The Impact of Brexit on the European Armament Industry

A year after the UK’s vote to leave the bloc, there has been altogether little thinking dedicated to the potential consequences of Brexit on the British and continental armament industry. The most likely scenario will see the UK leave the European Union following the Brexit talks with Brussels, and negotiate a different status in relation to the single market as well as to access to a variety of EU funding. This status will have to be defined within the framework of overall Brexit negotiations, and the margin of manoeuvre for defining specific defence measures will depend on the overall settlement.

However, it remains difficult today to realistically identify what the UK government’s desired outcome is, and how that translates into its bargaining positions on the whole spectrum of technical issues which are on the table. It is also challenging to predict what the country’s general intent will be across the coming months of negotiations, and the political context remains volatile. In January 2017, the British Prime Minister stated that she would look to take the UK out of the Single European Market (SEM), and that the economic relationship between the EU and the UK should then be governed by a Free Trade Agreement (FTA). She has argued that ‘we are leaving the EU but we are not turning our backs on Europe’…