The UK's exit from the EU has destabilized the markets, worrying for consequences on Made in Italy exports. Analysts agree that the decline in exports will be felt from 2017, when the first agreements between London and Brussels should be closed in view of the actual exit. In this context, the The United Kingdom represents the fourth largest market for Italy, for a share of 5,4% of total exports. At the same time, the country represents 2,9% of Italian imports, ranking in tenth place among the main commercial partners of the Bel Paese. In sectoral terms, the United Kingdom and Italy have cooperated very fruitfully in the fields of aerospace and defense research, two areas which could well be negatively affected by the breakdown of the common link. Negative impacts are also expected with regard to education and labor migration flows. At the moment there are approximately 600.000 Italian citizens working or studying in the United Kingdom, a number almost entirely supported by the guaranteed free movement of individuals between EU Member States.
Italian exports to the United Kingdom closed 2015 with a +7,4% compared to the previous year and closed the first quarter of 2016 with a +1,8% in trend terms. A trend which, according to SACE estimates, would have led to an average annual growth of 2017% in the three-year period 2019-5,5. With Brexit, however, the estimates undergo a distortion. In 2016, Made in Italy exports across the Channel will continue to grow, given the implementation times of the EU exit procedure and the positive data recorded in the first six months of the year. Here then is that during this year the Brexit effect will be limited to a lower growth of 1-2 percentage points than expected. The negative data will be recorded, however, in 2017, with a drop in exports that should fluctuate between 3% and 7%, i.e. between 600 million and 1,7 billion euros.
In terms of direct impact, the predictions of Intesa Sanpaolo indicate a short-term cost for Made in Italy of up to 3 billion euros in terms of lost or delayed exports, mainly due to the expected slowdown in the UK economy and the decline in the value of the pound, with the latter already in evidence. The most important long-term consequence is expected to come from the imposition of import duties (we are talking about a 5% tariff, along the lines of the commercial tax on non-EU products), translating into a substantial increase in the cost for consumers, a problem aggravated by the weakening of the national currency. All of this is expected to have a substantial effect on a wide variety of Italian export sectors, including food, wine, fashion, furniture and machinery with a combined value of around one billion euros. The impact will be all the heavier as the UK previously assumed safe-haven status for Italian exports, including during the post-2008 recession.
Secondo SACE the most affected sectors will be instrumental mechanics and means of transport, with declines between 10-18% and 10-16% respectively. Save, however, textiles and clothing (with an expected decline between 1% and 3%) and agri-food which, on the contrary, will continue to grow by up to 6%. According to analysts, this is explained by the fact that the first cuts due to Brexit will concern investments and not consumption. The uncertainty and the economic impact will discourage British entrepreneurs from investing in their businesses, and therefore also in production machinery, a sector in which Italy is one of the world leaders, and in commercial means of transport. Problem that, on the other hand, it wouldn't concern agri-food and fashion, sectors that produce consumer goods generally intended for a high-end market and, therefore, for social classes that will be less affected by the economic effects of the United Kingdom's exit from the EU. On the contrary, Promethea foresees reduced drops for sectors such as mechanics, pharmaceuticals and means of transport due to the high degree of specialization of the Italian offer. On the other hand, the sectors of traditional Made in Italy were penalised, with the agri-food sector which would end up losing 450 million euros (-14%) and fashion over 200 million (-9%).
Finally, it should not be forgotten that the United Kingdom has been a strategic transit point for those Italian products destined for more distant markets, especially in the USA. It is likely that this same role will be replaced by other neighboring EU countries, with Ireland being the leading candidate.
