U.S. President Barack Obama says a “Brexit” would put the U.K. at the “back of the queue” in trade talks with the U.S. The Republican presumptive nominee, Donald Trump said it won’t, if he’s elected president.
That’s the confusing position for the U.K. if it votes to leave the E.U. on June 23rd.
Clarity is crucial for U.S importers of British goods, who could find themselves at a competitive disadvantage if Britain leaves the E.U..
CCTV America’s Owen Fairclough explains.
Brexit vote leaves uncertain future for US-UK tradeU.S. President Barack Obama says a “Brexit” would put the U.K. at the “back of the queue” in trade talks with the U.S. The Republican presumptive nominee, Donald Trump said it won’t, if he’s elected president.
Morgan cars are individually handcrafted in rural England and sold all over the world, including rural Pennsylvania. U.K. manufacturers like Morgan are asking themselves if business as usual will resume after this historic referendum.
It costs around $50,000 to buy a Morgan 3-Wheeler. On top of that, one needs to pay around 2.5 percent import charges. Under the terms of a proposed transatlantic trade deal, those import charges would be all but eliminated for European countries. But if the U.K. leaves the European Union, it won’t benefit from that deal.
A thousand dollars isn’t much for the wealthy clients Morgans are built for. But with $57 billion of British goods exported to the U.S. last year, those import charges would leave the U.K. at a competitive disadvantage against European rivals.
And U.S. is in no hurry to strike an independent free trade deal with a Britain outside the EU.
“Maybe, some point down the line, there might be a UK – U.S. trade agreement, but it’s not going to happen anytime soon because our focus is negotiating with a big bloc, the European Union, to get a trade agreement done, and the U.K. is going to be in the back of the queue,” President Obama said.
The British pound has been sinking against the dollar over the prospect of a Brexit, which makes the U.K.’s short term future even more uncertain. Though, the current exchange rate is beneficial to this dealership.
Ultimately, the future of the U.S.- U.K. trade relationship is as open to debate as the outcome of the referendum.
Republican presumptive nominee Donald Trump says if he wins the White House in November, the U.K. leaving the EU won’t be an obstacle to a bilateral trade deal.
Without a President Trump, a Brexit could leave the U.K. at the ‘back of the queue’ with not one but two of the world’s largest markets-the U.S. and the EU.
Brian Beary on the outlook for U.K. trade
To take a further look at the impact of the vote on trade negotiations, CCTV’s Jessica Stone spoke with Brian Beary, an EU expert and contributing editor to European Affairs.