating inwards.

Jie felt that services represented a big opportunity for UK and Hong Kong, given that Hong Kong is the world’s most services-oriented economy and the UK is the largest services exporter in Europe. Many Asian governments are gearing their economies towards a service-based or post-industrial future, which represents an opportunity for UK companies.

Jie pointed out that, “As of February 2021, there was no bilateral UK-HK trade deal, so the UK Global Tariff applies. This is good for Hong Kong exporters because it’s simple, easy to use, and offers lower tariffs than the EU’s Common External Tariff. Under the UKGT, nearly 50% of products from HK could be exported to the UK with zero tariffs, compared to the 27% of products under the EUCET.”

 

France

France has its own history with EU referendums: in 2005, the French electorate voted against the Lisbon Treaty – designed to further European integration – with 55% opposed and only 45% in favour. In 1992, the French referendum on whether to ratify the Maastricht Treaty – which, amongst other things, formalised the European Community into the European Union – saw 49% of French people vote against. We asked Tristan, a LIME based in Rennes in northwest France, to tell us more about French attitudes to the UK after Brexit.

Tristan said, “Previously, visiting the UK was easy for French people – all you needed was an identity card and a Eurostar ticket. Now, a passport is required, and stays are limited to three months or less. However, I don’t think this will particularly deter people from going to the UK.

“This also works in reverse: the large number of British people who own second homes in France [estimated to be around 86,000 people] will find it harder to spend their retirement in the sun, since – without a visa – stays will be limited to 90 days out of a 180-day period within the Schengen area.”

Tristan commented on the UK no longer being a member of Erasmus, the European student exchange scheme, and pointed out that studying in the UK will now be more expensive for French students. “A compulsory visa costs £350, and the benefits of the European Health Card will no longer apply,” he says.

Tristan acknowledged that France has its own Euroscepticism, citing a recent Eurobarometer survey which showed that 57% of French people consider the EU to be “remote” and 65% “ineffective”, with 58% saying they do not trust it. Tristan said that the complexity of the EU’s inner workings coupled with a perceived lack of solidarity between member states are sources of French frustration – although the same Eurobarometer survey nonetheless showed 53% remain “attached” to the idea of the EU.

Tristan told us that French media coverage tends to portray the British people as victims of a political protest vote. He cited a recent opinion poll for Le Figaro which showed 58% of French people believe Brexit will be bad for the UK (and 45% believe it will be bad for France too). As with the UK, opinion is split along generational lines: polls show younger people are more anti-Brexit than older ones.

From an ecommerce point of view: “Sales of goods are now entirely subject to VAT. Previously VAT was only charged on goods costing more than  £15 (€22). Consequently, British exporters selling lower priced items either have to increase their prices or absorb the VAT charges, potentially making French consumers less inclined to buy from British websites.”

Tristan also highlighted difficulties in the world of sport: “Transferring football players between the ages of 16 and 18 between European clubs isn’t possible post-Brexit, as it previously had been. This means British football clubs can’t scout for talent in France amongst this age range.”

The European Banking Authority – an EU agency – was previously based in London. Post-Brexit, Paris successfully bid to host it instead, hoping to replicate a cluster of ex-London firms around it. Since the referendum, President Macron has tried hard to restore Paris’ pre-First World War position as the banking capital of Europe – but as yet, there hasn’t been a significant exodus of firms from London to Paris.

A 2017 French Senate report dedicated to Brexit noted that Paris has a number of handicaps vis-à-vis London as a financial centre, including its complex and often changing regulatory environment plus the rigidity of its employment laws. In his evidence to the French Senate hearings, the President of Swiss bank UBS – with about 6,000 London employees and 300 Paris employees – said that making a staff member redundant “takes 3 days in London, 3 months in Switzerland and 3 years in Paris.” In addition, about 20% of French tax legislation changes each year.

 

Germany

European Parliament

European Parliament

Tobias is a LIME who lives near Frankfurt. He told us, “The majority of Germans are supportive of the EU and were therefore surprised by the UK’s decision to leave. The lengthy negotiations became wearisome to the public, and there was relief that by December 2020, there was finally some clarity, enabling all sides to move on.

