As Britain continues to struggle over Brexit, what trade oppotunities might Britain's exit from the EU have for the United States? And how much of the economy in the Syracuse area relies on trade with Britain? This week, Grant Reeher talks with Ross Allen, Director for North America of Britain's Department for International trade.
Reeher: First of all, could you just briefly describe to our listeners your portfolio as the director for North America of Britain’s Department for International Trade?
Allen: Absolutely, yeah. We’re here to do three things, really. We help British companies export to the U.S. and Canada, so I oversee a team that covers both those countries. The second thing we do is encourage inward investment into the U.K. So, if there are American or Canadian companies looking to set up an operation in Europe, we’re here to encourage them to look to the U.K. and then to help them set up in the U.K. if they want to. And the third thing is helping British companies who are out here in the market. So, there are actually quite a lot of U.K. firms set up in the U.S. and Canada, and we’re also here to help them. We want them to be successful. So, it’s the exports in one direction and inward investment back to the U.K. and then helping British companies out here in the market.
Reeher: OK, great. And I would think, based on what you just described and thinking about what’s going on in the world for the last couple years, I would think that there are two kind of large-scale and perhaps equally unpredictable forces that are affecting your thoughts as you go about that job and thinking about British trade with the U.S., and that would be Brexit, on the one hand, and the Trump administration’s statements and actions regarding trade on the other. Is that true? Are those the two sort of big elephants in your room as you’re thinking about these issues?
Allen: Yeah. Those two are certainly factors and things that have affected our work, and I’m happy to talk a little bit about each of those. I guess the third one would be the sort of general trends in the economy, so we’re looking to focus as much as we can on those sort of sectors and industries that are going to grow in the future. … We’re doing a lot more in, for example, green energy and probably less in terms of fossil fuels than we were a few years ago.
Reeher: Let’s start with Brexit, though. And it’s both a moving and a nonmoving target, but first of all, just remind our listeners where Britain and Europe currently are on Brexit. And I want to note that we’re talking on April 18th, so things can change. But where do things stand right now?
Allen: As I speak, we’re still a member of the EU. For those of your listeners who don’t follow it that closely, we had a referendum, a public vote, back in 2016, and we voted overall to leave the European Union. We’ve been negotiating the terms of our departure since then. Our prime minister has been negotiating, in effect, two things with the EU: a withdrawal agreement, which would set out the terms of our departure, and then a shorter, political declaration, which describes our intention to have a very close and strong partnership in the future. She has brought those to the House of Commons and tried three times to get them through, so far, unsuccessfully. And that’s been the sort of focus of a lot of the media coverage and so on. … The prime minister went back to the European council in the last couple of weeks and agreed a further extension while we continue to reflect on what we do next. So, the terms of that extension, that will take us up to October the 31st, later this year. That has been described as a so-called “flextension,” so the idea is that if, during that period, we actually were able to agree on something ourselves domestically that the EU is happy with, we could leave sooner. But October the 31st is, in effect, the new final deadline. What’s happening domestically, I’ll tell you a couple of things. The prime minister has opened a dialogue with the opposition party in the U.K. So, the prime minster’s from the conservative party. The main opposition party is the labor party. She’s opened a discussion with them about whether there are ways in which the deal which she’s negotiated could be tweaked in some way and that this is focusing particularly on the future partnership with the EU in such a way that the labor party would be willing or enough members of the labor party would be willing to support the deal. And those talks are continuing. … The prime minister has said it’s strongly her preference to leave with a deal and obviously, in the future, working to have a very strong partnership with Europe. We can’t do anything about geography. We’re still a European country. We’ll still want to trade a lot with the rest of Europe in terms of our defense and security relationship. Europe will be very important to us in the future. So, the aim is to preserve as much of that as we can and then use the opportunity of leaving the EU to do more globally.
Reeher: Some observers and advocates for this saw the controversy and the inability so far to generate an agreement as an opportunity for a rethink of the entire question, to have even a second referendum. There did seem to be, what we call in the states here, buyer’s remorse over the outcome over that vote. Is that a real possibility at this point? Or has that train left the station?
Allen: I represent the government, and the government’s view is that we’ve had a referendum, and actually, the outcome was quite clear, and that what we should do is actually work hard to reach an agreement that delivers what people voted for. So, the direction the government is planning to go in is delivering on the outcome of the referendum that we held, and that’s obviously what we’re intending to do, and the prime minister has been fairly clear that she doesn’t think that holding another referendum would be either respecting the outcome of the first one or necessarily that it would even take us anywhere more helpful. And some independent commentators have questioned, I think, whether it would actually help move the situation on or not. There are lots of questions around what the question might be, if it was another very narrow outcome, what would that mean, and so on. … The really challenging thing with all of this, which has been reported in the media, is that parliament has been very, very clear several times what it doesn’t like. And lots of different options have been voted down. The challenge has been to get parliament [to] positively vote for something that a majority of MPs can agree on as sort of a positive way forward.
Reeher: Let’s shift now to trade and North America and some of the things that your office is concerned with. And you mentioned earlier in our conversation that Brexit might open up some opportunities for better trade between Britain and the U.S. So, tell me a little bit about how you see that working.
Allen: As a member of the EU, one of the things that comes with that, for the countries that are member states, is that the EU negotiates trade policy on your behalf. So, right now, we are still an EU member state, so that’s still the case. The EU represents us in international trade talks. When we leave, we will take over responsibility for that ourselves. We will have an independent trade policy. And we have said that among the priority countries that we would like to do or negotiate and implement free trade agreements with are the U.S. We would like to do a new free trade agreement with America, and I know you have some listeners in southern Ontario who are also very keen to roll over the agreement that Canada has with the U.K. and then, over time, look to perhaps build on and strengthen and deepen that relationship, too. So, that’s really the prize here. … And if we’re doing that on our own and not as a member of the EU, we could potentially find agreements that are a bit more flexible, a bit more nimble, bit more suited to us specifically as the U.K. and that don’t have to take into account the interests of the 27 other members of the EU.
