Trump and Brexit: responding to uncertain times

usvsukThe election of Donald Trump, hot on the heels of the Brexit vote, highlights the need for businesses and industries to respond to uncertain times by actively managing their political interests.

Our UK Public Affairs experts are, predictably enough, currently engaged in a number of areas where the lack of clarity caused by Brexit, presents threats, but also opportunities. The vaping industry, fast growing but hardly a dominant sector of commerce, is a good example of both the sheer weight of work that the British Government will need to manage over the next two years, and how advantages might be created by judicious use of political engagement.

Vapers supported Brexit enthusiastically, because they hoped the UK would exempt e-cigarettes from tobacco regulation the minute it was free to create its own regulatory regime. But faced with the huge Brexit workload, how to persuade HMG to make vaping a priority? Aspect’s UK PA team is currently working to raise the profile of vaping as a key public health issue – and to get it higher up the UK political agenda.

We are doing the same for our clients in the mining sector.  Aspect has run the UK All-Party Parliamentary Group International Mining for many years, with the focus now turning to how a post-Brexit Britain can seize more opportunities across the global mining industry.  Working closely with the new Department for International Trade, we are helping British companies seek out new markets.

If you would like us to help you critically examine the risks and opportunities that Brexit presents for your company or sector in the UK, please contact our Head of UK Public Affairs, Jeff Townsend. Together with our US partners, we can also do the same for you if the wider post-Trump uncertainties are creating turbulence in the United States or your international business.  If you would like to know more about Aspect’s strategic communications and public affairs work in Europe or further afield, do contact me without delay.

James Hunt
Managing Partner

Trump: Europe’s nightmare? Maybe we should take a breather.

By James Hunt, Managing Partner

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I have never been a strong believer in the “great man” theory of history.  I think history advances in movements that some people see and some do not – and that some people can successfully exploit, because they and what they stand for captures a mood.

We’ve certainly seen Mr Trump capture a public mood.  It is true America has never been so split.  It is also perhaps true that Hillary Clinton was the wrong candidate at the wrong time.  But certainly Trump’s strong points seem to have served him well.  He is forthright, he says what he thinks and he is an anti-politician when a good half of America is fed up of politicians.  That is the wave of history he is surfing.  And in many ways he is quite good at it: self-confident, will not take no for an answer, and there to fix a big problem.

Europeans are, of course, generally not happy with a candidate (and now President-elect) who seems in many ways to be part of the problem: unpolished and uninterested in detail, and too willing to hold grudges and alienate entire communities. However, given how often Mr. Trump has changed positions in the past, it is difficult to know what a President Trump will actually stand for.

There are a couple of real threats that a President Trump may present on the global stage, if his recent pronouncements become policy. One is to NATO and security in Europe. Champagne corks are popping in Moscow, and many are worried in Ukraine, the Baltics and across Central Europe at the thought of an American President seemingly willing to abandon his country’s longstanding commitment to the Atlantic Alliance. The other is to the future of the planet: Trump is a climate sceptic and seems set on tearing up President Obama’s commitments and rejecting the COP21 agreement.

He will also undoubtedly embolden populists on this side of the Atlantic – Marine Le Pen has already congratulated Trump, though it could be argued that this is also a welcome wake-up call for defenders of liberal democracy everywhere who have perhaps become too complacent.

The biggest problem, though, may be that he has never done this before.  For the first time since Dwight Eisenhower, the US has elected a President who has never served in elected office, anywhere – and the first President ever never to have served in any public service capacity.

So should we panic?  Should business people around the world follow the lead of the markets this morning, and jump off the nearest cliff?

No – and here’s three reasons why.

One – America’s founding fathers practically wrote the Constitution for nights like this.  There is a reason that the President is not popularly elected, but is voted in via an electoral college.  There’s a reason why debate rules allow filibustering.  There is a reason for all the legendary ‘checks and balances’.  Even with a Republican Senate and House, Trump will still find it difficult to push through his ‘programme’ (if we can even call it that).  Democrats will fight it, but so will many Republicans.  Remember, half his own party disowned him, and will not support moves they think will hurt them down the line.  The off-year election in 2018 may well see the Senate swing Democrat once again, particularly if The Donald is allowed to re-open his Twitter account or commits one gaffe too many.

