“We’re really in uncharted territory with the breakup of the U.K. and the E.U.,” said Hal Shapiro, a trade attorney at Akin Gump and former lawyer at the Office of the U.S. Trade Representative. Akin Gump launched an internal Brexit task force last week and plans to publish a”Beyond Brexit” blog this week as a resource for corporate clients.
The U.K. has long been a leader among E.U. members in negotiating trade deals with the rest of the world, and its withdrawal from the body could affect the way Britain trades its products and services, Shapiro said. That means a variety of products such as cars, cheese and wine that now flow freely between the U.K. and the rest of the E.U. could become subject to duties and tariffs depending on how the U.K. structures its new trade agreements.
“Now that Britain has decided to leave the E.U., it’s going to have to decide how it wants to deal with the E.U.,” Shapiro said. “Does it want to have an open market, a closed market, protect certain sectors? These are all questions the U.K. will have to determine for itself.”
Much of the long-term fallout of Brexit will not be clear until the U.K. formally invokes what’s known as Article 50, the provision of the E.U. treaty that deals with member states withdrawing from the union. That would trigger a two-year deadline to negotiate the terms of the U.K.’s departure.
The uncertainty offers a chance for companies to shape how new regulations may be written on both sides of the pond, said Bruce Heiman, co-head of the policy group at K&L Gates, which set up a 24-hour hotline to take client calls and emails about Brexit.
Heiman likened Brexit to a divorce between the U.K. and E.U., for which the terms have yet to be written.
“Those hurt in a divorce are the children, the companies doing business in the U.K. and Europe,” he said. “The terms can be negotiated and influenced. Certainly we’re suggesting to our clients that they can play a role in determining their fate here.”
Companies will have to figure out their priorities and come up with a policy campaign, “which is likely to involve working with government officials in the U.K., throughout Europe, Brussels and Washington,” he said.
Heiman said he’s fielded about 10 calls from clients in the public policy group alone, and joined his partners in Washington, London, Brussels and Frankfurt on a joint call Monday with leaders of 100 major financial services firms.
“The hotline’s been hot,” he said.