Looking back over the past 2 years, it’s clear that Gibraltar have moved from a post-referendum sense of dread to a more positive outlook.
News that Gibraltar, the UK and the EU are close to agreeing the terms of a protocol over Gibraltar’s position post-Brexit will be widely welcomed by business – and not only because it brings the end of a period of intense uncertainty over Gibraltar’s role and relevance in a new world order closer.
Looking back over the past 2 years or so, it’s clear that in Gibraltar we have moved from a post-referendum sense of dread, of doom and gloom to a place where the outlook is much more positive. This is in no small measure due to the fact that Brexit has forced clarity on a number of issues. It has also brought reassurances from the UK that Gibraltar – and its interests – are very much on the agenda.
Specific concerns for local businesses such as the potential loss of passporting rights into the EU under a hard Brexit remain but their economic impact on Gibraltar appears limited and may eventually be more than mitigated by the possible creation by the UK of a special status for Gibraltar which would allow EU companies to passport into the UK assuming the UK’s future trade agreement requires EU companies to find such a solution. And the threat of transitional arrangements for Gibraltar being vetoed now appears to have gone. While the details of the tripartite talks have not yet been revealed it seems the three players involved – Gibraltar, EU and the UK – are seeking to find solutions that will work on all sides of the border.
It also looks as if those negotiations will bring separate memorandums of agreement on key issues including tax transparency, greater cross-border cooperation, tobacco and the environment. Again, greater clarity around all these issues is good news for business.
Of course, some uncertainty will remain until the small print of any agreement is revealed in its entirety. As we are often reminded with Brexit, nothing is agreed until everything is agreed.
So, while for many of the 96% of Gibraltarians who voted Remain, news that the protocol is approaching settlement still isn’t the ideal, the sense of optimism that has predominated in Gibraltar for many months can now be substantiated. So much so, that even in the worse-case scenario - a no-deal Brexit - there is a growing belief that the effort that has been invested in the intense negotiating process could see Gibraltar come out stronger. That this small corner of Europe will gain a clearer understanding of its relationships with the UK and the EU, and new opportunities for growth. One such opportunity was announced in the Gibraltar Parliament last week – with the Chief Minister’s announcement that Gibraltar may seek a differentiated position to the UK, for example by joining the Customs Union; and depending on the detail, that could bring further economic prosperity both to Gibraltar and the neighbouring region.
© 2019 KPMG Limited, a Gibraltar Limited Liability Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
KPMG International Cooperative (“KPMG International”) is a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.