The implications of brexit on Transatlantic trade
Brexit and the election of Donald Trump as US President have triggered considerable uncertainty about the future of trade between the EU, the UK and the US. What has traditionally been a bi-lateral trading picture will become a three sided relationship; a 'Transatlantic Triangle'.
This Gowling WLG report aims to cut through that uncertainty by investigating what the US, one of the UK's biggest trading partners, wants out of a Brexit deal to keep trade flowing and provide practical advice on what businesses can be doing now to best prepare for several years of change and uncertainty. It will:
- Lift the lid on the implications of Brexit on transatlantic trade
- Provide a detailed guide into which Brexit models are the most likely, why and what that means for transatlantic trade
- Provide six key actions that businesses need to consider now in preparation for the Brexit
The Transatlantic triangle of uncertainty
With the UK's vote to leave the EU, what has traditionally been a bi-lateral trading picture - between the US on the one hand and the EU (including the UK) on the other - will become a three-sided relationship; a 'Transatlantic Triangle'.
US - EU trade
US businesses say they currently face non-tariff barriers when trading into the EU. Transatlantic Trade and Investment Partnership (TTIP) is intended both to lower tariffs and reduce regulatory barriers that make trade between the US and the EU difficult or more costly. But indications are that TTIP is not going to progress in the short term, if ever. What impact will the possible demise of TTIP have on transatlantic trade and what are the barriers to trade that US businesses fear the most?
US - UK trade
Many US businesses with a base in the UK say they are considering moving it to elsewhere in the EU because of Brexit. And, as our research shows, many US businesses that export to the EU also claim that Brexit means they are now more likely to bypass the UK. Will the UK domestic market alone be sufficiently attractive to retain the current level of trading links between the US and the UK post-Brexit? Will the possible collapse of TTIP present an opportunity for the US and the UK to conclude a strong bi-lateral agreement? And what type of trade agreement is most attractive to US business?
UK - EU trade
Once it leaves the EU, the UK will still retain access to the EU's Single Market in the same way as every other country in the world. What it will seek to negotiate is the particular terms of that access. But the types of soft exit preferred by US businesses are very unlikely. So which models are most likely given the current direction of travel? And what would each of these models mean for transatlantic trade and the Transatlantic Triangle?
A word from the experts
Partner in our Commercial team, David's knowledge of international trade and the supply of goods and services is second to none. He has written articles exploring the potential impact of Brexit on the food and drink sector and regularly advises on the important next steps GCs should take in light of the Brexit vote.
Partner Bernardine Adkins is head of the firm's EU, Trade & Competition team. Bernardine has collated various articles exploring the impact of Brexit not only on Britain, but also the rest of Europe. With a wealth of over 25 years' experience in providing key strategic advice to clients, Bernardine is perfectly placed to advise on all aspects of EU, trade and competition law in light of the Brexit vote.
Kieran Laird is a key member of our public sector team who has been researching, analysing and commenting on the various developments in the Brexit debate since autumn 2015. He has collated various alerts and is available to offer advice on the changes of the UK legal framework as Britain's departure from Europe unfolds.