THE TTALK QUOTES 

On Global Trade & Investment

 

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No. 10 of  2016

TUESDAY, MARCH 1, 2016

Filed from Portland, Oregon

This publications took a bit of a break these past two weeks.  Apologies. That's over.
BREXIT AND THE OPPRESSIVE POWER

"We had a conference call the other day among our global services coalition, and the fellow from the UK was telling us about the pros and cons of getting out of the EU. And he said, of course, the pro people are saying that the big pro was that they would be more agile and free from this oppressive power."

Peter Allgeier
February 24, 2016

CONTEXT
We shouldn't leave the quote there.  We need to continue with Mr. Allgeier's response:

"I said, 'Well, yes, we had that experience about 200 years ago, and it proved to be [quite beneficial.]'"

Those last two words are in brackets because they are a guess.  On the recording that was the source for this quote laughter drowns out the end of Mr. Allgeier' s sentence.

Context.  Today, Peter Allgeier is enjoying his first day of retirement. Last Wednesday, however, this former U.S. Ambassador to the WTO was still in his job as president of the Coalition of Service Industries.  In that role, he was one of two featured speakers at the February 24 GBD event, "Breakfast of Champions II."  The other was William Reinsch, president of the National Foreign Trade Council.  Mr. Allgeier had a lot to say about services and trade, and we shall highlight some of that in a later entry.

Today's quote was taken from his response to the very last question of the morning.  In short, Mr. Allgeier and Mr. Reinsch - both experts in U.S. trade policy - were asked if there were any external events on the horizon that might affect U.S. trade.  The questioner suggested as possible candidates the Canada-EU trade agreement, known as CETA; the China-led negotiations in Asia for a Regional Comprehensive Economic Partnership or RCEP; and Brexit, the upcoming referendum in the United Kingdom on that country's membership in the European Union.  Our experts talked about both Brexit and RCEP, though here we shall stick to the Brexit comments.

The context for the issue is that on June 23 of this year, a little more than three months from now, British voters will go to the polls and give their individual answers to this question:

"Should the United Kingdom remain a member of the European Union or Leave the European Union?"

Lady or the tiger, each voter will decide either:

a)    "Remain a member of the European Union" or

b)    "Leave the European Union."

Here is a bit more of what Mr. Allgeier and Mr. Reinsch had to say about Brexit.

MR. ALLGEIER: "I think the Brexit -- potential Brexit [vote] -- is probably the most impending issue.  And if that goes the way of Britain leaving the EU, that would require a huge adjustment. I assume that there would be support in the United States to find some way of applying what we have with Europe to Britain, but I don't know how the British feel about that.  They would have some other changes that they would want."

MR. REINSCH: "I haven't thought enough about the British thing yet and need to [consider it] more.  One of the issues that will no doubt be coming up in the next month or so is, what is the U.S. Government's attitude toward it?  And there is quite a bit that we could say or do that would have an impact on that, I would think. I mean the assumption of the people that want to leave the EU, I assume, is, has to be, that they're not going to be worse off for having left.  And whether they are going to be better or worse off in trade terms will depend a little bit on what their trade relationship with us would be in post-EU circumstances.  Would all the benefits that they currently have continue to exist?  I think the answer to that is, it depends a lot on what the U.S. government has to say.

"You know, we could probably influence this debate one way or the other or choose not to influence it at all.  And I don't know what the right thing for us to do is at this point."

COMMENT
The Brexit vote is indeed an impending issue of tremendous importance, and it is one the Global Business Dialogue - and these pages - will have more to say about in the weeks ahead.  Here we shall content ourselves with just two observations.

The first is that, though The Economist has disparagingly referred to the words "ever closer union" as "junk DNA" in the EU genome, they are words that are likely to get more, rather than less, prominence in the weeks ahead.  The phrase is part of a non-binding pledge in the Treaty of Rome, but it has political significance, and Prime Minister David Cameron takes some pride in having gotten his EU colleagues to agree to a British carve out with respect to that pledge.   As one British opponent of the pledge has explained: "The logical end point of ever closer union is union, and I do not want to lose our status as a sovereign independent nation."  That is from Liam Fox, a former UK Secretary of State for Defence.

The second observation has to do with the attitude of the U.S. Government toward the pending Brexit vote.  True, there have not been a lot of comments on the issue from U.S. officials, but there have been enough to make clear the Obama Administration's preference for a European Union that includes the United Kingdom.
Brexit was one of the issues taken up by the G20 finance ministers and central bankers during their meeting last week in Shanghai.  U.S. Treasury Secretary Jacob Lew was there and spoke about the issue forcefully.  "We see a stronger UK, a stronger EU, a stronger global economy and a more secure world with the UK in the EU," he said. 

But again, it is the voters of the United Kingdom who will have the last word.

***

On the subject of the UK, each of the four countries in that land has its own patron saint: St. George for England, St. Andrew for Scotland, St. Patrick for Northern Ireland - we assume his remit includes Northern Ireland - and St. David for Wales.  This is the feast day for the Patron Saint of Wales.


Happy St. David's Day!


3D Flag of the Wales. Close Up.


 
SOURCES & LINKS
Breakfast of Champions II takes you to the audio recording from this February 24 GBD event.  This was the source for today's featured quote and indeed for al of the quotes from Mr. Allgeier and Mr. Reinsch.

Ever Closer Overtaken is a link to The Economist article that talks about the significance of the Treaty of Rome's language on an "ever closer union" in today's environment.

G20 Warns on Brexit is an article from the Financial Times on this issues, which includes the quote from U.S. Treasury Secretary Jacob Lew.

Over 3 Words is a New York Times article of last June that focuses on the significance of the three words "ever closer union."

 

 

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