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“Hessen as an ideal bridgehead into the EU”: A Study on the impact of Brexit

Hessen is intent on maintaining its close economic ties with the United Kingdom in spite of that country’s decision to leave the European Union. “Hessen wants to build bridges,” stated Minister of Economic Affairs Tarek Al-Wazir on Wednesday, April 19, 2017 at a joint event organized by the Ministry of Economic Affairs and the Frankfurt am Main Chamber of Industry and Commerce. “We were of course hoping that Brexit would never become a reality, but we nevertheless remain committed to supporting British, Hessian, and international companies in seizing this opportunity to forge new partnerships and capitalize on investments.”

“The United Kingdom is currently the third most important sales market for Hessen based companies and it will undoubtedly continue to be important in the future. It is therefore even more essential to create a high degree of transparency as quickly as possible with regard to the nature of future economic relations with the United Kingdom,” explained Prof. Dr. Mathias Müller, President of the Frankfurt Chamber of Industry and Commerce.

A study released by Hessen Agentur on Wednesday showed that the United Kingdom is Hessen’s third most important export market. British companies also finished third among all countries with regard to the highest volume of foreign direct investment in Hessen. More than 350 British companies operating in the real economy maintain permanent establishments in Hessen.

“Although the United Kingdom will not be part of the European Union in the future, Hessen will remain a key location for the island nation,” noted Al-Wazir. “International companies that have conducted their European operations in the United Kingdom to date have already begun seeking new business locations. In light of its central location, economic prowess, highly qualified workforce, and top notch transportation infrastructure, Hessen is ideally equipped to serve as a bridgehead into the European single market. And we’re not waiting for someone to come knocking on our door. Instead, we’ve launched a proactive marketing campaign that will attract companies to Hessen.”

Al-Wazir cited as examples of this proactive approach the delegation visits to New York, Tokyo, and Seoul, the creation of a joint Brexit working group with the regional economic development agencies, and the holding of information events for Hessen based companies. Additional delegation trips to London, Hong Kong, and Singapore are set to take place this year. “A large number of Asian companies are also seeking a safe haven in the EU following the Brexit referendum and we intend to make them an attractive offer,” emphasized Dr. Rainer Waldschmidt, Managing Director at HA Hessen Agentur GmbH and at Hessen Trade & Invest GmbH (responsible for marketing initiatives promoting Hessen), in a speech given in Frankfurt. The fourth installment of the Hessian Foreign Trade Day, which is organized by the Frankfurt Chamber of Industry and Commerce and scheduled for June 20, will also focus on the issue of Brexit. “We have joined together with our partners to pursue objectives that Hessen based companies rightfully expect their state government to pursue, namely disseminating information, providing advisory services, and carrying out vigorous marketing initiatives promoting Hessen as a business location.”

Approximately 4,100 Hessen based companies were surveyed in the Hessen Meets Brexit study. Around 60% of the respondents see a high likelihood of Hessen even further intensifying its role as a bridgehead into the EU for foreign companies, while nearly all of them expect Frankfurt as a financial center to benefit from this. However, nearly half of the respondents expressed at least some degree of concern regarding their own business ties to the United Kingdom particularly in light of looming trade barriers and restrictions on the free movement of workers across national borders. “The study shows that companies do in fact anticipate future difficulties concerning trade with the United Kingdom and that these difficulties are expected to have an adverse impact on their export and import operations. However, the situation certainly has not given rise to outright panic,” assured Anja Gauler, Head of the Economic Research and Regional Development department at Hessen Agentur.

Additional information concerning the study can be found here.

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