The trade partnership between the United Kingdom and California can serve as an ideal model for how Anglo-American trade can go forward, political scientist Dr. Matt Beech said during an international virtual event hosted by the California Chamber of Commerce last Thursday.
The February 25 event, titled “California-UK After Brexit: Prospects for Partnership,” was moderated by CalChamber President and CEO Allan Zaremberg, and featured a presentation by Dr. Beech where he provided analysis of what Brexit means for future trade partnerships; the pending trade deal between the UK and U.S.; and the trade relationship between the UK and California.
Dr. Beech is a political scientist and historian who teaches post-war British political history, government and ideas, and is a Fellow of the Royal Historical Society and the Royal Society of Arts. He also is the founding director of the Centre for British Politics at the University of Hull and senior fellow at the Institute of European Studies at the University of California, Berkeley.
Was Brexit Successful?
The European Union was formed for economic trading cooperation, but over time evolved into a close political social union, Dr. Beech explained during the presentation. The primary goal of the supporters behind “Brexit,” the UK’s departure from the EU, was to regain sovereignty. Supporters wanted the Houses of Parliament to be the sole body able to make laws for British citizens, determine its own borders and set its levels of immigration.
Brexit supporters also took issue with the fact that the UK was a net contributor to the EU, always paying more in membership than it took out. Still, Dr. Beech said, the primary force behind Brexit was a desire for autonomy and sovereignty.
There is no clear picture yet on the economic consequences of the UK leaving the EU as the country is only a year out of the union, but in the political sense, Brexit has been successful, he asserted. The UK is sovereign and the country has already signed 63 trade deals with other countries.
Deals with the U.S. and India are still being negotiated. A deal with China is uncertain.
Reflecting the strong history and trust the U.S. and UK have shared, the two countries are each other’s single largest foreign direct investor, and the U.S. had a goods/service surplus with the UK of $18.9 billion in 2018, Dr. Beech points out.
As is to be expected when a presidential administration changes, there have been some delays with the incoming Biden administration, but Dr. Beech is hopeful that a trade agreement between the UK and U.S. will be signed later this year.
There are, however, several sticking points in the negotiations, particularly regarding agriculture, health care and the food sector, he says. Understandably, American companies want market access in the health care sector, but the area is tricky given that health care is primarily delivered by the National Health Service and publicly funded through taxation in the UK.
Trade between California and the UK is “broadly balanced” and broadly equal to the point that no party has a significant surplus, Dr. Beech explains. The two partners share much in common: a highly skilled workforce; highly developed economies; and shared values.
In fact, Dr. Beech says, the West Coast is the region in the U.S. that shares the most similarities with the UK in terms of the outlook between citizens and many businesses.
The shared values and similar two-way trade between the UK and California in particular can serve to help future UK-U.S. trade negotiations.
“I think the UK-California trade partnership is really crucial,” Dr. Beech says. “I think in a way, that which has been done in the past is a very firm foundation for the future, and I would like to think that as negotiators hopefully come together in the coming months, between the U.S. government and UK government, the knowledge we have between the California and British trading communities can serve as an exemplar of how Anglo-American trade can go forward.”
Dr. Beech also answered questions submitted by viewers and talked about some of the upcoming challenges that the UK will face.
Due to the COVID-19 pandemic, the country will likely be in a different place next year than it is currently, especially given that the UK is still in lockdown and won’t likely come out of lockdown until June, Dr. Beech points out. Therefore, impacts on trade, business and commerce are not yet known.
Financial markets have been preparing for Brexit for several years, so Dr. Beech expects London to remain the finance capitol of the continent, and will remain a desirable city to live and work in.
Dr. Beech does anticipate some changes to the way the UK attracts international students. Up until now, EU students at British universities enjoyed the status of “home students,” with financing from the British government. In the next academic year, however, these students will now be considered international students and will need to finance their own way. Dr. Beech said there will likely be an increase in scholarships and sponsorships from companies that want to draw in talent from around the world.
A recording of Dr. Beech’s “California-UK After Brexit: Prospects for Partnership” presentation is available here.
Staff Contact: Susanne T. Stirling