Jersey’s Brexit op­por­tu­nity

Global in­vest­ment, a third-coun­try sta­tus with the EU and strong ties with France en­sure the is­land is well po­si­tioned to take ad­van­tage of Brexit, finds Carla Passino

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The is­land is well po­si­tioned to make the most of the changes ahead, be­lieves Carla Passino

Brexit hap­pened to Jersey. As the is­land is a Crown De­pen­dency, only res­i­dents who had lived in the UK within the 15 years pre­ced­ing June 23, 2016, could vote in the ref­er­en­dum, so many lo­cals didn’t have a say. And al­though opin­ion was di­vided, many na­tive Jersey­men would have liked Bri­tain to stay in the eu. ‘We share a cul­ture with Nor­mandy,’ says Dominic Jones of JP restau­rants, a Jersey busi­ness­man with a fi­nance back­ground. ‘One of the sad­dest things about Brexit was re­al­is­ing it was putting po­ten­tial bar­ri­ers be­tween us and France.’

Now that the de­ci­sion has been taken, how­ever, Jersey is ready—and very well placed —to make the most of this mo­men­tous change. ‘Peo­ple have be­come rec­on­ciled to the re­sult and are now look­ing at what op­por­tu­ni­ties there may be,’ says Sir Philip Bail­hache, the is­land’s Min­is­ter for ex­ter­nal re­la­tions. ‘i think there are cer­tainly a num­ber, par­tic­u­larly in re­la­tion to trade.’

Over the cen­turies, adds Mr Jones, Jersey has of­ten had to grasp open­ings as they pre­sented them­selves and Brexit is no dif­fer­ent. ‘We’ve had many times when macroe­co­nomic events around the world chal­lenged our econ­omy. each time, we’ve had to think about some­thing to do. We have the abil­ity to adapt and that, i think, is our biggest op­por­tu­nity.’

that said, Jersey has an ad­di­tional ad­van­tage this time round—it al­ready has strong ties with non-eu coun­tries, whereas its trade with the eu is rel­a­tively lim­ited. For ex­am­ple, in fi­nance, which is the is­land’s main eco­nomic driver, only 16% of in­vest­ment comes from within the eu, with 40% com­ing from the UK and 44% from out­side the bloc. ever re­source­ful, the Jersey gov­ern­ment is al­ready be­gin­ning to build on these ex­tra-euro­pean links.

‘We are cur­rently seek­ing an en­trust­ment from the UK to ne­go­ti­ate bi­lat­eral in­vest­ment treaties with other coun­tries and i hope it’ll be given it quite soon,’ ex­plains Sir Philip. ‘the pur­pose is to lay the foun­da­tion for greater busi­ness with ar­eas we are in­ter­ested in: the Gulf, par­tic­u­larly the United Arab emi­rates and Qatar, and places in Africa.’

Nor will these global deals pre­clude do­ing busi­ness with the eu be­cause, as Sir Philip points out, noth­ing fun­da­men­tal has changed in Jersey’s own re­la­tion­ship with the bloc. the Chan­nel is­lands trade goods freely with the eu un­der a pro­to­col of the UK’S Ac­ces­sion treaty, but are con­sid­ered third coun­tries for ev­ery­thing else.

thus, if the eu and the UK reach no agree­ment by April 2019, the free cir­cu­la­tion of agri­cul­tural and man­u­fac­tured prod­ucts will stop, but all the other rules gov­ern­ing trade be­tween Jersey and the eu will re­main in place—in­clud­ing, cru­cially, those that al­low lo­cal fi­nan­cial com­pa­nies to ac­cess the eu market.

in­deed, fi­nan­cial-ser­vices trade with the eu may even im­prove in the near fu­ture. Last year, the is­land re­ceived the green light from the euro­pean Se­cu­ri­ties and Mar­kets Author­ity to ap­ply for an Al­ter­na­tive in­vest­ment Funds pass­port. Al­though the euro­pean Com­mis­sion still needs to give the go-ahead for it to be is­sued, this should even­tu­ally make it much eas­ier for Jersey’s firms to sell and man­age funds through­out the eu.

Other lo­cal in­dus­tries could also see an in­crease in euro­pean—as well as global— trade. the is­land has al­ready en­joyed some

suc­cess in boost­ing its ap­peal as a tourism des­ti­na­tion in Ger­many and, re­cently, Aus­tria, where many Jersey res­i­dents go ski­ing. ‘The Aus­trian am­bas­sador was in Jersey a cou­ple of days ago and we were talk­ing about the pos­si­bil­ity of de­vel­op­ing a tourism link,’ says Sir Philip.

‘There are a num­ber of coun­tries where we’d like to [do that]. The ex­change rate is a good thing be­cause the weak­ness of the pound means it’s cheaper for Euro­peans to come to Jersey.’

That said, if re­la­tion­ships be­tween the UK and the EU turn sour, the is­land would ob­vi­ously face some chal­lenges. For ex­am­ple, should the UK leave the cus­toms union, it would se­verely af­fect Jersey fish­er­men, who ex­port much of their catch to France. Jersey’s own rap­port with the bloc could also be­come a lit­tle prob­lem­atic, ac­cord­ing to Sir Philip, be­cause the is­land is of­ten per­ceived as an ex­ten­sion of Bri­tain.

How­ever, the lo­cal gov­ern­ment would move to rem­edy that. ‘We’d find it a chal­lenge to de­velop a sep­a­rate re­la­tion­ship [with the EU], but we’d cer­tainly be try­ing to do that.’

Jersey’s ex­cel­lent re­gional links with Brit­tany and Nor­mandy al­ready pro­vide a solid foun­da­tion to build deeper ties with France and, even­tu­ally, the rest of the EU. ‘Jersey is part of the French-speak­ing Par­lia­men­tary group, we’re talk­ing about start­ing a bilin­gual State pri­mary school, we have a French con­sulate here and our own Chan­nel Is­land of­fice in Nor­mandy,’ ex­plains Mr Jones.

‘Nor­mandy will be a strong sup­porter of ours. Be­cause of our con­sti­tu­tional re­la­tion­ship with the UK, we’re wait­ing to see the out­come [of the Brexit dis­cus­sions]. But if we don’t get what is of in­ter­est to us, we will go and start ne­go­ti­at­ing separately.’

At a time when the idea of a sec­ond in­de­pen­dence ref­er­en­dum has been mooted in Scot­land, would Jersey ever con­sider go­ing solo? Highly un­likely, ac­cord­ing to Sir Philip: ‘There’s no plan for in­de­pen­dence at the mo­ment. Cir­cum­stances would have to change very badly for that to be­come a pos­si­bil­ity.’

‘We have the abil­ity to adapt and that, I think, is our biggest op­por­tu­nity’

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