LISBON — Portuguese exports to the United Kingdom could fall by over a quarter because of Brexit, wiping up to 1 percentage point off the countrys economy, according to a study from the Confederation of Portuguese Business (CIP).
Speaking at the launch of the report, Foreign Minister Augusto Santos Silva assured business leaders the government is working to minimize the Brexit impact. He expressed hope a deal with the U.K. could be struck by the time European Union leaders meet for a crucial mid-December summit.
“Our top priority is to do all that we can to make sure that the United Kingdoms exit from the European Union is an agreed and orderly exit,” he said. “Were not going to wait for a perfect agreement. No agreement is the worst option, any agreement is better than that.”
The report will be welcomed by many Brexit-supporters in the U.K. who have long argued that Britain has significant leverage in negotiations with the EU because it is not in either sides interest for the U.K. to crash out with no deal. It comes as negotiations enter their final stages, with time running out to rectify any deal agreed between the U.K. and the rest of the bloc before Britain is scheduled to leave in March 2019.
The U.K. is Portugals biggest market for service exports and fourth largest for goods. Total exports reached €8.3 billion in 2016, according to figures in the business association study. It estimates exports will fall by between 15 and 26 percent in the years after Brexit, cutting between 0.5 and 1 percent of gross domestic product.
“This is not about them leaving our house; its about finding a new house where we can live together” — Augusto Santos Silva, Portuguese foreign minister
“Its going to have negative economic consequences for everybody,” said António Saraiva, president of the confederation, which represents over 114,000 Portuguese businesses.
The CIP report recommends government and industry step up efforts to promote Portugal in the British market, particularly for sectors most at risk such as tourism, electronics and the auto industry.
Business leaders expressed cautious optimism Brexit could prove positive for some Portuguese companies if it limits access to EU markets for British competitors.
“Brexit will generate opportunities that could be seized by Portuguese companies given that, with Brexit, the United Kingdom will have more difficulties importing and exporting to and from other European Union countries,” said CIP in a statement.
Santos Silva said any agreement on Brexit terms should include guidelines for a longer-term relationship between the U.K. and the EU that minimizes trade barriers and maintains the closest possible political ties.
“Within what the United Kingdom wants, the best solution would be a free-trade agreement like that with Canada, but further deepened,” the minister said, adding that the future relationship should include strong political, diplomatic, defense, security and justice cooperation.
“If Brexit can be compared to a divorce, its a very special divorce because were getting divorced now so we can immediately get into a new relationship,” Santos Silva concluded. “This is not about them leaving our house; its about finding a new house where we can live together.”