Brexit update

NICK EICHER, HOST: Coming up next on The World and Everything in It: the status of Brexit.

During his visit to the United Kingdom last week, President Trump caused a furor when he warned the slow pace of Britain’s break with the European Union could strain U.S.-UK trade relations.

During an exclusive interview with The Sun newspaper, Trump said Prime Minister Theresa May’s so-called soft Brexit approach could kill any hopes for a free-trade deal between the allies.

MEGAN BASHAM, HOST: Those comments came amid a British government shake-up over the country’s impending withdrawal from the European Union. Several of May’s top cabinet ministers quit over a dispute about how the exit plan should proceed.

Here to bring us up to speed on Brexit and explain why President Trump weighed in on the issue is WORLD Radio’s Anna Johansen.

Good morning, Anna!

ANNA JOHANSEN, REPORTER: Hi, Megan!

So, last week we heard a lot about Brexit and how that might affect trade between the United States and the United Kingdom. Help us understand what started this panic.

JOHANSEN: Yeah, some of the headlines last week were a little dramatic. My personal favorite was, “Does Trump’s Interview Signal the End of Diplomacy?” All of this came from an interview President Trump gave before his official meeting with Prime Minister Theresa May. Actually, here’s some of what he said:

TRUMP: No, but it’ll definitely affect trade with the United States, unfortunately, in a negative way.

Trump later backpedaled and said those comments were taken out of context. And he also affirmed his commitment to trade with Great Britain no matter what happens with Brexit and the European Union.

Okay, let’s back up a bit. This story has been going on so long, can you remind us what Brexit means?

JOHANSEN: Yeah, sure. Brexit is just the fun new word that we use to describe the British exit from the European Union. By way of background, the EU is made up of about 30 nations. They banded together officially in 1993. Member nations pay dues and agree to certain shared policies and regulations. And some British lawmakers say all those regulations cost UK businesses about 600 million pounds per week. That’s about 800 million U.S. dollars. So, long story short: In 2016 a very slim majority of UK voters said they didn’t want the EU calling all the shots anymore. That vote triggered the UK exit from the European Union, but British lawmakers still have to work out all the details.

Right and, you know, voters chose this. They voted for this two years ago. I think a lot of people are wondering where are we in the process. What’s taking so long?

JOHANSEN: Right now they’re in the middle of a massive political headache because pulling out of the EU is harder than it sounds. And many lawmakers still oppose the effort despite the votes. They’re lobbying for what’s called a soft Brexit. They want to still retain some ties with the EU. The prime minister, Theresa May, is part of that camp. Others want a hard and fast deal, so they advocate what’s called a hard Brexit.

But Britain is really enmeshed in the European Union. And if it pulls out, they have to replace all that political infrastructure with other supply chains, other policies, other trade, and some people are concerned that they won’t be able to get good trade deals.

So, that’s where the U.S. comes in.

Right now there are some products that Britain can’t buy from the U.S. because of European Union regulations. For example, the EU bans genetically modified crops. But in the U.S., we grow them all the time. So if we really wanted to trade more soybeans or corn or cotton with the UK, then the UK would have to get rid of those standards.

The problem is Theresa May’s plan for Brexit still keeps a lot of EU regulations. So, that’s what led to Trump’s comments last week.

Right, and I know we all saw a lot of headlines related to those comments. But can you tell me what happens beyond those headlines? What happens once you get past all of the hype?

JOHANSEN: Yeah, I actually spoke with Iain Murray from the Competitive Enterprise Institute about this question. He works with economics and international trade, so I asked him what effect President Trump’s comments actually had… let’s listen to a part of what he said:

MURRAY: President Trump said that there probably wouldn’t be a UK/US free trade agreement if this sort of thing went ahead. And that really did seem to hit home. A series of amendments were put forward by the European Reform group, which is the hard right Brexit group of conservative MPs. Because of this negative backlash, the government accepted the European Reform group’s amendments, and they all passed. I think President Trump’s remarks probably did have an effect and change the nature of the parliamentary debate this week.

Those amendments have only focused on one small part of Brexit, so the UK still has to nail down their complete Brexit strategy before they can really figure out what they’re doing with the EU and the United States.

WORLD Radio’s Anna Johansen. Thanks so much for putting all that in perspective for us, Anna.

JOHANSEN: You’re welcome!

(Dominic Lipinski/PA via AP) Britain’s Prime Minister Theresa May leaves 10 Downing Street in London, bound for the House of Commons to the scheduled Prime Minister’s Questions, Wednesday July 18, 2018. 

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