Asymmetric Dialogue

Brexit leaves French defense companies with big investment in the UK uneasy




The prospect of Britain leaving the European Union, dubbed Brexit, stirs deep disquiet among French defense companies, which are heavily invested across the English Channel, said Eric Trappier, chairman of Gifas, an aerospace trade association.
“We are worried by Brexit, particularly French companies, because we have developed strongly with British counterparts and invested heavily in Great Britain,” he told a news conference April 12. Trappier said he was speaking on behalf of Gifas; Cidef, the body which represents French aerospace, land and naval equipment manufacturers; and AeroSpace and Defense Industries Association of Europe (ASD), which represents European firms.
Those European firms have a significant presence in the U.K. — notably MBDA, Thales and Airbus — and there is uncertainty over what the trade requirements will be once Britain has left the EU, he said.
Questions loom such as whether British equipment will need to be certified by the European Aviation Safety Agency, customs clearance, and French staff working in the U.K. Also, there is doubt whether British companies will be eligible to apply for financing from the European Defense Fund being set up to boost arms research, he said.
“This a great worry for everyone,” he said. Companies wish to know promptly so they can prepare for the trade terms after Brexit.
There should be clarity over defense cooperation between Britain and the EU, with talk of a defense treaty with the U.K. after the exit, he said.
The U.K. is the second-largest trading partner for France, after Germany. The French and British supply chains are also intertwined — with the wings of the Airbus airliners built in the U.K. for example. Some 40 subsidiaries of Gifas members employ 35,000 staff in the U.K., which is the second-largest aerospace industry in Europe. There is at stake the flow of goods, investment and staff movement across the channel.
Thales sees little direct harm from Brexit as there is little trade flow between its British subsidiary and the rest of Europe, the company’s chief financial officer has said. But there is risk of a slowdown in domestic trade after leaving the EU, leading to a weaker budget and less defense spending, Pascal Bouchiat has said.
Trappier is president of ASD.
defensenews.com