Flavio Maluf is the CEO and Chairman of Eucatex, a leading Brazilian company that specializes in the production of high and medium density fiber panels and other building material from natural eucalyptus. The company boasts of having the largest local market share and is also one of the leading global companies, in this industry. As such, Flavio Maluf must be concerned by anything that might affect the sales of the company, be it in a positive or negative way. Maluf recently analyzed Brexit and the consequences that it would have.
Consequences on British Economy
Negative consequences were seen on the UK’s economy, immediately it exited EU. First, was the more than 12% drop in all the major stock markets. This was shortly followed by a devaluation in currency. In the long term, UK would suffer from restricted trade. They will no longer be allowed to trade freely with the members of EU. Trade will now be affected by tariffs and quotas if they are trading in this countries. Also, incoming investments will be greatly affected. However, the one benefit that they will gain from the exit is bilateral trade. They will now trade as they like, with other non-EU members, without being restricted by the body.
Impact on Brazil Imports and Exports
Brazil has everything to benefit from Brexit. Today, they can enter into bilateral trading agreements with UK, something that would not have been possible in the past, when they were still EU members. Therefore, they will be able to export to European nations more without the fear of restrictions and standards that were otherwise placed by EU. So, for companies such as Eucatex, which is located to Brazil, the move was an advantage to them.
Impacts on EU
EU will suffer greatly for losing UK as one of its members. UK was amongst the three largest contributors to this body. And now, with France lagging behind economically, it will all be left to Germany to support the body.