Brexit Global insights

To adequately comprehend the macroeconomic implications of the decisions, the Norwegian, bilateral trade negotiations, as well as the ‘hard’ Brexit, are evaluated to determine the most viable alternative for the UK that will benefit the automotive sector. The benefits associated with Brexit necessitate the endearing options that governments and companies must rush to reap. The involvement of the government in establishing viable legal and political goodwill, prevailing economic trends as well as the technological breaks inherent in the UK pose both viabilities for business establishments as well as a threat to specific automotive operations. These issues illuminate the impact of Brexit on businesses at a time when the competition has perceptibly been the concern of many organizations in the global environment.

The paper is conceptualized on macroeconomic issues prevalent in the UK. The demand for automotive parts produced in the UK has been rising with the 2017 index as high as 6. 9%, which is the highest ever, with a greater percentage serviced to the external market within the EU and yonder (SSMT, 2018). While there have been no tax tariffs for the trade volume between the European Automobile Manufacturer’s Association (ACEA), the future impacts will entirely depend on the ramifications of the specific trade model that the government pursues when they actuate Brexit. Even if the economic activity between UK and EU continuous, there is a likelihood that future decisions are the crucial determinant in the growth of the industry. The estimates for the automotive industry is prospective with higher export incomes associated with UK products.

Contextually, the operational environment for Ford Motors poses success if the talks will result in either joining European Economic Area or operating under bilateral agreements. However, the involvement of World Trade Organization would be an expensive undertaking for not only the automotive sector but also the entire economy. Historically Ford Motors has led in the production of engines with its output constituting 56. 6% of the total production of engines produced in the UK in 2016. Other competitors in the industry include the Nissan, BMW, Toyota, etc. Still, the option excludes the UK from future policy making which offers viable conditions for the company’s long-term operations. The implications on the industry are likely to aggravate should the UK adopt the negotiations through the World Trade Organization (WTO).

The laws of WTO will apply in harmonizing trade deals between countries. Traditionally, the 3% tariffs imposed on automotive parts and the 10% on vehicles which make business operations more expensive for the automotive giant (McBride, 2016). The rise in tariffs has negative implications for business operations. Critical is the strategic decisions pursued by other industry operators like Nissan which has cautioned its operation from any government decision (Bailey, David, and De Propris, 2017). Nissan has guaranteed its life through a government grant, which means it will at least experience the effects of the Brexit. Critically, the Brexit has a varied implication with some arguing “their business will start to feel the positive effects of leaving EU” while others contended that “it will remain a negative impact” (Davies, Ronald.