Two – partners like China’s President Xi might have something to say about it.  We live in a multi-polar world now.  Like it or not, the US can no longer call all the shots. A President Trump is going to have to learn to compromise.  He’s going to have to learn that he needs his friends – and that they might tell him that they don’t think it’s a big idea to tell off trading partners for perceived grievances, for example.  International statesmanship is a little more difficult than presenting The Apprentice – indeed, Trump will be the apprentice in international affairs for quite some time.  No wonder Mr Putin is so happy.  Those who were so dismayed by Brexit lamented its pointlessness: no country can be an island any more, and the world is too globalised for any one country to fashion it in its own image – even America.

Third – it’s those historic movements.  What we learn as we get older is that what looks immutable isn’t.  “Stuff happens”, all the time.  Life will move on.  President Trump will face problems and challenges – some brought on by global events, some by domestic; some his fault, some not – that will occupy his time and energy.  Will his election change China’s long-term strategy? Will it fix the Euro? Will it remove a single one of Islamic State’s IED’s, increase the iron ore price, or even save Bristol Rugby from relegation?  No. Societal and historic macro-trends, as well as the unpredictable day-to-day events, are bigger than us all.  Trump may alter the direction a little, but the deep trends won’t alter.

Trump is a victim of these macro-trends as much as the rest of us. Sure, he will create theatre. He will appoint Supreme Court judges that make America more conservative and more fractious. But he alone cannot change a world defined more by technological advances, societal and demographic shifts, and climate change that is ultimately impossible to deny.  No one person can, no matter how great: not any more.  So my message to the international business community would be to hang onto your hats. The ride won’t be fun, but don’t change your plans.

To Brexit or not to Brexit?

Evan O’Connell – Head of French Public Affairs and Media at Aspect Consulting, Paris.

Eliot Edwards – Director for Public Relations & Government Relations at Aspect Consulting, Brussels.

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One week on from Britain’s momentous decision to leave the EU, things have moved faster than most could have anticipated. Markets have suffered- the UK has lost its AAA rating and more gloom is in store. The two favourites for Conservative Party leadership, Boris Johnson and George Osborne, do not want David Cameron’s job and Theresa May has emerged as the front-runner. The future of the UK – as a political unit as well as its membership of the EU – has never been more unclear. Or at least that threatened to be the case until France and Spain put paid to the idea of Scotland remaining in the EU and instead reprimanded Messrs. Jean-Claude Juncker and Martin Schulz for giving Nicola Sturgeon an airing in Brussels.

For the moment at least, we must assume the UK will leave the EU as electors demanded last week. Of course, many still hope there might be a way out of Brexit – that a combination of regret at a misguided decision, economic turmoil and tough negotiating will somehow reverse the result, and the UK will “remain” in the EU. Of course, if the new Conservative leader were to call a snap election, a Labour Party led by an actually electable leader – let us say David Miliband – campaigning on a Remain ticket could, if successful at the ballot box, simply refuse to ratify Brexit. Today, Theresa May might give assurances to her Base that there will be no election until 2020 if she is elected head of the Conservative Party, but who knows what tomorrow might bring?

So where do we stand today one week on from the referendum? Britain has a lame duck Prime Minister, Scotland is threatening to hold an independence referendum, Sinn Féin is calling for a referendum on a United Ireland, and there is a dearth of real political leadership on all sides of the political divide at Westminster. Neither is there clarity on when Article 50 will be invoked or who will be in the government presiding over negotiations. Across the Channel, no unanimity exists on exactly how conciliatory or tough on the UK the EU27 should be. At least one continental foreign ministry has today suggested to us that, even after invoking Article 50, the UK could change its mind up until the very last day.

