What does Brexit mean for the US?


iStock/Vladislav Zolotov(LONDON) — British Prime Minister Boris Johnson said in September he’d “rather be dead in a ditch” than have the United Kingdom leave the European Union later than Oct. 31.Instead, the U.K. will hold an early general election on Dec. 12 with the set date of its EU withdrawal extended to Jan. 31, 2020.With nearly daily twists and turns in the U.K.’s ongoing Brexit saga, the impending departure from the EU likely will have a global impact, both economically and geopolitically. Amid all of this, the United States regularly has been touted as a key ally of a post-Brexit U.K.‘Magnificent’ trade deal?With its current EU trading relationship set to fundamentally change, the U.K. may look across the Atlantic for a post-Brexit trade deal with the U.S.Both Johnson and President Donald Trump have mentioned their desire to negotiate an agreement, with the American leader promising a “magnificent” deal at a meeting in New York during the United Nations General Assembly in September.Supporters of a deal have said an agreement could boost the $260 billion trading relationship between the countries, increasing the exchange of financial services, biotechnology, automobiles and other professional services.”The EU’s heavy regulatory hand has stifled Britain’s economy and hampered trade with the United States and the U.K.,” Rep. George Holding, R-N.C., a chair of the House U.K. Caucus, wrote in a recent column for CNN, “but that could soon change.”Despite trade deal supporters identifying several key areas of possible increased cooperation, the agreement could meet opposition in both nations.”The Trump Administration undoubtedly hopes the U.K. will be willing to deviate from its current alignment with the EU on numerous regulatory issues,” Amanda Sloat, a Robert Bosch senior fellow at the Center on the United States and Europe at Brookings, told ABC News. “However, it is unclear how many concessions the U.K. will be prepared to make — especially in domestically sensitive areas like agriculture and health.”After Trump told reporters in June that the U.K.’s National Health Service, which is state owned and free at the point of entry, could be “on the table” in a future trade deal, Johnson has frequently stated it’s not. The NHS is an institution fiercely defended in the U.K., but not everyone believes the prime minister.”I don’t believe anything that Boris Johnson says. He’s like [Trump] — he is a proven liar,” Barry Sheerman, a U.K. Labour member of parliament, told ABC News. “Look, post-Brexit, we are going to be like a beggar coming to the doors of America saying, ‘Please, please. We used to have a special relationship. Please help us.’ That isn’t a good way to get a good trade deal. Especially with someone like Trump who is going to squeeze Britain for everything he can.”Prospects of a deal hit a road bump Thursday after Trump said in an LBC interview with Brexit Party Leader Nigel Farage that the while the U.S. wants a U.K. trade deal, Johnson’s negotiated withdrawal agreement with the EU makes the outlook a bit less likely.”We want to do trade with the U.K., and they want to do trade with us,” Trump said. “And to be honest with you, this deal, under certain aspects of the deal, you can’t do it.”However, with a U.S.-U.K. trade deal could boost trade “four to five times higher than it is right now,” Trump added.‘Not much to lose’Some economists have said such a deal may not have much of an economic impact on the U.S.Michael Pearce, a senior economist at Capital Economics, believes the U.S. would gain very little.”The more economically meaningful measures,” he told ABC News, “would be kind of more regulatory alignment around some of these more strategic sectors perhaps — you know, thinking about biotechnology and pharmaceutical regulation, things like that. But progress on anything like that would be a long way in the future. I think in the near term, it is pretty small, I’m afraid.”He argued the U.S. does not have “much to lose” from any type of Brexit because “direct trade links are really pretty small.” U.S. exports to the U.K. represent less than 1% of the larger country’s $20 trillion economy, he added.Even if the U.K. left the EU without a deal, the so-called no-deal Brexit that many critics fear will devastate the U.K. economy, Pearce said a major disruption in American financial markets in unlikely.”Markets are pretty well braced for this outcome of a no-deal,” he said. “Yes, obviously, it would be a negative for the markets, but I don’t think one expects it to be to have a long, persistent impact on financial markets.”Study abroadWith almost 40,000 Americans studying in the U.K., NAFSA CEO and Executive Director Esther Brimmer said Brexit has “not yet made it less attractive for American students” to come to British universities. “The United Kingdom remains the top destination for U.S. study abroad students.”Unless provided for in a Brexit withdrawal agreement, the 130,000 Europeans studying at U.K. institutions, however, could lose access to reduced British tuition rates.If the number of EU students decreased, Brimmer said, American students looking to study abroad could gain an advantage.”Then universities might be eagerly looking for additional students from other parts of the world,” she said. “They might be, again, pretty interested in having Americans come.”‘Untrustworthy ally’Despite the close relationship between Johnson and Trump, a major impediment to any post-Brexit relationship between the U.S. and U.K. could be a lack of trust on both sides.”Do you think Donald Trump would come to our aid? You’re joking. He sold the Kurds down the river. People who died for him. Died for us,” Sheerman said. “He has now shown he’s an untrustworthy ally.”The Labour politician also referenced comments from Speaker Nancy Pelosi, a warning that the House of Representatives would block any trade agreement with the U.K. if its withdrawal from the E.U. threatens peace in Northern Ireland.”If Brexit undermines the Good Friday accord, there will be no chance of a U.S.-U.K. trade agreement passing the Congress,” Pelosi said in a statement in August.While Johnson and Trump have talked up the importance of the U.K.-U.S. relationship, a change of prime minister could change the equation dramatically. Jeremy Corbyn, the socialist leader of the Labour Party running against Johnson in the upcoming election, does not have a friendly relationship with Trump. Corbyn, a lifelong socialist, has come head-to-head with the president’s administration several times in the last few years.In February, U.S. Secretary of State Mike Pompeo called comments by the Labour leader “disgusting” after Corbyn criticized “outside forces” trying to bring down Nicolas Maduro’s Venezuelan regime. In turn, the opposition leader refused to meet with Trump when he visited London.On Thursday, in the radio interview with Farage, Trump said Corbyn “would be so bad for [the United Kingdom], he’d take you into such bad places.”‘Up in the air’With an upcoming general election and another extended Brexit deadline, much remains uncertain about U.S.-U.K. ties. Much could depend on the deal the U.K. and EU reach.”It’s so much up in the air,” Sheerman said.While Sloat said the personal relationship between Johnson and Trump may provide “political momentum” for a future trade deal, “the devil remains in the details, as both sides will seek to maximize their national economic interests.” Copyright © 2019, ABC Audio. All rights reserved.