Mind the Gap! LOW launches fourteen-point plan to help UK business in the EU
Brussels, 27 October 2021
The newly published ‘Mind the Gap’ report from LOW Associates highlights the lessons UK businesses and other non-governmental organisations need to learn from the US experience as a third country to the EU. LOW’s report identifies the challenges and presents a 14-point plan to ‘Bridge the Gap’.
The report was discussed today at an online ‘Mind the Gap’ debate organised by LOW Associates, the Brussels-based strategic communications consultancy. It was chaired by former UK cabinet minister Lord Andrew Lansley and attended by key figures in UK business, EU stakeholders, and trade experts.
The LOW report outlines fourteen practical methods that UK business and organisations should employ now to a) engage more directly with EU policy-making; b) build networks; and c) secure long-term relationships with the UK’s closest and most economically significant partners.
Because the UK’s relationship with the EU is now that of a third country, albeit with a TCA, the gap between UK and EU standards and regulation is likely to grow. To the costs of not being in the customs union will be added the risks and costs of regulatory divergence over time.
Sally Low, founder and CEO of LOW Associates said that “despite the lack of trust between UK and EU negotiators in the political and institutional sphere, we are certain that there is a sustained level of interest from the EU in the engagement of UK businesses, NGOs, and Universities in Europe. Our ‘Mind the Gap’ analysis defines the problem. But, as a consultancy, we are primarily focused on ‘Bridging the Gap’ because we want to help provide some of the solutions to this vital relationship for UK and EU businesses”.
The LOW report includes interviews with a range of experts in the Pharmaceuticals, Food & Drink, and Creative industries, as well as Brussels-based leaders of US business groups. They are all clear that it is in the interests of both UK and European businesses to influence policymakers in both jurisdictions to limit the extent of the gap, and to recognise the economic benefits of substantial alignment.
Speaking during the panel debate, Susan Danger, the head of AmCham EU, referred to the vast experience the US has in engaging with the EU as a third country. Ms. Danger said that “now the UK is a third country to the EU, UK businesses must demonstrate that they are committed to building trusting and profound relationships with the EU institutions”. In Ms. Danger’s view “US entities have been able to do this through demonstrating a clear commitment to the overall goals of the EU and because they bring invaluable sectoral expertise, knowledge and data to the EU institutions who are regulating their sectors and industries”.
The UK’s Food & Drinks sector offers a prime example of the challenges facing the UK now that it is a third country to the EU. According to the UK’s Food and Drink Federation (FDF), prior to COVID-19 and Brexit, total UK exports of food and drink were £23.6bn, of which some 60% (€16.3bn) went to EU member states (FDF, 2020). By September 2021, reporting on trade in the first half of 2021, FDF noted that exports to the EU were down by more than a quarter compared to H1 2019. This included falls of nearly 50 percent to Germany, Spain and Italy.
Mella Frewen, Director General of Food Drink Europe, said “the important thing is that UK businesses understand where EU legislation is going; and vice versa; what the new rules, standards, and norms will be, which is particularly important as, the more divergence we see in standards and norms, the more difficult this trade relationship is going to be”.
The Pharmaceuticals sector is of great importance to future economic performance in both the UK and EU. The UK industry is its third largest sector; it exports over €11bn a year to the EU, and the supply chains can be substantially enmeshed between European countries. For the UK’s big players in this sector, the ‘gap’ is less of a threat. However, much of the dynamics of the pharmaceutical industry depends on SMEs, particularly those start-ups focused on one key innovation. LOW’s ‘Mind the Gap’ report makes clear that these SMEs need their representative organisations straddling the ‘gap’, to create the bridges which will enable them to work across European markets.
Leslie Galloway, Chairman of the Ethical Medicines Industry Group, said that “cooperation must happen a level down from the official because the officials are not properly engaging. It must be trade bodies but also companies who are getting involved and working with each other: companies who work together and sell each other products, companies that represent each other in different countries”.
Speaking after the ‘Mind the Gap’ debate, Lord Andrew Lansley, Strategic Counsel to LOW Associates, said that “Our report sets out an action plan for UK businesses. They need to adapt to living as a ‘Third Country’. We at LOW will work with businesses and interests in the UK and EU to help to ‘Bridge the Gap’”.