On one side of the spectrum, in the run-up to a presidential election, François Hollande needs to show the French electorate that anyone who leaves the EU will pay a dear price in order to deter them from voting for the National Front. “Contagion” from Brexit must be avoided at all cost. Whilst in the run-up to a General Election in Germany, the Finance Minister, Wolfgang Schäuble, stresses the need to learn the lessons of Brexit and confidently asserts that “More Europe” is not the answer to every problem. Of course, Germany fears losing vital trade ties with one if its biggest markets.

Yet there is some agreement on the Continent: all agree that the UK cannot have full access to the Single Market without respecting the “four freedoms”, including freedom of movement. Or do they? Cracks are even appearing on that fundamental principle as Michel Sapin, the French Finance Minister, claimed that everything will be on the negotiating table.

The EU27, publicly, expect the UK to invoke Article 50 the day a new Prime Minister is sworn in – yet several candidates, including frontrunner Theresa May, have suggested the UK may wait until the end of the year before officially beginning negotiations. This delay might allow for some stability to return to the UK’s politics and take the emotional sting out of the debate but drawing out the process might further sour relations with the EU and, perhaps, prolong uncertainty on the markets.
How can businesses protect their interests in such uncertain times? For now, the priority has to be for companies to lobby those who will inform negotiating positions in UK, EU27 and Brussels to make them appreciate the damage hasty, ill thought-through negotiations could bring. They must push for calm, well thought-out negotiations that will lead to the least disruptive situation possible for trade and investment in the long term. A message must be sent to German, French and Italian officials, in particular, that the UK be treated fairly and a constructive approach taken. Companies from the outside Europe, the UK and the EU27 need to come together and collectively leverage political support on the ground in key EU Member States calling for a non-punitive approach to negotiations.

Business must focus on the post-Brexit reality as it stands today: the UK might have been the key opinion former inside the EU on technology, trade and single market issues, but it might be gone tomorrow. Therefore, they must look increasingly to themselves to defend their own interests. If Brexit indeed comes to pass, it will fundamentally change the EU’s internal dynamics. The EU’s biggest champion of free trade and market liberalisation will be gone and more protectionist tendencies remain unchecked. Sadly, unless everyone sees sense, there is a real danger of a “lose-lose” outcome that will only serve to undermine the standing and attractiveness of both the UK and EU27 economies.

Aspect Consulting on Brexit in the French media

Our lead public affairs and communications consultant in France – Evan O’Connell – has spoken on Brexit in several French media outlets over the past two weeks. Media appearances include:

  • France 24 (in French), June 30th (Part 1, Part 2)
  • Médiapart Live (in French), June 26th (link)
  • RFI (in French), June 24th (link)
  • France 24 (in English), June 20th (Part 1, Part 2)

As a company with strong British roots and a presence across Europe, we are ideally placed to help guide corporates through this tumultuous time from a regulatory, political and communications standpoint. One of our key strengths is our ability to communicate the British political situation to foreign audiences, and to communicate and lobby on behalf of clients on issues connected to Britain’s relationship with Europe.

The Beast of Brexit: The Power — and Danger — of Emotional Messaging

Blog post by Richard Levick, Founder and CEO of Aspect Consulting strategic partner LEVICK, who can be followed on twitter at @richardlevick. Originally published in Forbes (link here).

“There is always a well-known solution to every human problem – neat, plausible, and wrong. — L. Mencken, 1920

Remember the scene in Jaws when the beachgoers stare, eyes disbelieving, mouths agape, at the pandemonium caused by the shark?

Well, that pretty much sums up the transatlantic reaction to the abrupt and potentially catastrophic decision by British voters to leave the European Union – and not just at 10 Downing Street and the White House, but at investment banks, economic policy foundations, think tanks, corporate suites, media headquarters, et al. Everyone is trying to make sense of what appears to be a profound rejection of global economic integration, “establishment” institutions, “elite” opinion, and the status quo. Whatever you may think of him and his policies, British Prime Minister David Cameron certainly deserved a more dignified departure than being devoured by the beast of Brexit.

