In World Economy News 19/10/2016
The head of major miner BHP Billiton says what Britain needs is a “hard-headed Brexit”, which would maintain trade relations with the European Union and place the focus on minimising bureaucracy as much as on keeping tariffs low.
In the run-up to the June 23 referendum, when the British public voted to leave the European Union, BHP Chief Executive Andrew Mackenzie was among the company bosses who spoke out in favour of staying in, warning that Brexit could inflict a decade of damaging uncertainty on business.
On Monday, he told Reuters his concern was that the terms “hard” and “soft” Brexit, being used in the political debate, were sending the wrong message.
The term “hard” refers to a Brexit in which Britain, unable to secure a deal in which it would retain a high level of access to the EU single market while at the same time restricting immigration from the EU, would sever preferential trade terms with the world’s biggest trading bloc.
This would leave Britain facing tariffs when doing business with the European Union.
“One big risk is trade relations with our biggest partner. To call that ‘soft’ is crazy. Let’s be sensible, pragmatic. What people call ‘soft’, I call ‘hard-headed’,” he said, adding that he cared about limiting bureaucracy as much as ensuring low tariffs.
BHP and other miners, whose earnings are mostly in dollars and whose operations are primarily outside the EU, have been relatively unscathed by the June vote, although many of them have said any loss of economic confidence could damage them.
So far the shareprices of miners have risen since June as some investors treat the sector as a hedge against the fall in the value of sterling, triggered by concerns about economic weakness and uncertainty over Britain’s negotiations.
Source: Reuters (Reporting by Barbara Lewis; Editing by Richard Balmforth)
