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With
a vote just around the corner, the issue of a possible Brexit always exits on
everyone’s minds. Whether anyone agree or against it, the UK leaving the EU
would potentially have a huge impact on the lives of the British. Moreover,
what about those countries, such as Germany and France, who currently enjoys a
trade relationship with Britain? Brexit impacts negatively on the largest
economies in the European Union like Germany, so what would a Brexit mean for
the France–the UK’s closest neighbor?

According
to Tuoi Tre Newspaper 2016, France
becomes the country with the 5th largest economy in the world at
rate of exchange in the market after the US, Japan, Germany, China. This also
means France’s economy reaches the second position in the European Union after
Germany. According to Trading economics,
exports from France increased by 1.4% from the previous month to 39.8 billion
EUR in August 2017, driven by higher sales of: Works of arts, technical
documentation, publishing products (21.4%); aerospace industry (7.1%);
agriculture products (5.8%); industrial and agriculture machinery (2.2%);
automotive products (1.7%); agriculture-food products (1.7%); rubber products,
plastics, various minerals (1.1%); computers, electronics and optical (1%), and
metallurgical and metal products (0.2%). Among major trading partners, exports
increased to Asia (12%), America (3.3%); and the EU (0.2%). Exports in France
averaged 18725.52 EUR Million from 1970 until 2017, reaching an all time high
of 40364 EUR Million in December of 2016 and a record low of 1165.60 EUR Million
in May of 1970.France
exports mainly aircraft (13% of total exports), food (10%), chemical excluding
perfumes (9%), industrial and agricultural machinery (8%), computers,
electronics (7%), metal products (7%), pharmaceuticals (6%), motor-vehicles
(6%), textiles, clothing (5%) and electrical equipment (4%). Main export
partners are: Germany (16%), the US, Spain, Italy, the UK and Belgium (7%
each), China and the Netherlands (4% each). This figure was last updated on
October of 2017.

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Joining
to European Union is one of the most important stages of France as well as the
UK. Because of the free movement people and goods between member countries (no
paperwork and tax), this creates such an effective, simple and profitable relationship
between member states in EU. It means if Brexit happened, tax and paperwork did
not valid and transportation fee would increase to 30%.In the article called
“How a Brexit might affect trade between the UK and France” 2016, Keegan
Spindler said that Brexit led to the rise of prices so this would be especially
damaging for small and medium sized business, as it would reduce their profit
margins and likely force them, like French businesses sending to the UK, to
find other markets to send to. For example, in German Amazon Market Place, there
is more than 20% of the sellers are based in England because this is profitable
market. If the UK leaves, it means France has far fewer vendors from which to
purchase goods. In addition, France had sent over 41 billion through this
channel, majority French have to suffer the highest tax if they want to export
to England. Therefore, it would possible for France to find new markets in the
future. Economic expert named Ludovic Subran 2016 supposed that purchasing
power parity of France would decline sharply in the second quarter, especially
commodities and consumer goods because world stock market fell significantly
which led the costs of all goods would reach higher more than 30%.England is an
important partner of France in many branches industry such as automobile
productions, chemicals, food, equipments as well as services such as
management, traffic, sewage. According to Nhan
Dan Newspaper, the food companies, chemical products and automobile
manufacturing industry would be influenced by the Brexit firstly. In fact, in
2015, the British bought $4.1 billion for chemical products and $5.5 billion
for food. When Brexit happened, the pound depreciated, the purchasing power
would be affected negatively. The Britain would limit to buy imported goods
from France because the price would rise drastically which was result of the
rise tax. In the article called “Brexit s? ?nh h??ng th? nào ??n tình hình kinh
t? Pháp?” 2016 claimed that besides agriculture, the industry suffered the lost
was machinery and component manufacturing (agriculture equipment, electronics,
nuclear power) expected to decrease $480 million, while chemical productions
reduced to $520 million. Furthermore, Brexit slowed progress of many projects
between England and France. It also means many corporations will be postponing
their investment for projects which lost a lot of profits. In that time, there
are 2 main arguments for this problem. On the one hand, some investors supposed
that this is the golden opportunity to buy British company with cheap price. On
the other hand, some others expressed fear and dodge this chance because they
claimed that the British firms were not attractive.

In
general, France economics as well as trade between two countries was influenced
by Brexit negatively. In term of large or small companies, Brexit is considered
as the serious storm which lost a lot of profits. It would possible when a
third merchant currently selling in the UK will find to other places which has
no additional costs in excess of 160 thousand pounds of tax and transportation
fee. Specifically, the significant result from Brexit is customers will be
likely to suffer the highest cost with little choices.

While the country is able to expand
trade unchecked around the world when being out of the EU, it can also be
difficult to match the EU’s negotiating power. With more than 50 partners
worldwide, the Alliance has freer trade agreements than any other country. In
addition to current trade agreements, the EU is negotiating agreements with the
United States, Canada, Japan, India, Australia, New Zealand and other countries

With the scale of trade dependence between the UK and European Union
members, and the advantages of maintaining a close trade arrangement, there are
very few advantages for both sides in commercial relations after the Brexit.
Indeed, given that the European Union is currently negotiating free trade
agreements with less important countries from a commercial standpoint, it would
be very odd if it did not reach an agreement with the United Kingdom.
Similarly, there is no reason to think that the UK will not be able to
negotiate new trade agreements with these countries which now have free trade
agreements through the European Union.

 

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