Strip away all the macroeconomic and geo-strategic back and forth and the debate over Brexit came down to this: the seductive power and danger of visceral messaging. It’s not exactly a revelation in our digital media and myth-driven age that emotion – if you’ll forgive the verb –trumps fact.

Early on in the debate, the “Leave” forces, abetted by an unsuspecting media, seized the upper hand. First, they took an enormously complex issue and caricatured it, reducing it to a harmless-sounding phrase. “Brexit” sounds like something you sprinkle on your oatmeal, not a painful split that will profoundly disrupt, if not sever, the UK’s economic ties to the world. Once “Brexit” became the all-purpose euphemism to describe the referendum, the “Leave” forces were halfway home.

Consider this: What if the shorthand phrase had been “DivorceEU?”? Think the outcome would have been the same?

The opposition’s other Machiavellian move was to make “Leave” the vessel through which embittered voters could express their frustrations on any and all issues. As my colleague James Hunt, the head of the London-Brussels communications firm Aspect Consulting, told me a few hours after the polls closed: “Britain made its decision based on lies, misunderstandings, and misconceptions. The ‘Leave’ campaign made no effort to tell the truth, or to contextualize; or at least, not when anyone was listening.

“Instead it was all about Britons ‘taking back control,’ and therefore being able to unilaterally stop immigration (which we can’t and won’t), prevent a European army (which wasn’t on the table), and stop sending 350bn GBP a week to Brussels (which is a gross exaggeration; it’s about one-third that amount). The ‘Leave’ campaign knew that most working class voters understood very little about the nature of Britain’s membership in the EU. Although it’s being presented as an elite vs. anti-elite battle, the reality is that a certain section of the elite knowingly spread falsehoods, leading voters to an outcome that many of them now regret.”

The “Remain” forces figured out too late that lofty arguments about reciprocal trade fall flat when the other side is telling voters that the European Union is the bogeyman behind all their ills. Upset that jobs have left your community? Vote Brexit. Concerned about immigrants taking over? Vote Brexit. Want stronger national health care? Vote Brexit.

One of the many ironies of the debate was Google’s revelation that British-based searches for the “EU” or “What will happen if Britain leaves the EU?” went astronomically up after the polls closed. Brits may not have understood what they were voting against but, by golly, they were voting against it! My friend James Hunt isn’t the only Brit who believes that voters are already suffering from buyer’s remorse. Alas, they don’t get a do-over.

From day one, “Remain” should have waged a campaign rooted in emotion, extolling in understandable terms and images the everyday benefits of Britain’s membership in the EU. And on the flip side, they should have painted in dramatic colors the consequences of a “Leave” vote. Not citing white papers from the London School of Economics or the views of this professor or that but tapping working people to talk in simple language about the dangers inherent in divorcing Britain from the EU.

Prime Minister Cameron and the British establishment allowed extremists to define this vote. They didn’t fight fire with fire. They fought fire with salt and very quickly lost control of a conflagration that, left unchecked, threatens to engulf the global economy.

What lessons can be drawn from this debacle? First and foremost, never underestimate the power of emotion in public discourse. In troubled times, especially when “elites” make a convenient foil, voters will seize on the visceral, ignoring facts and logic.

Norwegian-born business communications strategist Rolf Olsen, the CEO of Swiss-based Leidar, observes, “It will be extremely important for the EU leadership to listen and find ways to engage people in Europe in their affairs.  One way could be to let people participate in the election of the President.  EU leadership failed to unite behind a strong narrative and should feel deeply responsible for Brexit. Hopefully this vote will inspire some positive change in Brussels.”

What H.L. Mencken feared most was democracy run amok, the dire repercussions of ignorance controlling the ballot box. Remember what happened after the beachgoers in Jaws got over their initial shock? They started running away from the water willy-nilly.

Let’s hope cooler heads prevail in the wake of Brexit. The leaders of the industrialized world need to step up and assuage fears.

