UK 'Leave' vote deflates hopes for U.S.-EU trade deal

Fri Jun 24, 2016 2:56pm EDT
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By David Lawder

WASHINGTON (Reuters) - Britain's looming exit from the European Union is another huge setback for negotiations on a massive U.S.-EU free trade deal that were already stalled by deeply entrenched differences and growing anti-trade sentiment on both sides of the Atlantic.

The historic divorce launched by Thursday's vote will almost certainly further delay substantial progress in the Transatlantic Trade and Investment Partnership (TTIP) talks as the remaining 27 EU states sort out their own new relationship with Britain, trade experts said on Friday.

With French and German officials increasingly voicing skepticism about TTIP's chances for success, the United Kingdom's departure from the deal could sink hopes of a deal before President Barack Obama leaves office in January.

"This is yet another reason why TTIP will likely be postponed," said Heather Conley, European program director at the Center for Strategic and International Studies, a think tank in Washington.

"But to be honest, TTIP isn't going anywhere, I believe, before 2018 at the earliest," she said.

U.S. Trade Representative Michael Froman said in a statement on Friday that he was evaluating the UK decision's impact on TTIP, but would continue to engage with both European and UK counterparts.

"The importance of trade and investment is indisputable in our relationships with both the European Union and the United Kingdom," Froman said. "The economic and strategic rationale for T-TIP remains strong."

TTIP negotiators are still expected to meet in Brussels in mid-July as scheduled, but those talks were aimed at focusing on less controversial issues while leaving the thorniest disagreements for U.S. and EU political leaders to resolve. And it is unclear when Britain will launch formal separation proceedings, which will take at least two years.   Continued...

Protesters depicting Statue of Liberty (L) and Europa on the bull take part in a demonstration against Transatlantic Trade and Investment Partnership (TTIP) free trade agreement ahead of U.S. President Barack Obama's visit in Hannover, Germany April 23, 2016.  REUTERS/Kai Pfaffenbach