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Georgina Adam: What's Next After Brexit?

Published on , by Pierre Naquin

After four years of hesitation and negotiations, Brexit is now a reality. Georgina Adam, an international art specialist, analyses the initial effects.

Courtesy Georgina Adam Georgina Adam: What's Next After Brexit?

Courtesy Georgina Adam

Georgina Adam is the star editorial writer for the Financial Times and a key figure at all the talks, conferences and events in the art world. After studying Islamic Art in Paris and working at the Ecole du Louvre as an auditor, she soon became the special Paris correspondent for the Daily Telegraph. She spent five years in Japan (1995-2000), and then collaborated with The Art Newspaper before becoming editor of the art market section on her return to the UK. In 2008, she left her full-time role while continuing to write for the newspaper, and began producing a weekly column for the FT. In 2014, she published her first book, Big Bucks, followed four years later by Dark Side of the Boom. Her next book will deal with the recent upsurge in the number of private museums.

Are we beginning to feel the first effects of Brexit on the other side of the Channel?
Not really. There is usually not much activity in the art market during January and most of the first quarter's fairs (BRAFA, artgenève, TEFAF, etc.) have been either postponed or canceled because of Covid. However, we've been seeing the first refusals at the border.

Which players will be the most affected?
International operators are already used to import and export procedures and/or work with specialized transporters. These major players should notice "only" a heavier workload and longer times. The smaller ones, on the other hand, have to integrate a lot of new procedures, which can sometimes be scary. T-Forms (transit forms) could also be a problem for some: they involve providing a bank guarantee covering import VAT on goods in transit. For a big fair, this can amount to hundreds of thousands of euros. I think many will decide to use freight forwarders, which will increase costs. The good thing is that this is an opportunity for specialized companies, because of the economic activity involved.

There seems to be a big gulf between the promises of the Leave campaign and the agreement finally reached.
First of all, I must admit that I myself was a fervent Remainer. So the objectivity of my comments should be seen in the light of my views. Clearly, the main promise of Brexit from an economic standpoint was to end the normative and administrative burden imposed by Brussels. From this point of view, there are no two ways about it: red tape has increased enormously as a result of the UK leaving the Customs Union—when the European Union currently represents 53% of the United Kingdom's imports (€301 billion) and 47% of its exports (€194 billion). In the end, the art market will perhaps be one of the least impacted sectors. Clare McAndrew showed in her last report that imports/exports to the EU represented only 20% of the UK's external art trade. As for the opportunity of signing free trade agreements with other countries, I feel the timing couldn't be worse, as globalization is now out of favor. But above all, it's an unbelievable step backwards: less freedom of movement, less freedom of employment, less freedom full stop, plus the end of Erasmus, the end of the equivalence of diplomas, and more. It has truly impoverished the country.

Do you think Boris Johnson will implement a dumping plan?
I don't really believe in "Singapore on the Thames". The ten free ports announced to boost the British economy will be of little interest compared to the bonded warehouses already run by freight forwarders. As far as art is concerned, the agreement stipulates maintaining the artist resale royalty; after hesitating to apply it for a long time, players realized that it had no impact on the level of business. VAT on imports is already very low and at rates similar to those in Europe. The UNESCO and Washington conventions are still in force. The only (small) difference is that the UK might finally—after introducing it in December—not apply the transposition of the 2019 EU directive on the restitution of cultural goods without a statutory limitation.

What about Northern Ireland?
This is a real unknown quantity. The Blair government had managed to put an end to the violence between the two Irelands with the Good Friday Agreement in the late 1990s, which included the removal of the border. As a result, now that a border has to be reintroduced, it was decided to place it somewhere in the Irish Sea, which de facto created a separation between Northern Ireland and Great Britain... within the same country. Even though the religious balance in Northern Ireland has changed, and there is now a real desire for Scottish independence, I don't believe the United Kingdom should be broken up. Northern Ireland, for example, receives a lot of money from the central government, so it would not be in its interest that this should happen.

Could a new hub in Europe take over from London?
Paris seems to be the obvious choice, with no serious competitors. It is already where half the transactions in Europe outside the UK take place; it is home to the shareholders of the two biggest auction houses, and it has all the necessary logistics and service infrastructures. However, it should not be assumed that everyone will open new offices in France. The few very big players for which it is immediately relevant, have all mostly done so already. The other slightly less global players, for which it is more a question of opportunity, currently have other fish to fry. Given the Covid fall-out, galleries are all busy cost-cutting. Gagosian, for instance, has just closed its gallery in San Francisco.

What position will the British capital retain?
That mainly depends on the power and economic appeal it manages to maintain. If all the bankers, industrialists, investors, etc. leave the country, the art market will, of course, be impacted. However, London still has many assets: a language spoken all over the world, its political stability, its education, its currency, its low corruption level, and so on. It is also likely that New York will use the situation to further increase its dominant position: the US art market is twice as large as the UK's. We'll have to see how the transfer of power goes over there. I also think that Covid-19 has tremendously accelerated the digitization of the art market and that even after this crisis is over, a lot will continue to be done online.

Does the agreement seem balanced to you?
Any deal is better than no deal. That would have been absolutely disastrous. Nobody would have been ready. I think both sides found a last-minute compromise to avoid the worst.

Worth reading
Dark Side of the Boom,
Lund Humphries Publishers Ltd, 2018, 232 pages.

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