2022 World Affairs Council of the Year
Network of Independent World Affairs Councils of America
The World Affairs Council was pleased to collaborate with the International Business Council of the Nashville Area Chamber of Commerce and the Belmont University Center for International Business to bring a timely and important panel on the implications of the United Kingdom’s impending exit from the European Union. We thank the panelists for their contribution of insights and perspectives on this issue. Here for your consideration is a summary of the panel.
BREXIT AND THE U.S. ECONOMY: WHAT TO EXPECT
When voters in the United Kingdom shocked themselves and other Europeans this summer with the choice to exit their decades old political and economic union, the so-called “Brexit,” it caused a wave in currency and stock exchanges around the world as well as toppling the British prime minister. The markets have largely settled out after the surprising prospect of a looming tectonic shift in European Union (EU) dynamics but the implications are yet to be fully understood especially for the American economy.
U.S. Federal Reserve Chief Yellen responded to Brexit noting it “would negatively affect financial conditions and the U.S. economy.” How so? What does the exit of the United Kingdom mean for the United States’ economy? How will the $280B annual U.S. trade with the bloc be affected? What lies ahead in a new trade relationship with the UK? What does it mean for Nashville businesses?
A distinguished panel of specialists took up the questions of Brexit and the U.S. economy at a special presentation on August 16th hosted by the Nashville Chamber of Commerce. Thad McBride of Bass, Berry and Sims moderated the panel that included Dr. Marieta Velikova, Professor of Economics at Belmont University, Amr El-Husseini, Lodestone Advisory Group CEO, and John Scannapieco, shareholder at Baker Donelson’s Nashville office and a co-leader of the firm’s Global Business Team.
The event was presented by the International Business Council, the Tennessee World Affairs Council, and the Center for International Business at Belmont University.
The panelists generally agreed that the UK economy will eventually regain its footing, however, they disagreed on how long that will take and how best it can be achieved. McBride summarized the view based on their remarks and audience questions that it was clear that uncertainty still reigned two months after this historic vote. About the conclusions he said, “There may nonetheless be opportunities for US companies to invest in or extend operations in the UK, particularly given the weak British pound and the fact that the UK continues to be an important jumping off spot for doing business in North Africa, the Middle East, and even Europe.”
The conversation about opportunities turned to the Nashville perspective. Lodestone CEO El-Husseini made three points: “First, foreign capital movement away from the UK will seek a safer home and the U.S., especially a city like Nashville, may play an important role in attracting some of this capital.” He added, “Keep an eye on investors. We believe there will be a number of very attractive valuations for American medium to long-term investors in various UK economic sectors due to the volatility of the stock market, the devaluation of the British pound, and the performance of the economy as a whole.” El-Husseini’s third point was that, “Some of the existing operations of U.S. or international companies now operating in the UK are already discussing the possibility of relocating elsewhere.” He added, “Nashville could play an important role in attracting some of those opportunities.”
Financial services are going to be a key industry affected by the results of the Brexit talks according to Professor Velikova. She said, “Businesses are being proactive and hedging on the outcomes of negotiations between the UK and European Union.” Velikova added, “It is key to understand all the economic, financial, regulatory and supply chain complexities to be prepared for challenges, and capitalize on opportunities that present themselves.”
The importance of the UK-EU negotiation environment was affirmed by Baker Donelson’s Scannapieco who said, “Brexit may cause short term volatility in the UK, Europe and elsewhere due to the uncertainty ahead, but stability will begin to return once the UK government announces its negotiation position in early fall and the EU responds, and the parties commence talks regarding the UK’s exit.”
What should American business people be prepared for when they contemplate the post-Brexit environment? “For US companies currently operating in the UK,” said el-Husseini, “We believe this is a good time to go back to the drawing board a re-evaluate their business model, activities, and make longer term decisions that can extend beyond the next couple of years.”
The factors that have made the UK a great place to do business before Brexit still stand, said Scannapieco. He noted its attractions, “Low corporate tax, flexible labor markets, competitive business environment, English language, common law and a strong skills base. Businesses that do not panic, but remain flexible will not only survive, but should thrive.”
The Brexit panel collaboration of the Nashville Chamber’s International Business Council, Tennessee World Affairs Council and Belmont’s Center for International Business was one of a regular series of programs that bring voices of specialists to Nashville audiences in response to global issues that affect community leaders. Lori Odom, IBC’s Director said, “We were pleased to see the enthusiastic turnout by business leaders and officials such as Congressman Jim Cooper for this event.” She added, “It demonstrates the importance of the global economy for Nashville and the need to bring insights and perspectives to our decision makers.”
The International Business Council is comprised of a cross section of the region’s international business leaders. This voluntary group serves as advisors to the Chamber and as advocates for international businesses operating in or considering investing in Middle Tennessee.
The Belmont University Center for International Business creates international trade and business awareness, knowledge, and opportunities for its stakeholders through excellent teaching, research and service.
The Tennessee World Affairs Council is a nonprofit, nonpartisan educational organization that seeks to educate and inspire the communities it serves to “know the world.” It builds global affairs awareness through community speaker programs and education outreach as described at TNWAC.org.
The Tennessee World Affairs Council is a nonprofit (501c3), nonpartisan educational charity based in Nashville that works to build understanding of global issues in our communities. Learn more about the Council and find how you can join, donate and volunteer at: www.TNWAC.org — Join / Donate / Volunteer
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