Latest / Bloomberg Intelligence / Alston & Bird's Shimp on Trade Issues Surrounding Brexit(Audio)

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Alston & Bird's Shimp on Trade Issues Surrounding Brexit(Audio) · Bloomberg Intelligence

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  Speaker 1: Broadcasting live to New York, Bloomberg eleven Brio to Washington,
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  Speaker 1: leave the European Union, but you're not exactly sure if
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  Speaker 1: you're going to be out by the end of the year.
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  Speaker 1: If Conservative Boris Johnson, who pushed for that exit, is
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  Speaker 1: not going to stand to be your next prime minister,
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  Speaker 1: and you perhaps have less idea than ever who that
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  Speaker 1: will be at the Bank of England says it's going
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  Speaker 1: to possibly cut rates, but you don't know that for
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  Speaker 1: sure either. How do you negotiate the rest of the
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  Speaker 1: transatlantic trade and investment partnership between the United States and
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  Speaker 1: the EU. What does the bregit me vote mean for
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  Speaker 1: this very important trade agreement. We're gonna be taking up
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  Speaker 1: the global rally continues this Policymakers signal further steps to
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  Speaker 1: Equities were boosted afterward today that the European Central Bank
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  Speaker 1: the aftermath of the Brexit vote. Just dayly, Chief executive
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  Speaker 1: at Barclays on the impact of Brexit. I think the
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  Speaker 1: crisis we're facing right now is a political crisis. Um.
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  Speaker 1: It clearly will have economic consequences um But right now
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  Speaker 1: we have a political crisis that may lead to economic
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  Speaker 1: challenges facing a banking industry that actually is in very
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  Speaker 1: I'm Jill Schneider and this is Bloomberg. Catherine, thank you.
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  Speaker 1: And now let's get a quick update of the benchmarks.
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  Speaker 1: Down Industrial Average up two hundred fifteen points at seventeen thousand,
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  Speaker 1: This is taking stock with Pim Box and Kathleen Mas
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  Speaker 1: on Bloomberg Radio. Franksit the UK's both leave the European Union.
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  Speaker 1: What doesn't it cast a shadow over? Now we're going
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  Speaker 1: to be taking a look at a trade agreement that
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  Speaker 1: is going to be taken up again in Brussels, the
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  Speaker 1: Transatlantic Trade and Investment Partnership, which is uh certainly instigated
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  Speaker 1: some controversy on both sides of the Atlantic. This deal
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  Speaker 1: is still being hammered out. What does it mean if
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  Speaker 1: the UK is leaving the EU, how will that complicate
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  Speaker 1: this negotiations. Joining US now as Eric Schimp, policy adviser
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  Speaker 1: for the International Trade and Regulatory Group at Alston Bird
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  Speaker 1: Alston and Bird, I should say in Washington, d C.
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  Speaker 1: Home of Bloomberg, Eric, welcome back to the show. Thanks Kathayne.
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  Speaker 1: It's great to be with you today. So first of all, uh, okay,
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  Speaker 1: EU is still going to be intact except for the UK. US.
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  Speaker 1: We're not changing how and whine does Briggs that complicate
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  Speaker 1: this this negotiation over the T T I P. Well,
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  Speaker 1: it's a little bit of a chick in an egg
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  Speaker 1: scenario with the UK's pending departure UH from the European Union.
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  Speaker 1: UH that the the US won't necessarily be able to
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  Speaker 1: accommodate a separate deal for for Britain until it's affected.
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  Speaker 1: It's uh it's departure from the EU. In the meantime,
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  Speaker 1: even this week, EU leaders have driven home the point
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  Speaker 1: that they want to complete this trade deal between the
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  Speaker 1: EU and the United States as soon as possible. Their
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  Speaker 1: their Trade commissioner was recently in town. Um Commissioner Malmstrom.
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  Speaker 1: She said, we won't we know it's ambitious. We want
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  Speaker 1: to finish by the end of the year. Uh. Some
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  Speaker 1: of that is certainly going to be driven politically by
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  Speaker 1: a desire within some European Union capitals to make the
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  Speaker 1: UK understand and realize exactly how painful departure could be. Well,
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  Speaker 1: but for the newtiations, is it not just as simple
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  Speaker 1: as this? Okay, we'll do the t T I P
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  Speaker 1: with the EU minus the UK, and then will we
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  Speaker 1: could we negoti shade a deal with the UK? And
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  Speaker 1: after all, our exports to the UK are what less
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  Speaker 1: than five four and a half percent something like that
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  Speaker 1: of our total exports? Right there? There a fraction. I
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  Speaker 1: think a lot of it though, have to do with
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  Speaker 1: you know, it's hard to have a trade negotiation without
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  Speaker 1: the politics involved. UM, and a lot of the even
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  Speaker 1: being able to negotiate with the U k UM depends
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  Speaker 1: on the deal that the UK strikes itself with the EU. UM.
