AA comment on implications of Brexit trade agreement

Following the publication of the text of the Brexit trade agreement between the EU and the UK, our Chief Executive Stephen Woodford has made the following comment on the implications of the deal for advertising and what we hope to see develop in the coming weeks to bolster the agreement.

“I am sure everyone in UK advertising was relieved to see a trade deal between the UK and EU that avoided the chaos of a no deal transition. At the Advertising Association we hope that this lays the foundations for expanding UK advertising exports to the EU even further. However, there are still many unanswered questions surrounding the future relationship on services, which are key to the success of our economy and make up the largest proportion of UK exports. The hard work of navigating these new arrangements in the midst of a global pandemic starts now, with many questions still to be resolved. There is no doubting the UK’s reputation for strategic and creative excellence, which our research with PwC published last year showed was the key driver for international buyers to choose UK advertising and other marketing services businesses. This will need to be promoted even more aggressively in the coming years, which is the top priority for our UK Advertising Exports Group, working in partnership with the Department for International Trade.”

We further noted that:

• The agreement puts in place temporary provisions for the continued free flow of personal data until a data adequacy decision is reached. This provides a welcome reprieve from what could have been an unwelcome cliff-edge at the end of the transition period. Whilst the signs are that we will get a data adequacy before the 1 July 2021, businesses are being advised to incorporate Standard Contractual Clauses in contracts with their EU partners as a precaution, to minimise the risk of disruption.
• For advertising, there will be a number of changes particularly in how UK companies currently operate cross border that do not have an establishment in the EU. As per EU WTO commitments, roughly half of the EU Member States require an economic means test for Contractual Service Suppliers. Fortunately, some of our biggest export markets France, Germany and Ireland will not require this. Self-employed independent professionals will need to review local laws as this will be subject to individual host state rules.
• Finally, the UK will no longer benefit from Country of Origin rules under the Audiovisual Media Services Directive. This will have a particular impact on UK-based broadcasters carrying UK advertising. Where previously they could rely on Ofcom rules and licensing to broadcast EU-wide, the new reality is that without an EU licence, UK-based broadcasters would be subject to host state rules and this will affect the type of advertising they can carry.