Brexit prospect gives US 'headache'

(Baonghean.vn) - The US really wants the UK to stay in the European Union (EU). During his visit to London on April 22, US President Barack Obama and eight former US Treasury Secretaries urged the UK to remain a member of the EU, in the context that in just two months the UK will hold its first referendum in 40 years on its future in the EU.

US President visits UK on April 22. Photo: BBC

President Obama said that when it comes to jobs, trade and economic growth, Britain benefits from its membership in the EU.

Mr. Obama believes that leaving the EU - the Brexit scenario - will make it more difficult for Britain to fight terrorism, deal with the migration crisis and face economic shock.

Most independent forecasters say Brexit would cause a shock to the UK economy, the world’s fifth largest. Investors are worried by the rapid fall in the pound this year.

But the main reason the US wants Britain to stay in Europe is because of the commercial benefits that the bilateral relationship brings.

Businesses love London

London is a favorite choice for many international businesses looking to invest, due to its common language, highly skilled workforce, and easy access to the rest of Europe. This market is especially important for American companies, as 30% of the revenue that American companies earn in Europe comes from the UK market.

The US wants Britain to stay in the EU. Photo: BBC

According to a study by financial consulting firm Deloitte, 40% of the world's top 250 largest companies are headquartered in London, while only 8% are in Paris.

In addition, many US banks use London as a springboard for expanding their business in Europe. As a member of the EU, the UK has a “visa” that allows financial companies to provide services to all 27 other countries in the bloc. Therefore, the UK leaving the EU would sever this connection.

Commercial Risk

The US is the UK's second largest trading partner, after the EU. The UK is the US's seventh largest trading partner, after Canada, China, Mexico, Japan, Germany and South Korea.

This relationship is even more important when it comes to services. The UK is the largest foreign supplier of services to the US, and vice versa.

30% of the revenue that British companies earn in Europe comes from the UK market. Photo: CNN

Brexit will change that. The EU and the US are negotiating a free trade agreement (FTA) covering a region of 800 million people.

Brexit supporters argue that Britain will secure its trade deals with the US, China and other major rivals. The US is likely to prioritise an FTA with Europe, which would hurt its bilateral relationship with the UK, as there is currently no FTA signed between the UK and the US.

Bilateral investment

British companies are the largest foreign investors in the US, with total accumulated assets of around £519 billion at the end of 2014. London investment alone accounts for more than 18% of all foreign direct investment (FDI) into the US. And British companies employ around 1 million people in the US./.

Lan Ha

(According to CNN)