Donald Trump’s initial reaction to the Brexit vote – speculating about how a shattered British pound might fatten the coffers of his Scottish golf resort – is not likely to be seen as statesmanship in action. But The Donald doesn’t care. Soon enough, he will figure out how to politically exploit – in shameless, emotional terms worthy of the back page of a British tabloid – the meaning of Britain’s defiance.

Secretary Clinton: forewarned is forearmed.

Good Morning Brexit

Blog post by Eliot Edwards, Director of Public Affairs.

One might have expected not to be able to pass down Rue du Luxembourg this morning for all the lobbyists turning cartwheels of joy at the news that the UK has turned its collective back on the EU. After all, the major beneficiaries of Brexit will ultimately be the lobbyists and lawyers who will have to plug the breach left behind by all those departing British officials and politicians from Brussels on behalf of their clients. However, this Brussels-based British lobbyist, for one, is not rejoicing, and the mood in the EU Quarter is indeed a somber one. If anyone was in any doubt about Brexit’s catastrophic potential, then one need look no further than the run on the pound overnight.

However one spins it, all parties have emerged weakened as a result of the UK deciding to turn its back on the EU, and uncertainty still reigns. Which is obviously not good news for business, investors or government. Therefore, unleashing its worst regulatory instincts would not now be the wisest direction for the EU Commission to go, but that could precisely be where we’re heading as moves to reassert EU core principles threaten to become a knee-jerk reaction to Brexit. Despite the referendum result, voices both inside the French government and EU Commission assert that ‘’more Europe’’ is the solution to a host of problems confronting the EU. Which could translate in the long term as more regulation for business.

The implications of Brexit for the corporate world are legion of course. Post-Brexit, there could be a kicking out against liberal economic and trade policies associated with the UK in Europe. In regard to TTIP, the pace of negotiations will slow to a snail’s pace now the UK has departed, as both the French and German governments face elections in 2017 and encounter fierce domestic opposition to TTIP. New tech companies from Silicon Valley and elsewhere will discover to their cost that not having the UK on the Council or British MEPs at the EU Parliament means there will be no reliable moderating influence on some of their more protectionist and privacy fixated continental counterparts in Brussels.

So what exactly can companies do to make sure their voices are heard and interests defended? In the immediate term, all companies need to make those negotiating, both on behalf of the EU and the UK, fully understand what is at stake for all concerned. Business voices like Markus Kerber, head of the BDI (the German employers’ lobby), are calling on Europe’s leaders not to risk damaging trade with punitive post-Brexit tariffs – yet there will be pressure from many in Paris and Berlin to make an example of the UK to avoid other countries having the same idea. In the medium to long term, U.S. companies will need to significantly intensify their political engagement in both Brussels and at EU member state level, and they will also have to be readier to enter into coalitions with local actors in member states in order to leverage their domestic political support in Brussels to insulate themselves.

So what now in regard to the negotiations? The unvarnished truth is there is no real precedent for the situation in which we find ourselves today. We can probably expect protracted periods of uncertainty marked by intermittent flare-ups of mutual recrimination and resentment as negotiations unfurl. Much hangs on how the UK’s former partners react to the choice the British people have made and the spirit in which a new Westminster administration negotiates.  On the British side, the tone will be set by whoever sits in Number 10 Downing Street.

David Cameron has also just stepped down, meaning this autumn’s Conservative Party conference will look more like the hustings of a leadership contest. A new Conservative Government might not be in place until late November. This could add to the uncertainty and delay negotiations.

The Vote Leave team’s renegotiation roadmap stressed that the process should “not be rushed” but they didn’t seem to taken into consideration the views of those sitting across the negotiating table. Every indication is that Britain’s former partners do not want drawn-out negotiations. Jean-Claude Juncker and Emmanuel Macron are not the only ones in Europe to be terrified by the specter of Brexit “contagion” and a feeling seems to be taking hold that the British need to be dealt with firmly as a deterrent to other disaffected member states getting “uppity’”. Let’s all hope that the voices of the likes of the Markus Kerbers of this world start to be heeded and are heeded soon.

