The crumbling British pound against the U.S. dollar portends that this summer’s public vote for Britain to secede from the European Union was a flawed idea for Britain’s economic health.
It will take years, though, before the Brexit vote navigates through complicated parliamentary and judicial waters, so the lasting financial effects are far from known.
What’s known now is that voters in Britain have since learned more about the consequences of separating from the EU, said Andrew Cheung, a global trade expert in the London office of the Dentons law firm.
So would they still vote to leave if the vote were held today? Cheung was asked that Thursday at an international trade seminar sponsored by the World Trade Center Kansas City and Dentons.
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“Polls suggest the results would be the same,” Cheung said, correlating Brexit voters’ sentiments to those being voiced by many in the American electorate. Great disbelief in “experts” and feelings of being left out of prosperity are pervasive among both British and American voters, he noted.
Presidential candidate Donald Trump, in particular, has campaigned on the platform that global trade has caused American job losses. And both Trump and Hillary Clinton have focused on the proposed Trans Pacific Partnership trade agreement as the bucket into which U.S. workers’ anger is deposited.
Raj Bhala, an international trade expert and professor at the University of Kansas School of Law, said the campaign rhetoric — just like the simplistic politicking before the Brexit vote in June — doesn’t help educate American voters about the Trans Pacific Partnership.
For starters, the Trans Pacific Partnership, in development since 2008, would be the largest free trade agreement in history, he said. Its 6,000-plus pages, involving 11 countries, aren’t reducible to sound bites.
“On balance, the TPP would be to the common good of the United States, long-term,” Bhala said. “But it’s not just an easy good/bad thing. It doesn’t free up trade the way proponents say it would, and it doesn’t advance environmental concerns as some opponents would like. But it breaks new ground concerning women’s rights and small business.”
As in Britain, where it will take years to work through Brexit details, Bhala said U.S. trade agreement history shows that it takes about five years for a deal to get approved after it finishes negotiation.
If the Trans Pacific Partnership is approved, he said, there will be more cross-border trade; if it fails, “trade diversion” is likely, with some volume of trade shifting away from the United States.
Panelist Amy Wooden, a communications consultant with political experience, said the current anti-trade rhetoric isn’t new.
“Remember Ross Perot’s ‘giant sucking sound’ in the early ’90s?” Wooden said. “It’s a common theme of frustration.”
While global trade provides “red meat” for any candidate who wants to campaign on domestic security fears, she said the rhetoric rarely translates into action after Election Day.
Bhala said it’s important not to take campaign rhetoric too seriously. Rather, he said, Americans today should “draw strength from our trade history” and remember that “we’ve had deeply divided sectional interests before, but the nation is not facing a civil war over trade policy” like it did in the 1800s.
Isolationism rhetoric may be heightened now, but Cheung, Bhala and Wooden all agreed that Americans generally say they favor free trade.