Reeher: Let’s move and talk more specifically about, then, that relationship, economically and the trade relationship, between Britain and the Syracuse area. And I’ve looked at some of the data that’s been generated by your office, and it’s really striking. And I have to say, it was surprising to me, that, if I understood it correctly, Britain is Onondaga County – and that’s the county that surrounds Syracuse – it’s the county’s third largest export market, with yearly goods export to Britain of $73 million and service exports of $92 million. … Goods exports seem pretty self-explanatory, but tell me a little bit more about what a services export is.
Allen: This reflects what I was saying about the broader trend towards services. So, we’re obviously a very keen supporter of goods trade too, and that’s important. I’m based in New York City, but I was in the Syracuse area at the end of last year. … On the services side, you’ve got, for example, companies in the travel sector, in insurance, in wider financial services, management and consulting services, telecoms and so on. Those are all areas that have been big services exports from the Syracuse area to the U.K. This all sounds sometimes, I think, very theoretical unless you start thinking about it in terms of jobs. And by our calculations and the work that we’ve done, we think around 1,000 jobs in the greater Syracuse area are supported by those exports. So, to me, that’s very real, and that’s actually what makes me come to work each day. A lot of what my team do[es] generates job and growth in both of the countries that we work with. By that trading relationship and investment relationship, we’re generating jobs and growth in the U.K., jobs and growth in the U.S. and jobs and growth in Canada. And that’s one of the few things that everybody wants.
Reeher: Break that down more specifically for me, and let’s take travel because travel in the data that I looked at was the single biggest subcategory of exported services to Britain from Syracuse. And I was scratching my head thinking about that, just thinking about how that would work. So, explain that to me. Is that someone providing a travel service that is based in the Syracuse area that is then being purchased – that service is being purchased – by someone in Britain? Is that what that means?
Allen: It could be. The only danger with these statistics is actually digging into them, and the categories and so on is quite complicated. So, it could be that, or it could be sales of services from companies based in the Syracuse area. … The thing that’s unusual with services exports is that, unlike with goods exports, you can’t go and watch something being unloaded onto a ship. And some of them are a little bit harder to get your head around. But that’s probably made up of a bunch of different things.
Reeher: And on the goods side, are there any patterns of goods that area being exported from the Syracuse area to Britain, some more popular than others?
Allen: Yeah, definitely. So, we’ve got things, for example, like medical equipment and supplies. Navigational measurement instruments is another one of these oddly named categories. Pharmaceuticals and medicines are a big area. Electrical equipment and components is another. Pharmaceuticals and medicines are a big one between the two countries. So, as I said, I’m based in New York City, but we cover the tristate area, and within that area as a whole, pharmaceuticals and life sciences and so on is a big part of that economy. But also in the U.K., we have both very, very large global, multinational companies … but also lots of small, innovative companies doing and pioneering new things. So, that’s, again, an area where, when we’re talking about the future economy and the future economic relationship, that’s certainly a big focus for us, is all-around innovation and healthcare innovation and life sciences.
Reeher: What do you think is the most common misimpression that Americans have about Britain that you regularly encounter as you’re going around and talking to folks?
Allen: That’s a brilliant question. So, I should say I’ve been posted here twice. So, I was in Washington D.C. between 2008 to 10 working at our embassy, and I couldn’t wait to get back. I love being in America, and when there was an opportunity to come back and be based in New York, I jumped at that. I had a son who was born here in 2017 who has dual citizenship – he’s U.S. and U.K. – and another due in June who, I assume, will have dual citizenship as well. And I feel an extra connection to the U.S. now having two of my three children having U.S. citizenship. And, for me, a big reason why I’m so enthusiastic about the job I do is that it really benefits both countries. On your question specifically, on misperceptions of the U.K., I guess a couple. One is it’s not foggy. You’ve got people who are obsessed with the idea that we have lots of fog, which, I’m 40, and I don’t remember there ever being much fog. I think that was probably sort of 50 or 60 years ago, and it was more to do with the level of industry at the time. But we’re not foggy. And the other one is the food. We actually have spectacularly good food now across lots of parts of the U.K., lots of Michelin-styled restaurants and so on, but also, even regular food that you would get in everyday restaurants has actually improved lots. That one I accept probably was the case 20, 25 years ago. I do remember growing up, probably, that reputation was deserved, but no more. And I also say, if your listeners are thinking about where to go on vacation, the U.K. is brilliant. It’s relatively small. New York state is about the same size as just England within the U.K. You can get around easily, we speak the same language, kind of, and the exchange rate, currently, is very good for U.S. visitors to the U.K. That makes your vacation a lot cheaper. So, I would say book now, go now and have a fantastic time in the U.K.
Reeher: What is it that you miss most about London?
Allen: The obvious thing that you miss, actually, most is not a place but more people, so family, it’s a five-hour time difference, seven-hour flight, and people come over regularly to see us. When we find out that I’m in New York and I have a spare room, there’s this fairly long line of people wanting to come and stay. But I think it’s more family that you miss and also my soccer team. So, I know only get to see my soccer team only once or twice a year.
Reeher: Is there one thing that you most admire about the United States? I know that there are things about Britain that you would probably like to import here, but what about the United States do you most admire?
Allen: I would say can-do attitude, entrepreneurialism, can-do attitude and that sense sort of boundless possibility. You visit the U.S., it’s enormous, that sense of optimism and the scope to just do incredible things here.