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June 24 — The economic and strategic rationale for a trans-Atlantic trade deal with the European Union remains strong, U.S. Trade Representative Michael Froman said June 24 after the U.K.'s vote to leave the EU.
The U.S. is negotiating the Transatlantic Trade and Investment Partnership (TTIP) with the EU. The U.K.'s Brexit vote has injected another element of uncertainty in the negotiations, which were already facing entrenched disagreements in many areas.
The U.S. is evaluating the impact of the Brexit vote on TTIP and “looks forward to continuing our engagement with the European Union and our relations with the United Kingdom,” Froman said in an e-mailed statement.
The referendum will usher in a long process in the EU to negotiate the terms of the U.K.'s departure. However, that process is not expected to start until Prime Minister David Cameron steps down in October.
The U.S. should treat the U.K. Brexit vote “as an opportunity to forge a closer partnership with our historic friend and ally, including immediately starting negotiations for a targeted U.S.-U.K. free trade agreement,” Sen. Ted Cruz (R-Texas) said in an e-mailed statement. Cruz said the vote should be “wake-up call for internationalist bureaucrats from Brussels to Washington, D.C. that some free nations still wish to preserve their national sovereignty.”
Separately, U.K. analyst Jan Gerhard of IHS Country Risk said the U.K.'s decision to leave the EU “significantly increases the risk of a constitutional crisis.” He said the Scottish National Party is likely to seek another independence vote during the U.K. government's post-2020 mandate, “significantly raising the risk that the U.K. will break up.”
Similarly, House Ways and Means Committee Chairman Kevin Brady (R-Texas) said the U.S. should “begin to discuss a modern, new trade agreement with the U.K.” that expands the trade between the two nations. Brady said he is also committed to a “strong and ambitious TTIP agreement.”
Senate Foreign Relations Chairman Bob Corker (R-Tenn.) said the vote will not change the U.S.'s special relationship with the U.K. “That close partnership will endure, and we will continue to work together to strengthen a robust trade relationship,” he said.
In Canada, Canada International Trade Minister Chrystia Freeland said she spoke to European Trade Commissioner Cecilia Malmstroem June 24 reiterating Canada's commitment to its trade pact with the EU after the Brexit vote. “We remain committed to growing global trade that is good for Canada's economy, good for the environment, good for labor, and good for people,” Freeland said.
Tim Bennett, director-general of the Transatlantic Business Dialogue, said the Brexit outcome “reinforces the geopolitical imperative for completing the TTIP text this year.” The U.S. 2016 presidential election followed by major elections in the Netherlands, France, and Germany next year will foster further political and economic uncertainty in the face of an already occurring global economic slowdown, he said.
“Completion of the TTIP text this year would demonstrate that the EU and U.S. remain committed to working together to better position their economies in a globalized world from which countries cannot retreat,” Bennett told Bloomberg BNA in an e-mail.
“Brexit probably removes the U.K. from the ongoing TTIP negotiations and any potential agreement,” Tim Brightbill, a partner at Wiley Rein LLP in Washington, told Bloomberg BNA in an e-mail. “Those negotiations are moving slowly anyway, so that’s not a huge loss.”
“The United States will want to do everything it can to secure its very strong trade relationship with the U.K.,” he said. “So if that means new trade and investment agreements, I think the U.K. can and should go to the front of the line with the United States,” Brightbill said.
During exit negotiations, European Union treaties and law would continue to apply to the U.K.
With assistance from Josh Wingrove, Kim Chipman and Bryce Baschuk.
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Ambassador Froman's statement is available at https://ustr.gov/about-us/policy-offices/press-office/press-releases/2016/june/Statement-Ambassador-Froman-UK-Referendum.
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