U.S. Exporters and Brexit
It will be years, not months, before the full impact of the UK’s decision to leave the European Union can be put into a proper perspective.
But that hasn’t stopped anyone from trying to figure out what’s going to happen next.
Many in the media have deemed the decision unimaginable and foolish, while supporters are hoping the day of the vote will become a bank holiday in Britain, to celebrate the nation’s independence from an elitist Brussels bureaucracy.
Much of the speculation over what happens next is focused on global trade, as previous free trade agreements are rendered null and void, and President Obama has declared that the country with whom the U.S. has always enjoyed a special relationship now needs to head to the back of the queue.
While a portion of the angrier post-mortem coverage has centered on immigration, there is certainly ample evidence to suggest that Britain’s exit was more a referendum on EU trade policies, which require approval and ratification by all member states, and thus often progress at the speed of continental drift. The hope is that now, an independent UK can pursue bilateral deals with such major markets as the U.S., China and Japan.
U.S. Exporters: Business as Usual?
Despite the Obama administration’s initial condemnation of the Brexit move, a position that has already softened after the vote, there is an opportunity in the wake of their departure to strengthen trade ties with Britain. That is, once U.S. exporters get past the paperwork.
The standards and regulations that govern EU are no longer applicable to Britain, the destination of just over 20 percent of America’s EU trade. That means new rules that the country has not even begun to start replacing. How will that disruption impact current trade partners such as Boeing and Caterpillar?
Publicly, Boeing is taking the developments in stride. “As a global business, we constantly manage changes in political circumstances and we will continue to do so now with the evolving situation in the U.K. and Europe,” the company said in a statement.
But other companies, such as one medical equipment exporter, expressed more concern: “Our industry is screaming for harmonization, and instead we’re getting more and more disharmony,” said a representative of BTE Technologies, Inc.
Where some industries see complications, others, such as technology, see untapped potential. EU’s strict privacy policies will no longer apply in the U.K. making that market more desirable for Google, Facebook and Apple.
Though a spurned EU is trying to show Britain the door as quickly as possible, negotiations for exiting the treaty will take a minimum of two years, and may drag on for five years or more, according to an International Air Transport Association report.
In the meantime, more opinions will be expressed, of rosy futures or doom and gloom. But one way or another, business goes on.