A dog in a bag bearing a British flag, at Syntagma Square in central Athens, Wednesday, March 29, 2017. Britain will begin divorce proceedings from the European Union later on March 29, starting the clock on two years of intense political and economic negotiations that will fundamentally change both the nation and its European neighbors. AP Photo/Petros Karadjias
Johannesburg - South African companies with exposure to the British pound were warned of negative consequences as the UK on Wednesday finally triggered its formal withdrawal from the EU.

Gavin Williams, a partner at international law firm Herbert Smith Freehills, warned that the UK’s withdrawal from the EU, known as Brexit, had implications for emerging markets such as South Africa and a number of other African countries with strong trade links with the EU, said Williams.

A “hard” Brexit would require trade negotiations with the different countries.

But he said the negotiation of the trade negotiations would take long as the UK would have to negotiate with a number of countries.

“Trade agreements take many years to negotiate. It is going to be an uphill battle,” said Williams.

He said the uncertainty about the two-year negotiations, which will follow UK’s Brexit notification letter would have a negative impact on the value of the pound.

The letter, which UK Prime Minister Theresa May signed on Tuesday, signals the beginning of two years of what Williams said would be complex negotiations for Britain to withdraw from the EU.

It follows a vote in favour of Brexit in June last year.

He said that the the pound was likely to lose more value against the US dollar during the course of the two-year negotiations.

He said the complexity of the negotiations had implications for a number of South African companies and individuals, who hold assets which are denominated in sterling or are physically based in the UK.

He said such entities ran the risk of losing the value of their assets.

“But it makes the UK a cheap place to buy. It depends on your perspective,” he said.

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Investment company Brait last week announced that it had suspended plans to list on the London Stock Exchange, over concerns about UK’s decision to leave the EU.

The company, part-owned by South African billionaire Christo Wiese, is the majority owner of gym chain, Virgin Active.

Williams said the two-year negotiation would be complex because the initial positions of the UK and EU representatives appeared far apart at the moment, “with a lot of posturing and hard line stances.”

He said EU politicians were keen to preserve the integrity of the political and economic union. “If it looks like both sides are digging in their heels, the markets will react to that,” he said.

But he said there was every chance that the tone of the negotiations might change in the coming two years.

He said the posturing and rhetoric would, over time, give way to clear signals of the course of the discussions.

He said that with goodwill on both sides, two years could culminate in a clear understanding between the EU and UK on the nature of their future relationship, but longer time will be needed to settle the details.

He said the two years would culminate in a clear understanding between the EU and UK on the nature of their relationship.

He said that as a result of Brexit, UK would not continue to enjoy certain benefits of being a member of the union.

On the other hand, some members would like to enjoy greater access to the UK.

London is considered Europe’s financial capital.