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  Speaker 1: Will it be part of the single market, in which
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  Speaker 1: case it would have to apply the European unions come
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  Speaker 1: in external tariff for trade with the US? Uh? You know,
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  Speaker 1: will it take a Swiss model where it where it
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  Speaker 1: cobbles together dozens, if not over a hundred, bilateral sectoral
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  Speaker 1: agreements or a customers union like Turkey. Uh, there are
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  Speaker 1: a lot of questions involved. I think clearly you could
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  Speaker 1: you could negotiate t TIP and then pending uh the
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  Speaker 1: UK's departure, which could take two years or more. Uh,
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  Speaker 1: then you figure out the forward for does the UK
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  Speaker 1: have sort of a new accession mechanism to t TIP
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  Speaker 1: or does the terms of its departure essentially rule out
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  Speaker 1: rule out that any anything like that happening? Eric, Is
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  Speaker 1: that what you're starting to say. I believe we may
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  Speaker 1: have just temporarily lost our connection to Eric Shimp from
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  Speaker 1: Alston and Bird in Washington. We're talking to him about
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  Speaker 1: how the brakes at four, the UK getting ready to
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  Speaker 1: leave the European Union, of though it still has to
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  Speaker 1: negotiate that with the EU. How that will complicate things?
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  Speaker 1: You know? Eric, I guess one way we can say
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  Speaker 1: this is certainly complicating, maybe not for the whole country,
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  Speaker 1: but for individual businesses who might be located in the
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  Speaker 1: UK to trade with the EU. Uh. There maybe suddenly
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  Speaker 1: out of luck. I mean, can they the the the
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  Speaker 1: UK is going to have to negotiate its own deal
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  Speaker 1: now the EU on trade. That's that's correct. The EU
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  Speaker 1: has a number of very difficult decisions ahead of it
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  Speaker 1: in terms of the shape of its relationship with the EU. Uh,
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  Speaker 1: the EU is not necessarily going to make that that easy.
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  Speaker 1: You know, continuing to be a member of the Single
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  Speaker 1: Market is going to carry a price for the UK.
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  Speaker 1: If you're a if you're an American investor and you
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  Speaker 1: put a manufacturing plan in the UK because you wanted
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  Speaker 1: to access the EU market, you're looking at losing the
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  Speaker 1: very reason you made that investment. Um and and so
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  Speaker 1: there are certainly need to be plans a foot in
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  Speaker 1: terms of your physical plant, your human resources, your ongoing investment,
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  Speaker 1: your supply chain, and and those are all unknowns until
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  Speaker 1: you understand what it is that the UK is going
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  Speaker 1: to be doing visa the it's former partners in Europe.
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  Speaker 1: So let's say you they said, come on, come on here,
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  Speaker 1: Actually I'm sit down, help us me negotiate this. Let's
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  Speaker 1: say you're in the UK, and what would you be
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  Speaker 1: up against. What would you be trying to convince the
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  Speaker 1: EU to bend on? What does what does the UK
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  Speaker 1: want in terms of trade with the EU? And what
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  Speaker 1: are they likely to get it? Uh, you know, that's
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  Speaker 1: a great question. And I don't think there's a single
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  Speaker 1: member of the UK government that can take you definitively
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  Speaker 1: what their plan is. Uh. They some of them seem
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  Speaker 1: to want to have maintained membership in the Single Market
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  Speaker 1: the way they've they've been doing, but without paying for it.
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  Speaker 1: You leaders have already said no, no, no, you're already
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  Speaker 1: you're going to have to continue to make a financial
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  Speaker 1: contribution if you want it, because Norway and Iceland and
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  Speaker 1: Lichtenstein do on the terms of their their membership in
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  Speaker 1: the Single Market. Plus you have to accept the free
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  Speaker 1: movement of good services, capital, and most troubling for the
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  Speaker 1: UK labor people. Um So politically, the the the UK
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  Speaker 1: really hasn't wrapped its head around what this challenge looks like.
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  Speaker 1: Eric sim thank you so much for joining us. A
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  Speaker 1: lot of questions, not a lot of answers yet, but
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  Speaker 1: certainly we have a better understanding of the complexity of
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  Speaker 1: what this Brexit will mean as the UK divorces itself
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  Speaker 1: from the European Union, can what kind of relations can
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  Speaker 1: it maintain on trade? This is taking stock and this
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  Speaker 1: is Bloomberg. We're going to be looking next at China.
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  Speaker 1: China has made some signs that it might be weakening
• 11:08
  Speaker 1: its currency these traders have been talking about that what
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  Speaker 1: does that mean for the markets that's coming up, And
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  Speaker 1: this is Bloomberg