Prior to Thursday, June 23rd, the average American was unfamiliar with the term “Brexit”. The clever mash up of “British” and “exit” seemingly appeared overnight after the UK voted to withdraw from the European Union (EU) and prevailed with a 52.5% majority. The days following the referendum have been fraught with uncertainty and fear. Will Brexit’s impact on the geopolitics of Europe affect US trade policy in the region?
It is anticipated to take up to two years before the UK transition out of the EU is complete. Meanwhile, here at home Senators Mike Lee (R-UT) and Tom Cotton (R-AR) introduced a bill to the Senate on June 30th that, if passed, will help to ensure that Brexit has a minimal effect on US trade with the UK. The Senators echo Brexiteer’s hopes that major global economies will race to secure bi-lateral trade agreements with the newly independent UK.
“Our nation’s special relationship with the United Kingdom has promoted economic prosperity and security in both countries for over a hundred years,” Senators Lee said. “This relationship can and should be preserved,” Lee continued, “which is why we have introduced legislation that would minimize uncertainty and promote stability as the United Kingdom declares their independence from the European Union.”
“The United Kingdom has stood with us at the front lines of battle, and it should therefore be at the front of the line for a free trade agreement that benefits both our nations,” Sen. Cotton said. “At this time of transition for our ancestral ally, it is in our deepest interest to reaffirm the Special Relationship. And it is my hope that our other European allies will also move in the spirit of magnanimity, generosity, and continued friendship as they negotiate new partnerships with the United Kingdom.”
With US exports to the UK totaling approximately $56,114,600,000 in 2015 and imports to the US totaling approximately $57,962,300,000 it is likely that we may see more legislation such as the United Kingdom Trade Continuity Act. Here’s a closer look at this piece of legislation:
“no later than 30 days after the date of the enactment of this Act, the President should initiate negotiations with the United Kingdom with the goal of reaching a final comprehensive bilateral trade agreement by the date that is one year after such date of enactment”
“The United States shall continue to comply with the terms of all commercial agreements between the United States and the European Union that govern commerce between the United States and the United Kingdom as of the date of the enactment of this Act to the same extent as if the United Kingdom were still a member of the European Union, unless such an agreement specifically provides otherwise, until a new comprehensive agreement between the United States and the United Kingdom is negotiated and enters into force”
While the complexities of the current domestic political environment for trade policy exceed the reach of our blog post, it is safe to suggest that as well intentioned as the legislation may be it won’t attract attention until well after this election year has passed. For now, normal trade relations prevail amidst the economic uncertainty on both sides of the pond.
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