New Year Message from BABC President Steve Allen
At the start of 2016 not many of us were predicting either a vote to leave the European Union in the UK or the victory of President Elect Trump in the US. In my travels around the US in the months leading up to the US election it was difficult to find many Americans who were vocal supporters of the President Elect although it was clear that Secretary Clinton was not the popular choice as the Democratic nominee.
What the recent electoral results have taught us is not simply that pollsters often get it wrong but that increasingly those that govern us have overlooked a very significant proportion of the electorate who feel increasingly isolated from what others regard as the benefits of globalisation. Mr Trump’s focus on economic protectionism and opposition to what he considers to be bad trade deals clearly resonated with the electorate particularly in the so called ‘rust belt’ states of Pennsylvania, Ohio, Michigan, and Wisconsin which carry a significant number of manufacturing jobs.
Similarly, in the EU referendum the fact that the majority were willing to dismiss the chorus of warnings from the CBI, IMF, OECD and from President Obama as to the potential economic consequences of leaving the EU points to the fact that a great many people in the UK felt isolated from the economic benefits of five decades of EU membership.
As the UK begins to cut its ties with the EU from March 2017 and the new administration in the US sets about withdrawing from both TPP and TTIP negotiations and re-negotiating NAFTA where does this leave ‘the special relationship’ in terms of our trading relationship?
We know that the President Elect is not against free trade agreements per se. His campaign website pledged to negotiate free trade deals that create American jobs, increase American wages and reduce America’s trade deficit. In November the President Elect talked about negotiating ‘fair bilateral trade deals’ that bring jobs and industries back to the US. Clearly the UK should take some comfort from this. A bilateral trade deal with the UK avoids the numerous problems involved in negotiating with dozens of countries each with their own differing trade agenda priorities. It is arguable that the only reason why there isn’t already a trading agreement in place between the UK and the US is because of the UK’s membership of the EU.
For both countries the benefits of a free trade deal are clear. It is estimated that a trade deal with the US could add approximately £10bn to the UK economy. For the US already selling over £56bn of goods and services to the UK each year, the UK remains one of its most important trading partners. The removal of EU imposed tariff and regulatory barriers will potentially unlock further trade opportunities for US industry.
An Anglo/American trade deal will not immediately be near the top of the list for the incoming administration. The UK will not be free to negotiate new trade agreements until it has left the EU in any event and therefore it is unlikely that any meaningful discussions will take place for at least another 2 years. I firmly believe however that in the meantime the BABC has an important role to pay in the lead up to those negotiations. As the leading transatlantic business network with over 2000 member companies over 22 Chapters in the US and UK we are in a unique position to help shape and drive forward the trade agenda between our two countries. Indeed, it is arguable that the work undertaken by the BABC has never been more relevant and strategically important as it is now. I’d like to pay tribute to the work already undertaken by our CEO Jeffries Briginshaw and our Trade, Investment & Policy team following the vote in the UK earlier this year. As we look forward to 2017, placing the BABC at the centre of thought leadership on trade and investment opportunities between the US and the UK will be central to our strategy for the year ahead.
Our annual conference in Chicago in May 2017 presents the BABC with an excellent opportunity to demonstrate the importance of our strategic role in navigating the new world and I very much look forward to seeing as many of you there as possible.
In the meantime, may I wish you and your Chapters a happy and prosperous 2017.
President British American Business Council
3 January 2017