Brazilian executive and entrepreneur Flavio Maluf recently gave an interview to Exame concerning the aftermath of the Brexit decision. In late June, British voters decided to end British membership in the European Union, an outcome that few expected. Flavio Maluf looked at the effects of Britain’s exit from the EU in terms of Britain’s, the EU’s, and Brazil’s economic future.
According to Maluf, Brexit may have a debilitating effect on the British economy. Although Britain was a net contributer to the European Union, the loss of access to the common market and the free flow of people and goods may mean a loss of investment in Britain. The British-EU trade relationship may suffer as well, as new tariff agreements will have to be negotiated where the Eurozone was a free-trade community. On the other hand, one advantage is that Britain will be able to pursue bilateral trade agreements that it could not have while in the EU.
In terms of the Brazilian economy, trade with Britain accounts for less than 2% of Brazilian exports, so the impact on the Brazilian economy will be minimal. However, Maluf notes that it may be possible for Brazil and Britain to reach some time of bilateral trade deal.
Maluf is also concerned that the overall effect on Europe will likely be extremely negative. Germany, France, and Britain were the economic powerhouses in the EU. With Brexit and France’s ailing economy, it will be up to Germany to try to provide economic leadership to the EU without Britain’s support.
Flavio Maluf is the CEO of Eucatex, a manufacturing company specializing producing eucalyptus wood materials for the building and furniture industries. In addition, he is CEO of Grandfood, which produces some of the most popular brands of pet food in Brazil. LinkedIn has Flavio’s full list of credentials.