WEBVTT - Alston & Bird's Shimp on Trade Issues Surrounding Brexit(Audio)

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<v Speaker 1>Broadcasting live to New York, Bloomberg eleven Brio to Washington,

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<v Speaker 1>d C. Bloomberg to Boston, Bloomberg twelve hundred to San Francisco,

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<v Speaker 1>Bloomberg nine to the country is exam General one nine

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<v Speaker 1>and around the globe the Bloomberg Radio plus ad Bloomberg

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<v Speaker 1>dot Com. This is taking stock. If you voted to

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<v Speaker 1>leave the European Union, but you're not exactly sure if

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<v Speaker 1>you're going to be out by the end of the year.

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<v Speaker 1>If Conservative Boris Johnson, who pushed for that exit, is

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<v Speaker 1>not going to stand to be your next prime minister,

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<v Speaker 1>and you perhaps have less idea than ever who that

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<v Speaker 1>will be at the Bank of England says it's going

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<v Speaker 1>to possibly cut rates, but you don't know that for

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<v Speaker 1>sure either. How do you negotiate the rest of the

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<v Speaker 1>transatlantic trade and investment partnership between the United States and

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<v Speaker 1>the EU. What does the bregit me vote mean for

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<v Speaker 1>this very important trade agreement. We're gonna be taking up

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<v Speaker 1>that question on Bloomberg Radio. Now we're going to Katherine Carterie.

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<v Speaker 1>She's in the newsroom with a Bloomberg Business Flash. Thank you,

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<v Speaker 1>Kathleen and Bloomberg. Taking stock is brought to you by

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<v Speaker 1>National Realty Providers of Satisfaction Guaranteed New York City Realty Investments.

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<v Speaker 1>See them at n r I a dot net. Well

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<v Speaker 1>the global rally continues this Policymakers signal further steps to

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<v Speaker 1>buffer the impact of Britain's decision to leave the European Union.

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<v Speaker 1>Equities were boosted afterward today that the European Central Bank

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<v Speaker 1>is considering loosening the loosening the rules for its bond

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<v Speaker 1>purchases to ensure enough debt is available to buy in

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<v Speaker 1>the aftermath of the Brexit vote. Just dayly, Chief executive

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<v Speaker 1>at Barclays on the impact of Brexit. I think the

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<v Speaker 1>crisis we're facing right now is a political crisis. Um.

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<v Speaker 1>It clearly will have economic consequences um But right now

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<v Speaker 1>we have a political crisis that may lead to economic

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<v Speaker 1>challenges facing a banking industry that actually is in very

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<v Speaker 1>strong shape, particularly UH in the UK. We check the

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<v Speaker 1>markets every fifteen minutes throughout the trading day on Bloomberg Radio.

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<v Speaker 1>Down industrial leverage of two hundred twelve points one two

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<v Speaker 1>percent trading at seventeen thousand, nine hundred seven smp F

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<v Speaker 1>I founded up twenty five points one point two percent,

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<v Speaker 1>trading at two thousand nine Nazac Hire by fifty six

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<v Speaker 1>points one point two percent, trading at forty eight thirty

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<v Speaker 1>five less. Texas Intermedia crude oil down a dollar thirty

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<v Speaker 1>eight of barrel two point eight percent to forty eight

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<v Speaker 1>fifty speckled down two dollars eighty cents anounced at ten

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<v Speaker 1>year treasury up ten thirty seconds, with the yield of

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<v Speaker 1>one point for eight percent. Among today's top business stories,

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<v Speaker 1>Hershey has nubbed a preliminary takeover offer for Mondaleze International

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<v Speaker 1>for one hundred seven dollars to share in cash and stock.

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<v Speaker 1>And now let's get an update of some of the

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<v Speaker 1>other stories were following today on Bloomberg Radio. Thank you

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<v Speaker 1>Catherine from the Bloomberg Newsroom. I'm Chill Schneider. This news

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<v Speaker 1>update is brought to you by the Jeep Grand Cherokee,

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<v Speaker 1>Effective immediately, transgender Americans will be able to openly serve

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<v Speaker 1>in the US Armed Forces. Defense Secretary Ash. Carter says

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<v Speaker 1>service members may not be involuntarily separated, discharged, or denied

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<v Speaker 1>based on gender identity. Carter says service members should be

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<v Speaker 1>judged on their abilities and not their gender. When I

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<v Speaker 1>heard from the transgender service members I met with, overwhelmingly

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<v Speaker 1>was that they don't want special treatment. They want to

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<v Speaker 1>be held to the same standards and be treated like

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<v Speaker 1>everybody else. The full policy must be implemented by July

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<v Speaker 1>two thousand seventeen. Homeland Security Secretary J Johnson said today

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<v Speaker 1>the US is on target to meet the goal of

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<v Speaker 1>admitting ten thousand refugees from Syria this year. Approximately five

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<v Speaker 1>thousand have been approved for resettlement and just have not

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<v Speaker 1>been physically resettled yet in the United States, and another

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<v Speaker 1>five or six thousand have been conditionally approved subject to

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<v Speaker 1>those security checks. So I believe we will make the

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<v Speaker 1>ten thousand. The Obama ad illustration decided last year to

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<v Speaker 1>sharply increase the number of Syrian refugees taken into the

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<v Speaker 1>United States. New York City's original Apple repair store is closing.