“However, for most Germans, the day-to-day impact of Brexit has been negligible, and as a result, it hasn’t really changed perceptions of the UK in a significant way. Before the referendum and in the immediate aftermath, the topic was covered by German media, but in the years since, it tended to feature only when there was a significant development, or when elections were being held. The satirical media had fun with the idea that the British couldn’t make up their minds and appeared to be dithering.

“From a German business perspective, Brexit is unpopular since it brings uncertainty and additional admin. Some of the business challenges include customs declarations and controls, logistical problems in supply chains, and potential legal or regulatory changes which make forward planning more difficult.”

About 142,000 Germans live in the UK, while 107,000 British people live in Germany. Germany is the second largest export market for the UK (after the US) whilst the UK remains the fifth largest export market for Germany. German exports to the UK have steadily declined since 2016, and the Kiel-based Institute for World Economy assumes that over the long term, German exports to the UK will be 10% lower than they would have been without Brexit.

Tobias pointed us to a German business survey in February 2021, whose key findings were:

  • Business relations with EU countries were seen as more positive than with the UK.
  • Business expectations were low: 57% of companies surveyed expected their business relations with the UK to worsen, while only 7% expected an improvement.
  • Businesses with branches or operations in the UK want to hold on to them for the most part. Only 15% of companies expressed a desire to relocate.

Germany is a famously privacy-conscious country, whose citizens are highly protective of their data. Tobias said that at present, there are no concerns amongst German companies about data stored in the UK since the EU’s GDPR still applies post-Brexit. However, the UK may decide to move away from GDPR in the future, which could affect data security perceptions in Germany.

Tobias continued, “When ordering online from UK sellers, custom controls may affect delivery times. There may also be custom duties for some goods but so far, UK companies have been covering them so German customers haven’t really noticed price increases.”

 

Italy

To find out about Italian perceptions, we spoke to Elena, our LIME who lives in Milan. She highlighted the close ties between Italy and the UK, citing a 2019 survey which showed that six out of 10 Italians have been to the UK at least once and 93% of them would return. Estimates vary but it’s believed that about 700,000 Italians live in the UK, with London the fifth largest Italian city by population. Conversely, about 70,000 Britons have made Italy their home. The year before Covid-19, the UK welcomed nearly 2 million Italian tourists, whilst about 4 million Brits visited Italy. One city in Vento – Schio – pretends to be British one day a year.

Elena said, “Traditionally, the prevailing Italian perception of the UK is of an open, dynamic society with plenty of opportunities for work, study and business. On the whole, Brexit hasn’t really damaged this overall perception, although no longer being a member of the EU will probably reduce the flow of Italians across the Channel, given the complications of living in a non-EU state.

“The latest data shows a decline in Italian-UK trade. Some of this will have been caused by the pandemic, but some of it will be related to the UK no longer being a member of the Single Market, with the additional barriers and delays to trade that entails.”

Elena had bad news for fans of the Mediterranean diet, pointing us to this survey which showed declines in Italian food exports to the UK in the first half of 2021, including:

  • Pasta: -27%
  • Olive oil: -13%
  • Tomato sauce: -14%
  • Cheese: -6%
  • Wines and sparkling wines: -2%

The increased admin caused by Brexit customs procedures, combined with worldwide delays outside ports following the pandemic, have slowed trade. Elena points out that delays are especially bad for perishable products – i.e. food. She said that many Italian food exporters tend to be small producers, who especially feel the weight of extra costs.

Elena noted that British universities have been a big pull for Italians – both as students and members of teaching staff – with an estimated 16,000 Italians enrolling each year at UK institutions. From 2021, those who enroll will pay the same fees as other non-EU citizens which, depending on the university, could reach over €30,000 per year. Elena says, “It’s not difficult to imagine that Italian enrolments will decrease as a result.”

Like Tristan in France, Elena commented on the UK’s decision to withdraw from Erasmus, which she said will reduce European student numbers. The British government’s rationale for withdrawing from the scheme was that it didn’t represent value for money for UK taxpayers, being used far more for European students to attend British universities than vice versa. The government has now set up its own equivalent scheme with an international emphasis beyond Europe, named after Alan Turing.

In 2019, Britain was Italy’s fifth most important trade partner, behind Germany, France, the USA and Switzerland, whereas Italy ranked as Britain’s tenth most important trade partner. Britons make good use of Italian food, Prosecco, design, fashion brands, cars and pharmaceutical products. In turn, Italians import cars and special vehicles, chemical products, computers and cyber devices made in Britain.

