With a hard-Brexit scenario, the competitive position of Dutch companies is hit harder than that of companies from other European countries. The Netherlands Environmental Assessment Agency (PBL) announced this in a new study at the end of August.
In this study, the PBL looked at the (inter) national competitive position: which branches of industry in which regions in Europe are strengthened by Brexit and which are weakened? And how sensitive is this effect to the specific agreements with the United Kingdom and therefore to the details of an exit agreement?
In the case of a hard-Brexit scenario, the UK’s withdrawal from the EU will have a greater impact on the competitive position of Dutch companies than companies in other European countries. The details of an exit treaty, or the details of agreements on the future economic relationship with the UK after a no-deal, are more decisive for the Netherlands than for the UK and many other EU countries.
The difference is partly due to the fact that Dutch companies operate more internationally than other countries. The effect of import tariffs and other trade barriers is therefore greater in the Netherlands than elsewhere.
The initial impact will be greater for the UK than for the rest of Europe. The PBL, for example, expects regional inequality in the country to increase, particularly in the pro-Brexit regions.
In Europe it is striking that the effects of the Brexit in Germany and the Czech Republic are relatively insensitive to the details of the exit agreement. This is because the economies in these countries are more intertwined with the British economy and there will be effects regardless of the details.
The consequences for the Netherlands will mainly be felt in sectors such as agriculture, chemicals, trade and the food industry in the form of a cost increase. On the other hand, financial services, telecom and the travel industry will benefit from Brexit. The extend of these effects depends on the amount of trade barriers, and therefore on the choice of a hard- or soft- Brexit scenario.
According to the researchers, it is important to map the consequences of the Brexit and the associated uncertainties. According to the PBL, this helps with the preparations that the Dutch government and the most sensitive industries and regions can make. This could also help in the follow-up negotiations on future economic relations with the United Kingdom.
Regardless of which deal is finally concluded: the initial impact will be greater for the UK than in Europe – regional inequality in the UK will increase, especially the pro-Brexit regions in the UK will be greatly reduced – and the impact will be stronger The Netherlands than in many other European countries. This is evident from the scientific publication “The Implications of Brexit for UK and EU Regional Competitiveness”, which the Netherlands Environmental Assessment Agency (PBL) has published in collaboration with national and international researchers as Tinbergen working paper 19-061 / VIII.
Source: this article has been translated from the Dutch version