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<v Speaker 1>Tech Serve has succumbed to competition and rising rents. After

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<v Speaker 1>almost thirty years of servicing computers and providing technical support

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<v Speaker 1>to local residents. Global news twenty four hours a day,

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<v Speaker 1>powered by more than twenty six hundred journalists and analysts

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<v Speaker 1>in more than one hundred twenty countries. From the Bloomberg Newsroom.

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<v Speaker 1>I'm Jill Schneider and this is Bloomberg. Catherine, thank you.

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<v Speaker 1>And now let's get a quick update of the benchmarks.

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<v Speaker 1>Down Industrial Average up two hundred fifteen points at seventeen thousand,

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<v Speaker 1>nine hundred nine, SMP five founded up twenty five point

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<v Speaker 1>to two thousand ninety six, NAZAC hire by fifty six,

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<v Speaker 1>trading at thirty five. And that's a Bloomberg business flash.

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<v Speaker 1>This is taking stock with Pim Box and Kathleen Mas

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<v Speaker 1>on Bloomberg Radio. Franksit the UK's both leave the European Union.

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<v Speaker 1>What doesn't it cast a shadow over? Now we're going

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<v Speaker 1>to be taking a look at a trade agreement that

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<v Speaker 1>is going to be taken up again in Brussels, the

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<v Speaker 1>Transatlantic Trade and Investment Partnership, which is uh certainly instigated

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<v Speaker 1>some controversy on both sides of the Atlantic. This deal

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<v Speaker 1>is still being hammered out. What does it mean if

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<v Speaker 1>the UK is leaving the EU, how will that complicate

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<v Speaker 1>this negotiations. Joining US now as Eric Schimp, policy adviser

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<v Speaker 1>for the International Trade and Regulatory Group at Alston Bird

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<v Speaker 1>Alston and Bird, I should say in Washington, d C.

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<v Speaker 1>Home of Bloomberg, Eric, welcome back to the show. Thanks Kathayne.

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<v Speaker 1>It's great to be with you today. So first of all, uh, okay,

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<v Speaker 1>EU is still going to be intact except for the UK. US.

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<v Speaker 1>We're not changing how and whine does Briggs that complicate

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<v Speaker 1>this this negotiation over the T T I P. Well,

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<v Speaker 1>it's a little bit of a chick in an egg

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<v Speaker 1>scenario with the UK's pending departure UH from the European Union.

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<v Speaker 1>UH that the the US won't necessarily be able to

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<v Speaker 1>accommodate a separate deal for for Britain until it's affected.

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<v Speaker 1>It's uh it's departure from the EU. In the meantime,

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<v Speaker 1>even this week, EU leaders have driven home the point

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<v Speaker 1>that they want to complete this trade deal between the

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<v Speaker 1>EU and the United States as soon as possible. Their

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<v Speaker 1>their Trade commissioner was recently in town. Um Commissioner Malmstrom.

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<v Speaker 1>She said, we won't we know it's ambitious. We want

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<v Speaker 1>to finish by the end of the year. Uh. Some

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<v Speaker 1>of that is certainly going to be driven politically by

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<v Speaker 1>a desire within some European Union capitals to make the

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<v Speaker 1>UK understand and realize exactly how painful departure could be. Well,

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<v Speaker 1>but for the newtiations, is it not just as simple

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<v Speaker 1>as this? Okay, we'll do the t T I P

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<v Speaker 1>with the EU minus the UK, and then will we

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<v Speaker 1>could we negoti shade a deal with the UK? And

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<v Speaker 1>after all, our exports to the UK are what less

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<v Speaker 1>than five four and a half percent something like that

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<v Speaker 1>of our total exports? Right there? There a fraction. I

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<v Speaker 1>think a lot of it though, have to do with

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<v Speaker 1>you know, it's hard to have a trade negotiation without

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<v Speaker 1>the politics involved. UM, and a lot of the even

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<v Speaker 1>being able to negotiate with the U k UM depends

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<v Speaker 1>on the deal that the UK strikes itself with the EU. UM.