 

United States

Brexit has been less of an issue across the pond. Eric, our LIME based in Chicago, cited a YouGov poll published in December 2020 which showed one third of Americans said they had heard “nothing at all” about the UK leaving the EU recently. Party affiliation plays a part: the same survey showed 41% of Republicans claimed to have heard nothing, compared to 29% of Democrats. Republicans tend to think Brexit is good for both the UK and the US, whilst Democrats are more likely to think it is bad. This is not surprising given that former President Trump was in favour of Brexit.

A selling point for Brexit was the ability of the UK to strike its own trade deals independently of the EU, and since leaving, over 70 deals have been made. Many of these simply replicate the trade arrangements in place during EU membership, but not all of them – the deals with Australia and Japan being amongst those which are new. A UK-US trade deal would be the biggest of all, but Eric pointed to numerous media reports showing its unlikelihood in the near or even medium future. On the other hand, even without a trade deal, UK-US trade relations are strong:

  • £1 of every £6 of British trade is with the US, which makes the US the UK’s biggest trading partner
  • Each country is the other’s largest foreign investor
  • UK firms employ over 1.27 million US workers, and US firms employ 1.4 million UK workers
  • The bilateral investment relationship is the largest in the world

President Biden – whose last ancestor actually to be born in Ireland was his great-great-grandfather, in 1832 – is famously attached to his Irish identity. This means that the fate of the much-discussed Northern Ireland Protocol will help to shape the bilateral relationship.

Eric cited the same disruption to supply chains and customs that our other LIMEs highlighted. He also said that certain aspects of Brexit may give US businesses an advantage to the detriment of the UK, such as US manufacturers potentially attracting custom from EU-based companies that previously sourced goods or materials from the UK, or US banks which have acquired ‘passporting rights’ to operate in both the EU and UK being able to peel off clients from UK firms which don’t have EU passporting or physical offices in the EU.

 

Poland

In 2004, the EU welcomed 10 new member states, mostly from Central and Eastern Europe, of which Poland was the largest. The UK was one of only three EU countries (alongside Sweden and Ireland) to open its labour market to the new entrants immediately. The UK government at the time forecast that between 5,000 and 13,000 people from the new member states would emigrate to Britain per year. This estimate proved to be incorrect by a factor of 10, as the actual figure was greater than 130,000 people on average per year between 2004 and 2016. By the time of the referendum, about 1 million Poles lived in the UK, although the figure is believed to be about 815,000 now.

Karo, who originates from Lublin in Poland, told us that in general, Poles are in favour of the EU and therefore were not supportive of Brexit. She said that since Brexit, perceptions of the UK have changed, with Poles seeing more opportunity in Poland now, especially with remote working becoming more accepted.

However, Karo said Brexit doesn’t affect the day-to-day life of an average Pole. She cited an opinion poll which showed that only 1% of Poles considered Brexit to be a major event in 2020. Other issues – most obviously, the pandemic but also Poland’s own political affairs – are seen as more relevant and important.

Polish media coverage of Brexit has tended to focus on the opinions of Poles living in the UK, rather than Poles living in Poland. The media has generally been negative, focusing on perceived issues the UK now faces such as supply chain difficulties and the energy crisis. Seeing how the Brexit negotiations played out raised concerns about the desirability of Polexit.

 

Looking to the future

There’s no doubt that Brexit has been a polarising issue, but the UK is hardly unique in having experienced political turmoil in recent years. Whilst some countries have perceived Brexit negatively, for others, it has painted the UK in a more positive light – as a strong and independent country. In general, British people over-estimate the extent to which other countries think or care about Brexit. In 2019, the EU represented 43% of UK exports. For UK businesses, the challenge now is to grow the 57% of exports to outside the EU, capitalising on international post-Brexit opportunities in the years ahead.

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Oban’s network of Local In-Market Experts – over 450 people in over 80 countries – provide on-the-ground insights which help our clients understand their target markets. To find out how they can help your business, please get in touch.


Oban International is the digital marketing agency specialising in international expansion. Our LIME (Local In-Market Expert) Network provides up to date cultural input and insights from over 80 markets around the world, helping clients realise the best marketing opportunities and avoid the costliest mistakes.