Deal or no-deal?: ARTA surveys logistics providers for insights into how they are preparing (or not) for Brexit

Brexit 101

Since the UK voted to Leave the European Union in the 2016 referendum, the Government has continually stuttered in its attempts to determine the terms of the UK’s departure and deliver on Brexit. The original deadline of March 29th was delayed after Teresa May’s Withdrawal Agreement was soundly rejected by the Commons, ultimately costing her the Premiership. Since then, under the leadership of Boris Johnson, the debate has shifted towards Johnson’s conviction to leave the EU on October 31st “do or die”, regardless if there is a deal in place.

Why no deal could be a big deal

The European Union is an economic and political union of 28 member countries that allows for free trade and free movement of people to live and work in whichever country they choose. If the UK does leave, it will be the first country to do so since the EU was formed, so there isn’t a blueprint for a successful departure and no historic example of the impact it will have on global trade. 

Moreover, a no deal Brexit would mean the UK will leave the EU customs union and single market overnight. For the fine art and antiques market, the customs union ensures the free movement of goods and people between Member States, so any no-deal exit could severely impact the industry’s labour market and cause delays at the border.

Survey results: Brexit’s impact on global trade

Whether or not the UK leaves with or without a deal is incredibly important for any business involved in global trade, as there are many scenarios for how Brexit could affect how these businesses operate.  With the prospect of an impending no deal Brexit, we asked UK and European fine art logistics providers what they think may happen, and what they have done to prepare.

How do you see the UK leaving the EU?

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Only 45% of respondents believe the UK will leave with a deal. 22% see a no-deal departure, while 18% are convinced the UK won’t actually leave. What these results show is that despite Boris Johnson’s rhetoric of finding a deal before Oct. 31st, the reality is that no one either trusts in the Government to deliver on this promise or knows which way the dice will fall. The knock on effects are further uncertainty and delayed decision making for the industry.

What impact do you think the UK’s proposed exit from the EU will have on the art/antiques/auction market?

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With 77% of respondents determining that Brexit will have a negative impact on the art and collectibles market, it will be interesting to see if global trade of these commodities drops in line with expectations and auction houses begin to see weaker sales post-Brexit. While some respondents did not feel Brexit would have any impact at all, no respondent believed that Brexit would have a positive impact. 

What impact do you think the UK’s proposed exit from the EU will have on the art/antiques logistics industry?

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Mirroring the sentiment felt about the global art market, 77% of respondents believe Brexit will have a negative impact on logistics providers supporting this industry. This is owing to the UK potentially losing its customs union status and the free movement of goods being hindered; leading collectors & galleries to ship their goods directly into the EU and not via London. In addition, the free movement of people has given shippers valuable access to labour from continental Europe which could be halted post-Brexit.

Do you see an opportunity to expand or grow your business as a result of the UK leaving the EU?

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Only 36% percent of respondents see an opportunity to grow their logistics business as a result of Brexit, perhaps from Johnson’s plans for Swiss-style Freeports and/or the autonomy to determine our own import tax for art & antiques (some argue that we should mirror the US and set import tax at 0% post Brexit). 41% definitively feel there will be no business opportunity from Brexit, while 20% are undecided. 

Have you taken any necessary steps to prepare for the UK's departure from the EU?

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The majority of respondents, 60%, are patiently waiting to see how things pan out. Given the array of outcomes for Brexit, it has proven difficult for logistics providers based in the UK or EU to plan, especially with minimal resources. The 22% of respondents who have started to prepare reported that they have done things such as checking on EORI numbers and researching fall back procedures on VAT. Others have started to simplify and reduce current customs times both in the UK and Europe in preparation.