Portugal’s tourism and exports from the automotive sector are two of the areas that are liable to be affected the most from Brexit, according to a study sponsored by the Confederação Empresarial de Portugal.
This work, supported by Ernst & Young - Augusto Mateus & Associados, analyzed the impact of the UK’s exit from the European Union on several Portuguese products and service exports.
"IT products, electronic and optical products, electrical equipment and motor vehicles and trailers are identified as products with a higher degree of risk associated with Brexit," reads the document.
Other goods that are sensitive to Brexit, but with less risk, are food products, drinks, tobacco products, textiles, clothing, leather and related products, paper, paperboard, pharmaceuticals and pharmaceutical ingredients, rubber and plastic products, other non-metallic mineral products, base metals, processed metal products, machinery and furniture.
The study promoted by CIP also highlights the impact on tourism, where the UK is an important contributor.
"In 2016, there were around two million British guests who spent more than 9.5 million nights in Portugal. In fact, the vast majority of European tourists arriving in Portugal in 2016 were from the UK, accounting for 21% of the total number of guests and 28% of overnight stays in hotels, having grown at an average annual rate since 2010 of around 10% in both cases," according to the study.
"The collapse of the purchasing power of the British therefore is a threat, given the impact on the national tourism dynamic that has benefited the Portuguese economy and which has contributed to the fact that tourism has become increasingly important, representing, in 2016 , 7.1% of total Gross Value Added, with a 9.9% change over the previous year," reads the report.
In addition, "transport services will be affected, as well as financial services which are 41% reliant on the British market."
The report highlights the regions that may suffer the most from the UK's exit from the EU: for goods, the Alto Minho, Cávado, Ave and Tâmega and Sousa, followed by the regions of Terras de Trás el Montes, the metropolitan area of Porto, Beiras and Serra da Estrela.
At the services level, "the metropolitan area of Lisbon, the Algarve and Madeira are the regions with the greatest exposure to risk. The metropolitan area of Porto and the region of Coimbra also are noted in the study."
The UK will leave the European Union at the end of March next year, two years after the official start of the exit process and almost three years after the June 23, 2016 referendum which saw 52% of Britons vote to leave the European Union.
The report recommends government and industry step up efforts to promote Portugal in the British market and business leaders expressed a degree of optimism that Brexit might prove a positive experience for some companies if it limits access to EU markets for British competitors.
“Brexit will generate opportunities that could be seized by Portuguese companies given that, with Brexit, the United Kingdom will have more difficulties importing and exporting to and from other European Union countries,” read a CIP statement.
Portugal's Foreign Minister, Santos Silva, said any agreement on Brexit terms should include guidelines for a longer-term relationship between the UK and the EU that minimises trade barriers and maintains a close political relationship, adding that this relationship also should include defense, security and justice cooperation.
“If Brexit can be compared to a divorce, it’s a very special divorce because we’re getting divorced now so we can immediately get into a new relationship,” Santos Silva concluded.
