29 October, AtoZForex.com, Lagos – As talks of a potential Brexit grows louder, UK’s foremost trade partners, the United States does not seem keen on creating a segregated free trade deal with the nation if it leaves the European union. This was clarified by US trade representative Michael Froman, which represents the first public comment from a senior US official on the matter.
His comments come ahead of the decision from British voters, due to decide in polls before the end of 2017 whether their country maintain its EU membership, as opinion polls show rising support for leaving the bloc.
Michael Froman on Brexit
The US official’s comments undermine a key economic argument being made by supporters of a Brexit. They claim the UK can foster on its own, and would be able to seal bilateral free trade agreements (FTAs) with trading partners. Mr. Froman’s statement is therefore a hit to Britain’s push as the United States is Britain’s biggest export market after the EU, purchasing over $54 billion in goods from the United Kingdom in 2014.
“I think it’s absolutely clear that Britain has a greater voice at the trade table being part of the EU, being part of a larger economic entity,” Mr Froman told Reuters in an interview, adding that EU membership gives Britain more leverage in negotiations.
“We’re not particularly in the market for FTAs with individual countries. We’re building platforms … that other countries can join over time.”
An exit from the EU would mean higher tariffs for the country’s products as it would face the same tariffs and trade barriers as other countries outside the US free trade network.
“We have no FTA with the UK so they would be subject to the same tariffs – and other trade-related measures – as China, or Brazil or India,” he said.
Higher tariffs for UK?
In terms of vehicle exports, the US is also UK’s second-largest export market. Another direct obvious Brexit impact on US trade consequence of a European union exit is the fact that British cars exported to the United States, like Jaguar Land Rover brands, would face a 2.5 per cent tariff and could be at a disadvantage to German and Italian-made competitors, amongst other things.
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