All eyes on the EU Skills Agenda

Blog post by Alba Xhixha, Western Balkans specialist, Senior Communications and EU Affairs Manager, who can be followed on twitter at @Alba_Xhixha. Originally published in EurActiv (link here).

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Unemployment rates continue to run high across Europe; 10 June saw the European Commission publish its much-anticipated Skills Agenda. It is a welcome step towards addressing this challenge, and one that will need to be further built upon, writes Alba Xhixha.

Alba Xhixha is Senior Communications and Government Affairs Manager at Aspect Consulting.

Despite a plethora of policy initiatives, unemployment rates have only decreased slightly – at 18.8%, the youth joblessness rate is more than double that of the overall population. The situation is equally challenging for older citizens, who are more likely to suffer from long-term unemployment and are at greater risk of poverty.

Paradoxically, despite the ‘over-education’ in Europe, two million vacancies remain unfilled – particularly in STEM areas such as science, technology, engineering and mathematics. This has huge implications for sectors such as Big Data Analytics for example. Indeed, 40% of European employers say they cannot find people with the skills they need to grow and innovate. PwC’s Annual CEO Survey, published this year, also reveals that 72% of CEOs globally are concerned about the availability of key skills.

To make matters worse, job markets are being transformed by technology and the impact of automation on employment will only increase over time. A recent study by Deloitte showed that around 114,000 jobs in the legal sector alone are likely to become automated, and another 39% of jobs are at “high risk” of being made redundant by machines in the next two decades.

With this in mind, and with an increasingly large skills gap, creating jobs is a bigger challenge than ever for policymakers, especially as labour markets become more sophisticated.  The required skill-sets needed are now increasingly broad – employers need people with soft skills who are problem-solvers, analytical thinkers, multilingual, multicultural, entrepreneurial, tech-savvy and team players.

The newly launched Skills Agenda recognises that skills development is crucial for meeting this fundamental challenge. This is not to say that Europeans are under-educated: on the contrary, the real question is what type of education we are getting, and whether it adequately prepares us for the labour market.

The skills mismatch is symptomatic of a larger and much more fundamental problem – our inability to accurately anticipate what the labour market needs and adjust our education systems accordingly. The Skills Agenda’s ‘Blueprint for Sectoral Cooperation on Skills’, which aims to improve skills intelligence and address skills gaps in specific economic sectors, seeks to address these challenges. Similarly, the ‘Digital Skills and Jobs Coalition’ action point, which envisages closer collaboration between education policy makers and employers to agree on which digitals skills are needed and how to develop them, is a crucial piece in the policymaking jigsaw.

The Commission should also be applauded for its clear vision on ensuring the skills of migrants and refugees are accurately profiled and enhanced so Europe can fully harness their potential.  Studies, like the 2015 Global Entrepreneurship Monitor UK report, show that migrants are more likely to be entrepreneurs than those born locally.

But if the Skills Agenda is to maximise its impact then we also need smarter education – an approach that addresses technical skill gaps, fosters closer collaboration with the private sector, is more hands-on in nature and one that promotes inter-generational exchange, outside the traditional classroom. Different demographic groups possess different skills-sets and all age groups benefit from a transfer of know-how, experience and ideas, thus narrowing the skills gap. Smart education should also focus on promoting an entrepreneurial culture to ensure that both young and old equally have the opportunity to remain economically active whatever the future holds.

Regardless of which side of the political divide one is on, labour market mobility is today a reality and should therefore also be an important part of the Agenda, as some labour markets may have a surplus of some skills but a shortage of others. Policy-makers and education systems therefore have a ‘’duty of care’’ to prepare the next generation to embrace the opportunities offered by the European Single Market and the right to the freedom of movement. That includes focusing on foreign language skills, overseas traineeship programs and the development of soft skills – flexibility, multiculturalism, team spirit and open-mindedness.

Employers will certainly become more demanding and so should we of ourselves. Being prepared is critical to a successful future. The Skills Agenda is a welcome first step in that direction. Its true value, however, will be evaluated based on its ability to deliver real change.