Alston & Bird's Shimp on Trade Issues Surrounding Brexit(Audio)

If Conservative Boris Johnson, who pushed for that exit, is not going to stand to be your next prime minister, and you perhaps have less idea than ever who that will be at the Bank of England says it's going to possibly cut rates, but you don't know that for sure either. How do you negotiate the rest of the transatlantic trade and investment partnership between the United States and the EU. What does the bregit me vote mean for this very important trade agreement. We're gonna be taking up

that question on Bloomberg Radio. Now we're going to Katherine Carterie. She's in the newsroom with a Bloomberg Business Flash. Thank you, Kathleen and Bloomberg. Taking stock is brought to you by National Realty Providers of Satisfaction Guaranteed New York City Realty Investments. See them at n r I a dot net. Well the global rally continues this Policymakers signal further steps to buffer the impact of Britain's decision to leave the European Union.

Equities were boosted afterward today that the European Central Bank is considering loosening the loosening the rules for its bond purchases to ensure enough debt is available to buy in the aftermath of the Brexit vote. Just dayly, Chief executive at Barclays on the impact of Brexit. I think the

crisis we're facing right now is a political crisis. Um. It clearly will have economic consequences um But right now we have a political crisis that may lead to economic challenges facing a banking industry that actually is in very strong shape, particularly UH in the UK. We check the markets every fifteen minutes throughout the trading day on Bloomberg Radio.

Down industrial leverage of two hundred twelve points one two percent trading at seventeen thousand, nine hundred seven smp F I founded up twenty five points one point two percent, trading at two thousand nine Nazac Hire by fifty six points one point two percent, trading at forty eight thirty

five less. Texas Intermedia crude oil down a dollar thirty eight of barrel two point eight percent to forty eight fifty speckled down two dollars eighty cents anounced at ten year treasury up ten thirty seconds, with the yield of one point for eight percent. Among today's top business stories, Hershey has nubbed a preliminary takeover offer for Mondaleze International for one hundred seven dollars to share in cash and stock. And now let's get an update of some of the

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in more than one hundred twenty countries. From the Bloomberg Newsroom. I'm Jill Schneider and this is Bloomberg. Catherine, thank you. And now let's get a quick update of the benchmarks. Down Industrial Average up two hundred fifteen points at seventeen thousand, nine hundred nine, SMP five founded up twenty five point to two thousand ninety six, NAZAC hire by fifty six, trading at thirty five. And that's a Bloomberg business flash. This is taking stock with Pim Box and Kathleen Mas

on Bloomberg Radio. Franksit the UK's both leave the European Union. What doesn't it cast a shadow over? Now we're going to be taking a look at a trade agreement that is going to be taken up again in Brussels, the Transatlantic Trade and Investment Partnership, which is uh certainly instigated some controversy on both sides of the Atlantic. This deal is still being hammered out. What does it mean if the UK is leaving the EU, how will that complicate

this negotiations. Joining US now as Eric Schimp, policy adviser for the International Trade and Regulatory Group at Alston Bird Alston and Bird, I should say in Washington, d C. Home of Bloomberg, Eric, welcome back to the show. Thanks Kathayne. It's great to be with you today. So first of all, uh, okay,

EU is still going to be intact except for the UK. US. We're not changing how and whine does Briggs that complicate this this negotiation over the T T I P. Well, it's a little bit of a chick in an egg scenario with the UK's pending departure UH from the European Union. UH that the the US won't necessarily be able to accommodate a separate deal for for Britain until it's affected.

It's uh it's departure from the EU. In the meantime, even this week, EU leaders have driven home the point that they want to complete this trade deal between the EU and the United States as soon as possible. Their their Trade commissioner was recently in town. Um Commissioner Malmstrom. She said, we won't we know it's ambitious. We want to finish by the end of the year. Uh. Some of that is certainly going to be driven politically by a desire within some European Union capitals to make the

UK understand and realize exactly how painful departure could be. Well, but for the newtiations, is it not just as simple as this? Okay, we'll do the t T I P with the EU minus the UK, and then will we could we negoti shade a deal with the UK? And after all, our exports to the UK are what less than five four and a half percent something like that of our total exports? Right there? There a fraction. I think a lot of it though, have to do with you know, it's hard to have a trade negotiation without

the politics involved. UM, and a lot of the even being able to negotiate with the U k UM depends on the deal that the UK strikes itself with the EU. UM. Will it be part of the single market, in which case it would have to apply the European unions come in external tariff for trade with the US? Uh? You know, will it take a Swiss model where it where it cobbles together dozens, if not over a hundred, bilateral sectoral agreements or a customers union like Turkey. Uh, there are

a lot of questions involved. I think clearly you could you could negotiate t TIP and then pending uh the UK's departure, which could take two years or more. Uh, then you figure out the forward for does the UK have sort of a new accession mechanism to t TIP or does the terms of its departure essentially rule out rule out that any anything like that happening? Eric, Is that what you're starting to say. I believe we may have just temporarily lost our connection to Eric Shimp from

Alston and Bird in Washington. We're talking to him about how the brakes at four, the UK getting ready to leave the European Union, of though it still has to negotiate that with the EU. How that will complicate things? You know? Eric, I guess one way we can say this is certainly complicating, maybe not for the whole country, but for individual businesses who might be located in the UK to trade with the EU. Uh. There maybe suddenly

out of luck. I mean, can they the the the UK is going to have to negotiate its own deal now the EU on trade. That's that's correct. The EU has a number of very difficult decisions ahead of it in terms of the shape of its relationship with the EU. Uh, the EU is not necessarily going to make that that easy. You know, continuing to be a member of the Single Market is going to carry a price for the UK.

If you're a if you're an American investor and you put a manufacturing plan in the UK because you wanted to access the EU market, you're looking at losing the very reason you made that investment. Um and and so there are certainly need to be plans a foot in terms of your physical plant, your human resources, your ongoing investment, your supply chain, and and those are all unknowns until you understand what it is that the UK is going to be doing visa the it's former partners in Europe.

So let's say you they said, come on, come on here, Actually I'm sit down, help us me negotiate this. Let's say you're in the UK, and what would you be up against. What would you be trying to convince the EU to bend on? What does what does the UK want in terms of trade with the EU? And what are they likely to get it? Uh, you know, that's a great question. And I don't think there's a single member of the UK government that can take you definitively

what their plan is. Uh. They some of them seem to want to have maintained membership in the Single Market the way they've they've been doing, but without paying for it. You leaders have already said no, no, no, you're already you're going to have to continue to make a financial contribution if you want it, because Norway and Iceland and Lichtenstein do on the terms of their their membership in

the Single Market. Plus you have to accept the free movement of good services, capital, and most troubling for the UK labor people. Um So politically, the the the UK really hasn't wrapped its head around what this challenge looks like. Eric sim thank you so much for joining us. A lot of questions, not a lot of answers yet, but certainly we have a better understanding of the complexity of what this Brexit will mean as the UK divorces itself from the European Union, can what kind of relations can

it maintain on trade? This is taking stock and this is Bloomberg. We're going to be looking next at China. China has made some signs that it might be weakening its currency these traders have been talking about that what does that mean for the markets that's coming up, And this is Bloomberg