Will Brexit ultimately affect the performances of F1 teams from 2019 onwards?

[JonoNic]

Will the dynamics of a team be affected in any way?

[henry]

On a technical point in the near term it depends on how the next few weeks play out. If the U.K. agrees a withdrawal deal to leave the EU in March 2019 then not much that affects the teams directly changes for another 2 years. If a deal is not reached chaos is likely to ensue. Getting cars and personnel between the U.K. and EU will potentially require more, different, and as yet unspecified processes. It may or not have a flavour of the issues in India when F1 tried its hand there.

[marmer]

I read the title wrong I thought will Buxton was being accused of affecting performance

[JonoNic]

On a technical point in the near term it depends on how the next few weeks play out. If the U.K. agrees a withdrawal deal to leave the EU in March 2019 then not much that affects the teams directly changes for another 2 years. If a deal is not reached chaos is likely to ensue. Getting cars and personnel between the U.K. and EU will potentially require more, different, and as yet unspecified processes. It may or not have a flavour of the issues in India when F1 tried its hand there.

I was just thinking of parts being bought by F1 teams from all over the world, implications of delays at customs which could have a knock on effect of in season development. This could delay development or give rise to costs if teams have to develop and manufacture these parts in house. Implications are huge yet it all hangs on a deal that is to be made... could a team like Williams survive Brexit?

[henry]

On a technical point in the near term it depends on how the next few weeks play out. If the U.K. agrees a withdrawal deal to leave the EU in March 2019 then not much that affects the teams directly changes for another 2 years. If a deal is not reached chaos is likely to ensue. Getting cars and personnel between the U.K. and EU will potentially require more, different, and as yet unspecified processes. It may or not have a flavour of the issues in India when F1 tried its hand there.

I was just thinking of parts being bought by F1 teams from all over the world, implications of delays at customs which could have a knock on effect of in season development. This could delay development or give rise to costs if teams have to develop and manufacture these parts in house. Implications are huge yet it all hangs on a deal that is to be made... could a team like Williams survive Brexit?

As I said if we leave with a negotiated transition deal we will see, and the teams will see, very little difference from now.

Effectively on March 29 2019 the U.K. will cease to be a member of the EU club but will continue to enjoy the benefits of membership, single market, customs union, under a new legal agreement the sets out the rights and obligations of each side. The U.K. will continue to pay the membership fee and agrees to abide by any new club rules but will not take part in the management functions.

One thing that is not clear is the UK position in regard to the deals that the EU has with third countries. The EU have said they will ask those partners to extend the deals to the U.K. for the transition period. But they can’t guarantee that. So parts and services that rely on those agreements might be at risk of disruption.

[Tommy Cookers]

motor manufacture already relies on rather free flow of parts between countries that often don't have (free) trade agreements
so what's the problem ?

you don't need a trade agreement to trade
any citizen or commercial entity can trade with any other unless one of them is in N Korea or Iran etc
most commercial entities have 'trusted trader' status and so are exempt from checks at borders
and any country will allow temporary imports without tariff

the EU has very few trade agreements with anyone
3rd countries like Switzerland have a suite of agreements that effectively keep it equivalent to the EU countries
eg today the UK has over 80 agreements with Switzerland

[netoperek]

motor manufacture already relies on rather free flow of parts between countries that often don't have (free) trade agreements
so what's the problem ?
you don't need a trade agreement to trade
any citizen or commercial entity can trade with any other unless one of them is in N Korea or Iran etc
the EU has very few trade agreements with anyone

Thing is there's a free flow inside EU of parts, staff and services and anything else than free would be a step back. Very few parts had to be imported from outside EU, but when You narrow the scope to inside and outside UK, the proportions will shift quite significantly I would guess.

On a technical point in the near term it depends on how the next few weeks play out. If the U.K. agrees a withdrawal deal to leave the EU in March 2019 then not much that affects the teams directly changes for another 2 years. If a deal is not reached chaos is likely to ensue. Getting cars and personnel between the U.K. and EU will potentially require more, different, and as yet unspecified processes. It may or not have a flavour of the issues in India when F1 tried its hand there.

