Trade representative Michael Froman has said that the United Kingdom will face same tariffs and barriers as China, Brazil or India if it exits the European Union. He went on to add that the US is not keen on pursuing a separate free trade deal with Britain if it leaves the EU. This is the first time a senior US official has commented on the issue.
United States is of course Britain’s biggest export market after the EU. The country purchased more than $54bn (£35bn) in goods from the UK in 2014. There will naturally be a serious economic impact if these trading restrictions are indeed implemented.
Froman goes on to say, “I think it’s absolutely clear that Britain has a greater voice at the trade table being part of the EU, being part of a larger economic entity”. EU membership gives Britain more leverage in negotiations, he feels.
Froman’s comments on Wednesday undermine a key economic argument of those who want the UK to exit. They feel that Britain will prosper on its own and be able to secure bilateral free trade agreements (FTAs) with trading partners by going out of the Union. Voters are due to decide by the end of 2017 whether the UK should remain in the EU. Opinion polls have revealed that there is growing support for leaving the bloc.
Washington has just sealed a trade deal with 11 other Pacific nations and wants to wrap up negotiations with the EU on the Transatlantic Trade and Investment Partnership (TTIP) by the end of next year.
United States is Britain’s second-largest export market for vehicles outside the EU. If Britain is not part of the EU and therefore not part of TTIP, British cars exported to the US, such as those made by Jaguar Land Rover, would face a 2.5% tariff and could be at a disadvantage to German and Italian-made competitors.