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<v Speaker 1>Will it be part of the single market, in which

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<v Speaker 1>case it would have to apply the European unions come

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<v Speaker 1>in external tariff for trade with the US? Uh? You know,

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<v Speaker 1>will it take a Swiss model where it where it

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<v Speaker 1>cobbles together dozens, if not over a hundred, bilateral sectoral

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<v Speaker 1>agreements or a customers union like Turkey. Uh, there are

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<v Speaker 1>a lot of questions involved. I think clearly you could

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<v Speaker 1>you could negotiate t TIP and then pending uh the

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<v Speaker 1>UK's departure, which could take two years or more. Uh,

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<v Speaker 1>then you figure out the forward for does the UK

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<v Speaker 1>have sort of a new accession mechanism to t TIP

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<v Speaker 1>or does the terms of its departure essentially rule out

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<v Speaker 1>rule out that any anything like that happening? Eric, Is

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<v Speaker 1>that what you're starting to say. I believe we may

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<v Speaker 1>have just temporarily lost our connection to Eric Shimp from

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<v Speaker 1>Alston and Bird in Washington. We're talking to him about

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<v Speaker 1>how the brakes at four, the UK getting ready to

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<v Speaker 1>leave the European Union, of though it still has to

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<v Speaker 1>negotiate that with the EU. How that will complicate things?

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<v Speaker 1>You know? Eric, I guess one way we can say

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<v Speaker 1>this is certainly complicating, maybe not for the whole country,

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<v Speaker 1>but for individual businesses who might be located in the

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<v Speaker 1>UK to trade with the EU. Uh. There maybe suddenly

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<v Speaker 1>out of luck. I mean, can they the the the

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<v Speaker 1>UK is going to have to negotiate its own deal

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<v Speaker 1>now the EU on trade. That's that's correct. The EU

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<v Speaker 1>has a number of very difficult decisions ahead of it

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<v Speaker 1>in terms of the shape of its relationship with the EU. Uh,

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<v Speaker 1>the EU is not necessarily going to make that that easy.

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<v Speaker 1>You know, continuing to be a member of the Single

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<v Speaker 1>Market is going to carry a price for the UK.

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<v Speaker 1>If you're a if you're an American investor and you

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<v Speaker 1>put a manufacturing plan in the UK because you wanted

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<v Speaker 1>to access the EU market, you're looking at losing the

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<v Speaker 1>very reason you made that investment. Um and and so

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<v Speaker 1>there are certainly need to be plans a foot in

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<v Speaker 1>terms of your physical plant, your human resources, your ongoing investment,

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<v Speaker 1>your supply chain, and and those are all unknowns until

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<v Speaker 1>you understand what it is that the UK is going

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<v Speaker 1>to be doing visa the it's former partners in Europe.

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<v Speaker 1>So let's say you they said, come on, come on here,

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<v Speaker 1>Actually I'm sit down, help us me negotiate this. Let's

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<v Speaker 1>say you're in the UK, and what would you be

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<v Speaker 1>up against. What would you be trying to convince the

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<v Speaker 1>EU to bend on? What does what does the UK

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<v Speaker 1>want in terms of trade with the EU? And what

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<v Speaker 1>are they likely to get it? Uh, you know, that's

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<v Speaker 1>a great question. And I don't think there's a single

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<v Speaker 1>member of the UK government that can take you definitively

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<v Speaker 1>what their plan is. Uh. They some of them seem

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<v Speaker 1>to want to have maintained membership in the Single Market

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<v Speaker 1>the way they've they've been doing, but without paying for it.

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<v Speaker 1>You leaders have already said no, no, no, you're already

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<v Speaker 1>you're going to have to continue to make a financial

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<v Speaker 1>contribution if you want it, because Norway and Iceland and

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<v Speaker 1>Lichtenstein do on the terms of their their membership in

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<v Speaker 1>the Single Market. Plus you have to accept the free

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<v Speaker 1>movement of good services, capital, and most troubling for the

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<v Speaker 1>UK labor people. Um So politically, the the the UK

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<v Speaker 1>really hasn't wrapped its head around what this challenge looks like.

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<v Speaker 1>Eric sim thank you so much for joining us. A

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<v Speaker 1>lot of questions, not a lot of answers yet, but

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<v Speaker 1>certainly we have a better understanding of the complexity of

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<v Speaker 1>what this Brexit will mean as the UK divorces itself

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<v Speaker 1>from the European Union, can what kind of relations can

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<v Speaker 1>it maintain on trade? This is taking stock and this

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<v Speaker 1>is Bloomberg. We're going to be looking next at China.

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<v Speaker 1>China has made some signs that it might be weakening

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<v Speaker 1>its currency these traders have been talking about that what

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<v Speaker 1>does that mean for the markets that's coming up, And

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<v Speaker 1>this is Bloomberg