A well-known billionaire Wilbur Ross that will be in charge of negotiating a trade deal with the U.K. called Brexit a "God-given" opportunity to take advantage of the country's vulnerable economic situation.
Wilbur Ross, a billionaire with a fortune of about $3 billion, was recently chosen by the U.S. president-elect Donald Trump to join his incoming office as a new chief of trade. The 79-year old businessman has a long track record of successful business activities and is known as the "king of bankruptcy", a nickname that refers to his achievements in recovering bankrupt companies that made him and his private-equity firm W.L. Ross & Co.a fortune of billions.
Ross was one of the architects of Trump's pro-American trade policy and, as part of his future position as the Head of the U.S. Commerce Department, he will be responsible for reaching an agreement on a free trade deal with Britain. However, the holiday report of The Times revealed some comments made by Ross prior to his appointment as Trump's trade chief that question the motives of the U.S. administration.
According to The Times, the businessman told a group of Cypriot financials a few months ago that the current post-Brexit "period of confusion" in the country is a "God-given opportunity" for the rivals to draw businesses away from the country.
“I recommend that Cyprus should adopt and immediately announce even more liberal financial service policies than it already has so that it can try to take advantage of the inevitable relocations that will occur during the period of confusion,” The Times quoted Ross saying.
He also mentioned such European cities as Dublin and Frankfurt to be the ones to benefit from this opportunity as the biggest banks located in the City of London fear the country's separation from the single European market. The Huffington Post cited the Labour Party saying that these newly-discovered comments of Trump's ally should serve as a warning that other countries are interested in taking advantage of Britain's vulnerable position.
The Times story created a dissonance among the British politicians because of Ross's future position as a key figure in the trade deal negotiations between the two countries. The businessman's comments sparked speculations that the U.S. may seek to exploit the current economic situation to steal business from the U.K. For the country, the trade agreement with the United States is a very important part of their post-Brexit political agenda as the U.S. is Britain's biggest single trading partner.
“Wilbur Ross’s comments are a stark reminder that the trade deals Britain will agree in future will not depend on goodwill from our partners, but on their own shrewd political and economic calculations. Theresa May’s government has failed to articulate a coherent vision of what kind of economy Brexit Britain will be. This makes us weak and vulnerable in the eyes of others," the shadow international trade secretary Barry Gardiner told The Times.
Britain's trade worries are also aggravated by the "Trump trade doctrine" that was supported and promoted by Wilbur Ross. The doctrine says that every single new trade deal made by the U.S. must reduce the country's trade deficit, support manufacturing and economic growth. This would be a difficult condition to meet for the U.K., considering that it has a trade surplus with the U.S.
“I favor world trade myself. A lot of our businesses engage in international trade. But over the years I’ve also learned quite a few of the trade deals that we’ve made have been just plain bad deals. There’s nothing inconsistent with being an advocate of trade and yet saying you need to do deals that make sense,” Ross told the Wall Street Journal in an interview.
It is the combination of heavy uncertainty around Britain's political course that has been keeping major businesses, especially financials, in confusion for months and the aggressive foreign trade plans of the incoming Trump's administration that create this conflict of interests. However, it is yet to see whether there will be a problem with the trade deal negotiations between the countries, as a number of experts previously believed that the United Kingdom would actually benefit from Trump's plans to renegotiate NAFTA with Canada and Mexico.