We have all been familar with the scare stories and post Brexit disaster senarios. This article in the Telegraph on the other hand highlights the anxieties of the French business community:
French business is playing last-minute catch up over the prospect of a hard Brexit amid increasingly plaintive calls from government and trade bodies to act or lose out to European and global rivals. As many as 30,000 French companies export to the UK, and 3,300 have British-based operations, according to government figures.
“I’ve just got off the phone from Brussels office and the news is not good,” said Thierry Pouch, chief economist of the French Chambers of Agriculture. “The European Commission refuses any renegotiation of the Withdrawal Agreement, we have zero room for manoeuvre. The only hope for movement is from political pressure but Emmanuel Macron has already ruled it out,” he told the Telegraph.
Mr Pouch has reason for concern: French agribusiness, he said, had a €3bn trade surplus with the UK; a quarter of UK imports of wine and beverages are French, along with 23pc of its potatoes and a fifth of its dairy products.
“Given recent events, everyone anticipates a hard Brexit, and in that case there is a lack of preparedness due to the fact that we don’t know what customs duties the UK will apply as a WTO member,” he said. “There are indications that customs duties will be upwards of 30pc on dairy products, beef and sugar, for example. And on pork, poultry, fish and grain, between 10 and 30pc. But these are just estimations - we are sure of nothing.”
The strong euro and weak pound has already hit a slew of hit French exports, from champagne, wine and cheese to apples and potatoes.
The “nightmare scenario”, Mr Pouch said, was that major EU exporters to the UK, namely Ireland, Netherlands and Germany, would be effectively shut out of the UK market if duties rise, leading to a flooding of the EU market. “We could see a repeat of what happened during the 2014 Russian embargo. It led to a logjam of goods inside the EU with plummeting prices.”
The only solution would be to start looking at ramping up exports to third countries in Asia and the Middle East, he said. Some companies have already taken contingency measures. Maison Louis Latour, which exports 1.2 million bottles of Burgundy wine to Britain each year, is sending 300,000 to the UK in the coming weeks to avoid chaos on Brexit day for fear of a build-up at French ports.
Authorities have already estimated that there could be miles of traffic jams at Calais due to extra customs formalities in case of no deal, meaning perishable goods will be the priority. “We worry there will be too many containers heading to the UK,” Mr Pouch said.
In Brittany, some trawler owners say they have been approached by foreign investors offering to buy their boats, with or without crew, in case of no deal. "In the days following the last vote, we were all contacted," said Breton boat owners Stéphane Pochic and Jean Porcher.
They also fear an influx of cheap British fish should the pound fall further. Food and drink are not the only areas of concern. According to Euler Hermes, France could lose €3bn in exports this year in case of a hard Brexit, with the biggest losers the car sector, following by machinery and equipment, electronics and aeronautics.
Last week, the government urged French businesses working with British contractors or suppliers to actively search for alternatives. “Let’s not panic, but let’s prepare for different scenarios,” said the Europe minister, Nathalie Loiseau, who unveiled a 28-page booklet for companies with British ties, advising them to “keep calm and carry on”.
Companies reliant on UK business partners should explore other options outside Britain, while those with UK-based operations in specific EU-regulated sectors should consider moving to the continent, according to the guidelines. Agnès Pannier-Runacher, the economy and finance minister, warned: “There is absolutely no time left to lose for these companies. The countdown has well and truly started.”
Alban Maggiar, European affairs delegate at CPME, the French SME federation, urged small businesses to scrutinise their supply chains for UK-based suppliers, saying: “It is very difficult to know who is exporting directly or indirectly. Many SMEs don’t really know where their supply or customer begins and ends.”
He warned there was a dearth of specialists.
“When you have to reactivate an administrative burden for exporting to the UK that had disappeared for 45 years it is difficult, you need the proper expertise and very few people are trained for that in Europe thanks to the single market."
But he backed the EU negotiating stance. “Many say people, it would be unfair to be too nice to the UK whereas they have decided to be a third country. If you start to become too flexible to a country that has decided to leave the EU, many would ask what is the difference between being a member and not being one?”
Caught in the pre-Brexit scramble is Béal, the world’s top climbing and security rope manufacturer. Based in France, the company relies on EU certification from the London-based Swiss company, SGS. If hard Brexit strikes on March 29, it stands to lose €4m in rope stocks whose certification number will theoretically become null and void because no longer conducted within the EU.
“French bosses are insufficiently aware of the consequences of hard Brexit,” director-general Frédéric Béal told Libération. “Everyone must realise that it won’t be limited to traffic jams in Calais and extra customs duties.”
At the very least, the EU should give him extra time to sell his UK-certified stocks: “The solution isn’t economic but entirely political.”
This week French employers’ federation Medef sent a fact-finding delegation to London. While big business has already put in place contingency plans, an estimated two thirds of French firms, mostly small and medium-sized businesses, are not ready for a hasty Brexit, it said.
“We tell companies to get ready and they say OK, but for what and when? That’s the difficulty. Last year, we thought it was March 29 and with a transition period," said Medef. "With 50 days to go, we’re no longer sure of the date, whether there will be a transition. We are working on the assumption that there will but we need answers.”
Thierry Drilhon, head of the Franco-British chamber of commerce and industry, said: “If I had to resume the state of mind of business leaders in France, it is: ‘Yes to a political and democratic Brexit and yes to an economic Remain.’"
His chamber is organising a raft of breakfast Brexit meetings offering advice on everything from logistics to the legal impact on contracts and intellectual property.
“Brexit could be chance to reinvent the way we do business between the EU and the UK, which remains and will remain a very trustworthy and loyal customer of France."
"But there this uncertainty mustn’t last because it is a lose-lose situation and is bad for business. The UK in its heart must decide what it wants to do. When it has a clear political position, the most intelligent business solutions will be found.”
Read the first part of our European View of Brexit series: A car crash waiting to happen? What German business really thinks about the Brexit negotiations