Brexit & the U.S. Elections
Santiago, Chile
November 9, 2016
Sarah Jane Mahmud
Regulatory Analyst
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Vote to leave the EU: 23 June
Legal consequences
No precedent
Lengthy exit process
Constitutional challenge
Access to 27 EU countries
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“Any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements.” “A Member State which decides to withdraw shall notify the European Council of its intention.” “The Treaties shall cease to apply to the State in question from the date of entry into force of the withdrawal agreement or, failing that, two years after the notification.” - Treaty of Lisbon
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“The Crown has no prerogative power to effect a withdrawal from the Community Treaties on whose continues existence the EU law rights introduced into domestic law depend . . . . The Crown therefore has no prerogative power to effect a
withdrawal . . . . We hold that the Secretary of State does not have power under the Crown’s prerogative to give notice pursuant to Article 50 for the United Kingdom to withdraw
from the European Union.”
- Court Judgment (3 November 2016)
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“During the past twenty years, we have incorporated more than 10,000 EU rules into the EEA agreement …. However, we have had little direct influence over these rules …. We are merely consulted. The EU is under no obligation to listen. We have to work hard to make our voice heard …. I have a hard time seeing the UK, with
its global ambition, dedication and contributions, being comfortable with such an arrangement.”
- Norwegian Government
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Over 120 sector-specific treaties
Unique model
Free movement rules
Not sustainable
Limits size of financial centre
EU unlikely to offer same option
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Default option
Used by Brazil, Russia
No favourable relationships
Risk to trade
Financial-services
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2.2 million people
£190 billion to UK economy
11.8% economic output
£67 billion tax revenue
£72 billion trade surplus
>£100 billion foreign company
investment
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“A passport is a mechanism through which firms may exercise their right to provide services and their right
to establishment. With a passport, an entity’s authorisation to do business in one EU Member State
(and under certain directives in EEA states, too) is recognised by all other Member States as an
authorisation to business in their territory as well. As such, a passport obviates the need to obtain separate
authorisations from other Member States.” - Financial Conduct Authority
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Outbound: 336,421 passports 5,476 companies
Inbound: 23,532 passports 8,008 companies
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What is bi <go>?
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Economic impact
Commodity prices
Export income
Investment anxiety
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Redefine trading relationship
£7 billion exports
£1.7 billion trade surplus
Mercosur trade talks
TTIP negotiations stall
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Political turmoil
European elections
No Union
“Brexit is the most significant political risk the world has experienced since the Cuban Missile Crisis.” - Ian Bremmer, Eurasia Group President
EU disintegration
Popularist sentiment
U.S. elections
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Supreme Court decision: 1Q17
Article 50
Soft or hard Brexit
Access to single market and trade relationships
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