Newsletter from British American Business Chief Executive Officer:
Duncan Edward
| The last few weeks have been especially busy for BAB so apologies for the lateness of this update! Politics continues to be engrossing on both sides of the Pond with the UK perhaps winning the prizes for drama ahead of the USA, but only just. Starting in the UK, Prime Minister May made a fourth attempt to get the EU Withdrawal Agreement approved by Parliament but failed, triggering the resignation announcement on May 24th. On May 23rd, remarkably, the UK was forced to vote in elections for the European Parliament, nearly 3 years after the referendum result, and almost two months after the original departure date in March. The Brexit Party, a new, single issue party formed by Nigel Farage, won the most seats and the most votes. Signs of the polemic nature of the UK debate were clear as the Liberal Democrats, who are campaigning to overturn the referendum result, came in second. It should be noted however, that the combined votes for parties in favor of leaving the EU (from soft to hard) continue to be ahead of those campaigning to stay. Both Labour and Conservative Parties were committed to leaving in their last Manifestos, but both remain split on the issue in Parliament. Mrs. May’s resignation triggered a leadership campaign in the Conservative Party with MPs whittling candidates down to a final two who will face a run-off vote by the Conservative Party members and then will be invited to form a government as Prime Minister. After several rounds of votes, Boris Johnson, a former Mayor of London and Foreign Secretary, and Jeremy Hunt, the current Foreign Secretary are in the final contest, with both committing to try to get a new agreement from the EU, but if unsuccessful, to leave on Oct 31st with or without a deal. We sense that the upshot of all of this is that some version of no-deal Brexit is much more likely than it was a few months ago. No doubt, a new PM will try to get the EU to accept an amendment to the Withdrawal Agreement around the permanence of the Irish Backstop (which is really the BIG sticking point for most Conservative members). All the signs from the EU is that they will not budge and if this remains the case on Oct 31st, we expect the UK to leave. We have consistently argued for an agreement and transition period but our advice to our members, and all businesses, as we have stated for some time, is to check your exposure to a no-deal outcome and make plans accordingly. In the US the negotiations with China over a future trade agreement seem no nearer a conclusion. While there is general support for the more muscular approach being taken by this administration to solving the problems that all Western economies face when doing business with China, there is genuine concern about the effect of tariffs on the US economy, especially in the short term. At BAB we are no fan of tariffs and come from a strong tradition of arguing for free trade, but we also have to acknowledge that the previous US China policy of negotiation and dialog did not work. Whether the ongoing debate about Huawei is a negotiation tactic or driven by genuine security concerns, I wish I knew for certain. The administration is also continuing to push the USMCA, or new NAFTA, through congress but anyone who thinks that getting trade deals approved in the US is easy should take a look at its tortuous progress and the issues that still need to be resolved. The final big political issue of the last few weeks I would highlight is the President’s visit to the UK. This felt like a resounding success; a success for the US administration who were welcomed by the Queen and her family; for the UK which heard again from the US the commitment to work together whatever the outcome of Brexit, and a success for the relationship, and the wider western alliance, through the commemorations in Normandy. We used the occasion of the President’s visit to London to publish our latest Policy Agenda and did a lot of national media commenting on the significance of the visit and the broader US UK economic relationship. Our Chair, Dame Vivian Hunt, represented BAB at the Palace Banquet and we were the only business organization invited to both the big events (Banquet and Business Breakfast at St. James’). On June 5th, we celebrated BAB members, Lloyds Banking Group and WPP, and more particularly, Antonio Horta Osorio and Karen Blackett, for their personal commitment to the ESG agenda in their company and their industry at the Corporate Citizenship Awards Dinner. It was a fabulous and uplifting evening. The following week in NYC we hosted the inaugural Transatlantic Finance Forum, with a line-up of world class speakers from every part of the Financial Services sector discussing the big issues facing the industry. Many thanks to our sponsors, United Airlines and EY, for helping to make these initiatives such a success. On top of these big events we have had roundtables on the Rule of Law, a Political Insight session with the Chair of the Foreign Affairs select committee, a wonderful reception at the residence of the Deputy Chief of Mission from the US Embassy in London and a terrific BAB Accelerate dinner with US CEO of Fever Tree, Charles Gibb. Finally, I am very happy to report the appointment of Anna Marrs, President, Global Commercial Services at American Express as co-Chair of the International Advisory Board alongside Dan Glaser of Marsh & McLennan. The membership of our Advisory Board reflects the importance of this organization to the transatlantic business community and we are lucky to have Anna and Dan leading it. |
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