Archive for Friday, June 24, 2016

KU international trade law expert reacts to Brexit, says U.S. should prioritize trade agreement with Britain

We should embrace the UK and welcome them in”

June 24, 2016


Brexit’s effects on trade will be felt by locales worldwide, and it may surprise some that even includes Kansas, says an international trade law expert from Kansas University.

Raj Bhala is associate dean for international and comparative law and Rice Distinguished Professor at the KU School of Law. He shared thoughts Friday on Britain’s 52 percent to 48 percent vote to exit the European Union, which stunned many worldwide after Thursday’s public referendum was tallied.

Businesses in Kansas dealing in everything from wheat to beef to GPS technology to aerospace equipment have been accustomed to being able to sell in all 28 EU countries under one set of trade rules, Bhala said. Now if they want to keep selling in Britain, they’ll have to follow two sets of rules.

Bhala said such trade rules can be complex, including different regulations for everything from technological specifications for GPS equipment to hormone rules about beef.

Raj Bhala

Raj Bhala

Britain accounts for one-sixth of the EU’s economy, and it’s a natural place for businesses to expand, Bhala said. But businesses with offices in London as an entry point into the EU market won’t be able to use them in that way anymore.

“If you’re a business in Kansas and you’re thinking about going global, one of the first natural moves would be the EU,” Bhala said. “Even ones that don’t have large exposures now, it’s generally an area into which they would want to grow.”

Bhala disagrees with President Barack Obama’s pre-vote statement on Brexit, which he summarized as pushing forward with current Transatlantic Trade and Investment Partnership negotiations with the EU and putting Britain at the back of the line.

“The U.S. should more rapidly offer a free trade agreement to the UK on the same terms that we have negotiated with our Asian allies in the Trans-Pacific Partnership,” Bhala said. “We should embrace the UK and welcome them in. ... I would prioritize them.”

Not only does the UK account for a proportionately large part of the EU economy, Britain has been America’s “closest friend and ally,” militarily and otherwise, Bhala said.

Offering the UK a free trade agreement may help stave off other countries from exiting the EU, Bhala said.

“I don’t see it as in America’s interest for the UK to break up, so if we could help them stay together under some kind of free trade agreement, that’s a good thing,” he said.

Bhala said he was not surprised by Brexit referendum results.

“First because the polls have often been wrong in the past in the United Kingdom, and second because in the UK and in many countries — from the United States to India to the UK — there’s such a strong anti-establishment movement,” he said.

Bhala, who teaches international trade law among other classes at KU, said he’s been watching developments since the referendum was called three years ago.

“It became pretty clear that the political establishment in the UK had really not made a clear case to the people in England,” Bhala said. “They endure a great amount of regulations and do’s and don’ts from Brussels, and many of those are well-intentioned, but these people in the Midlands and the North, they wonder what benefit the EU has for them.”

Contact KU and higher ed reporter Sara Shepherd
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Richard Heckler 1 year, 11 months ago

Britain just killed globalization as we know it - Good Bye TPP

The economic story of the past quarter century was the rapid advance of globalization, the unleashing of trade and commerce among countries rich and poor -- a McDonald's in every European capital, "Made in China" labels throughout Toys R Us. The Brexit vote on Thursday ends that story, at least in its current volume.

Voters will soon tell us what sort of sequel they'd prefer.

Even before the burst in anti-globalization sentiment, a slowdown in trade growth had already gripped the globe over the past several years, according to data from the World Trade Organization. Prospects now look bleak for completion of major new trade agreements, including the Trans-Pacific Partnership and a new accord between the United States and the European Union, no matter who wins the U.S. presidential election in November.

Political factions in other European countries are now clamoring to follow Britain out the door of the European Union. Republican presidential candidate Donald Trump is promising to levy the highest set of tariffs in the last century for America, against China, Mexico and other key trading partners. His presumptive Democratic opponent, Hillary Clinton, has vowed to renegotiate existing deals such as the North American Free Trade Agreement.

These developments come at the hands of an anxious working class across the West, whose members feel left in the cold by many developments of the rapid integration of foreign products and people into their lives.

It is clear from the results of the British vote, and from Trump's rise in American politics, that there is a large backlash against the results of globalization so far. Native-born workers without college degrees are venting their frustrations with immigrants, with factory jobs outsourced abroad and with a growing sense of political helplessness -- the idea that their leaders no longer respond to concerns of people like them.

University-educated voters in Britain overwhelmingly sided with the "remain" campaign in Thursday's vote; those without college degrees powered the victory for "leave." The top issue among those voting to go was Britain's right to act independently. The second highest was immigration.

In America, throughout the Republican primary and into the general election campaign, white voters without college degrees have formed the core of Trump's support, and polls show they, too, are frustrated with immigration and economic integration (in the form of free trade).

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Bob Summers 1 year, 11 months ago

You peeps with the Liberal condition do band together.

In America, throughout the Republican primary and into the general election campaign, white voters without college degrees

Clara Westphal 1 year, 11 months ago

I need to go shopping at Brit's on Mass St.

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