I was just thinking of parts being bought by F1 teams from all over the world, implications of delays at customs which could have a knock on effect of in season development. This could delay development or give rise to costs if teams have to develop and manufacture these parts in house. Implications are huge yet it all hangs on a deal that is to be made... could a team like Williams survive Brexit?

As I said if we leave with a negotiated transition deal we will see, and the teams will see, very little difference from now.

Effectively on March 29 2019 the U.K. will cease to be a member of the EU club but will continue to enjoy the benefits of membership, single market, customs union, under a new legal agreement the sets out the rights and obligations of each side. The U.K. will continue to pay the membership fee and agrees to abide by any new club rules but will not take part in the management functions.

One thing that is not clear is the UK position in regard to the deals that the EU has with third countries. The EU have said they will ask those partners to extend the deals to the U.K. for the transition period. But they can’t guarantee that. So parts and services that rely on those agreements might be at risk of disruption.

That's quite an optimistic thinking. Not all benefits of EU membership will hold, especially after transition period. Furthermore, nothing is really certain until 29th of March and to higher degree until june 2020. Decleration on future relations haven't been even voted in UK yet and it has to be agreed by the EU just before the brexit, too. What will happen after the transition time is really an unknown for now.

[Just_a_fan]

How much is bought in from outside the UK? The UK has a lot of small companies supporting motor sport and similar tech-related endeavours.

[FrukostScones]

Brexit won't happen.

[henry]

That's quite an optimistic thinking. Not all benefits of EU membership will hold, especially after transition period. Furthermore, nothing is really certain until 29th of March and to higher degree until june 2020. Decleration on future relations haven't been even voted in UK yet and it has to be agreed by the EU just before the brexit, too. What will happen after the transition time is really an unknown for now.

It was specifically the transition period I was noting. A legal agreement for the transition period has been formed but not yet signed, as you say. After the transition there is a political agreement which says, in essence, both sides will try hard to have a mutually beneficial relationship after 2020.

[henry]

I’m not sure that Brexit will be a big hardship for the F1 teams in the short term. I would think they have well organised logistics groups who make sure that everything is in place for races anywhere they are held. Paperwork, permits, etc. will be handled already. If more is needed because of a changed status between the EU and U.K. I’m sure they’ll take it in their stride. They might feel the effects of any delays incurred by paperwork processing, they’re always in a hurry, but costs will be a small part of an F1 team budget.

More difficult might be the restrictions on labour movement. Right now if the best engineer for the job is Italian then she/he gets employed. In the future, which future is yet to be decided, they might need to justify the employment of that person versus a U.K. native, and/or put them into a queue with doctors, accountants or any other skilled professional waiting for a visa to work in the U.K. This is an issue with which our Prime Minister is obsessed, although not so obsessed that she can be bothered to say just what the rules should be in the future.

[TAG]

What Brexit?

[henry]

One effect that has likely benefited the U.K. based teams has been the reduction in value of the GBP against the USD and Euro. I don’t know what proportion of expenditure is in local currency but it will have benefited Mercedes in comparison with Ferrari.

What the future trajectory of exchange rates will be is anybody’s guess.

[Big Tea]

When the cars go to race they are not 'trade' as they return home. What effect buying in parts will have I could not say, but the EU have made it plain that without free movement of people, one of the pillars of the EU, there will be no free trade agreement, and F1 will not go through the 'internal' gate at airports.

[Tommy Cookers]

the withdrawal bill (if passed) would continue the UK's free trade (with only the EU) for an indefinite time
(and it now seems that the MP's vote tomorrow on this bill is to be postponed)

Switzerland is a 3rd country that has free trade (with only the EU) but no free movement obligation to all EU people
an annual fee is charged for this agreement

interestingly, today the ECJ has announced the UK's right to remain in the EU without penalty
(the opposite of what was stated by the EU after the UK referendum constitutionally mandating withdrawal)
penalty meaning cancellation of the partial 'rebate' of the UK's (particularly large) annual fee charged by the EU

the UK 'always' has free movement for Irish people
there's more UK people thus entitled to hold an Irish passport than there's Irish people entitled to hold an Irish passport