Brexit is Official and Here’s How the Art World is Taking It

In 2016, the UK voted to leave the European Union effective Jan. 31, 2020. However, both sides agreed to keep many things the same until Dec. 31, 2020, to allow time for agreements to be made regarding how trade policies would proceed.

Now that we are into February 2021, we are still getting used to how the UK’s decision will affect Europe and the rest of the world.

With the EU being the U.K.’s nearest and biggest trading partner, you can bet that repercussions will be felt in the art world. Here are some things to be aware of.

Will Paris Usurp London for the Art Market Crown?

Over the years, there have been friendly competition between Paris and London in terms of which city holds the art market crown. Paris’s auction house, l’ Hotel Drouot beat Sotheby’s and Christie’s combined year after year in the 1950s. But in 2019, Paris was shown to represent just 7% of the global art market.

Now that Brexit is official, we must wonder if the UK’s 20% share in the 2019 global market, which put it in second place just behind the U.S., will start to decrease. This is a huge possibility as many businesses, buyers and sellers are relocating to the continent.

This opens possibilities for Paris to sweep in and take over.

But the relocation of arts and creators is not the only factor that could tip the scales. With France in and the U.K. out, France is one of the best locations when it comes to bringing in art from non-EU countries. They have one of the lowest VATs on art allowing countries to pay the tax in Paris and ship pieces tariff-free to anywhere in the EU.

France also raised the threshold value on which passports are required for paintings 50 years and older to 300,000 pounds and to 100,000 pounds on sculptures of the same age. This makes it easier for art traders to do business in the country.

Another indication that France might be a strong contender for the crown is its decision to organize a pop-up edition of 1–54, the African art fair which was at the Paris Christie’s. The event wakened rumors that the auction house may be looking at the African art market to boost its sales in Paris.

Experts weigh in saying that while it’s not unlikely that Paris will eventually steal back the art market crown, they have their work cut out for them. London still has many attractions and the fact that it’s an English-speaking city means it may be years until Paris takes over.

Brexit Causes Issues for Shippers

Brexit has also caused initial problems for art shippers sending works into European countries. These include additional costs, administrative issues, and increased ship times.

Gallery owners are stating slowdowns seem to be caused by customs officials who are not yet well trained on new procedures. They are also noting the additional paperwork now required for shipping is leading to additional processing, more red tape, and increased delays due to documents being filled out incorrectly.

Another problem stems from air freight. Gander & White, for instance, were once considered a regulated agent meaning that any works the company ships can be accepted by airlines for secure travel. Now the logistics art company is being told the EU no longer accepts their affiliation and sees it as unknown cargo.

As a result, packages are being screened, x-rayed, and opened by handlers without art experience making damage likely.

Many art dealers are choosing to hold back from shipping art until problems are resolved. Meanwhile, Germany and France are both offering low import rates on collectibles making them an attractive alternative.

Brexit and the Artist Resale Right

The Artist Resale Right was first introduced in 2006 and was created to help struggling artists benefit from the value of their art after they initially sold it by giving them a cut every time the work resold.

But in reality, the ARR resembled more of a business levy earning it the nickname ‘Artist’s Resale Tax’. Here are some factors which makes it unfair:

· It is charged as a percentage of the entire resale price each time the work is resold instead of a percentage of the profits.

· The charges apply to qualifying works even when the works are sold at a loss.

· Since popular art is more likely to sell, it does little to help struggling artists and more to increase the wealth of those who are already successful.

Now that the U.K is out of the picture, it may be easy to get rid of the ARR…but is this a smart move?

The overall outlook makes it clear that the ARR’s image as a law put in place to help out poor artists will make it difficult to get rid of. Furthermore, Brexit’s trade deal upholds the right to enforce it further.

But perhaps the most important factor in the 12,500-pound cap on any single work of art. Raising the cap or doing away with it could potentially wreak havoc on modern art and contemporary art; the U.K.’s most profitable genres.

As a result, the business would shift to the U.S. where the ARR is not in place and neither collecting agencies nor artists would profit.

While there may be changes coming to the ARR, eliminating it is not an option for the foreseeable future.

Conclusion

The U.K left the E.U. due to economic and political issues. But the effects Brexit has on the art world creates a situation where other European countries or the U.S. could potentially take over its foothold on the market.

London and other U.K. cities have their appeal making the country safe for the time being, but who knows what the future may bring? It is hopeful that everything works out for the best so individuals can enjoy fine art wherever they travel to and artists and businesses can thrive.