G20 china_web

P104
Brexit
Larry Summers's view on
and globalisation
Trade and investment
ISTOCK IMAGES
British citizens protest the
referendum result (left)
and a ballot paper (above)
A Union Jack hanging in a British
grocery store in New York
(GDP). But the outlook is gloomy that both
sides will reach an agreement by the end of
2016 and the exit of the UK will make some
adjustments necessary.
Remaining open
and constructive
An EU without the UK will still be the
largest trading partner of the US, accounting
for trade in goods and services of $870
billion. The EU may lose one of its most
outspoken proponents of open markets
and free trade, but it will remain a global
trading power, albeit a slightly smaller one.
However, Germany would lose one of
its closest allies in Europe in the fight for
economic reforms. In a poll taken shortly
before the referendum by the German
news magazine Der Spiegel, 79 per cent of
Germans favoured the UK staying in the EU.
After initially warning that the UK's
withdrawal from the EU should not be
rushed, German Chancellor Angela Merkel
is now urging the UK to move ahead
to avoid a “never-ending game, for the
notification and for the negotiations”.
Italian Prime Minister Matteo Renzi and
ISTOCK IMAGES
French President François Hollande have
also spoken in support of a quick exit to
avoid economic and financial instability.
Merkel, speaking in the Bundestag on
28 June, stressed that in her view, there
must be a “palpable difference” between
members and non-members of the EU.
Despite these frank statements, the
negotiations should remain open and
constructive, for the benefit of both sides.
G20 members can only advise the EU
and the UK to proceed with the negotiations
in a calm and productive manner, in order
to avoid prolonged uncertainty for the
global economy. However, it does have an
important role to play.
The Brexit vote in the UK was mainly
about immigration, partly rooted in a fear
of globalisation and open borders. As a
group that accounts for 85 per cent of
global GDP, the G20 must make a strong
counterargument for globalisation and
open borders.
The G20 needs to engage and create
a positive trade agenda to address these
fears and the long-term challenges we
face in the global economy. G20
We must and will make a
palpable difference over
whether a country wants
to be a member of the
European Union
– Angela Merkel
G7G20.com September 2016 • G20 China: The Hangzhou Summit 173