MAKANI CHRISTENSEN (D) CANDIDATE FOR U.S. SENATE RESPONDS TO THE RESULT OF BREXIT
June 24, 2016, Honolulu, HI—Locally Grown, Combat Veteran, Business Owner, Ocean Expert, Makani Christensen announced today that he is happy that democracy has been honored in the UK with the majority of its population in England and Wales voting to leave the UK, but feels they have set a difficult path for themselves with Northern Ireland and Scotland voting majority to remain, and the global and regional economic impact all creating a tremendous amount of uncertainty - particularly for its greatest ally, the United States. The path is uncertain, and most likely complicated and lengthy. The precise impact it will have on US-UK, and US-EU relations is another unanswered question, but, in the short term at least - nothing will change. Predominately because the referendum is not legally binding and still requires an Act of Parliament. With Prime Minister David Cameron announcing that he will be stepping down, and a new leader for the Conservative Party, and the country, will step in to manage the Brexit conversation with Europe from October on. The concerns we should primarily be focused on are two-fold: economics - particularly trade with the Asia-Pacific area, and US-UK-EU relations and security measures.
We expected that all markets would be a rollercoaster should the Leave campaign be victorious, and indeed, today's over $2 trillion being wiped off the market supported that concern. Today we are witnessing the, US, European, and Asian markets falling because of the uncertainty of the UK’s transition to being independent of the EU and needing to renegotiate all of its economic and security oriented deals. As of 10AM Hawaii Time, the Dow Jones has closed over 600 points down at 17400 because of all the uncertainty surrounding the UK's exit from the EU and the pound was trading at a 30 year low. This type of uncertainty will continue until the UK’s transition out of the EU is complete, potentially by 2020, or later.
The issue Hawaii faces is how this impacts trade with both American and Asian economies. The trade between EU, the U.S., and Asia combined is about 48-55%, and we will not know how trade will be impacted for possible several years, as the negotiations for the exit will take a minimum of two, as set forth in Article 50. For example, Japan makes up about 8% of the Asian trade with the EU, but they have a shrinking and aging population, with huge government debt. How will this impact Hawaii’s tourism industry? Simply put, we don’t know how the Brexit will impact Hawaii’s economy until the effects of Brexit are seen in Japan’s economy.
Security is another issue of concern for Hawaii through the US relationship with the UK and the EU. While the UK has always maintained an independent military and intelligence community from the EU, the common links did foster a strong relationship with such nations as France and Germany, as well as Spain, Italy and Greece in dealing with Europe wide security matters, as well as global security issues. The separation of the UK from the EU will have an impact on that collaboration, however, it is unlikely that the US-UK intelligence sharing will be impacted in terms of cooperation, but the information may not be what it once was if EU members are unwilling to share with the UK what they once did more openly and then the UK passing it on to there American brethren.
The global impact of Brexit is raising concern, as it should, because there are so many unknown variables. My concern is the separation of the UK from the EU will have a dramatic impact on the US economy, intelligence sharing, and military coordination - all of which have a trickle down effect to us here in Hawaii. The effects of the Brexit will not be felt immediately here, but the very real concern about how trade with Asia will be affected is very real for us, because costs there could reduce our tourism, which makes up 21% of Hawaii’s economy and military assets could suffer as well as a result of reprioritization. Hawaii cannot afford to reduce our tourism, or military, as those two industries provide a stabilizing economy. Brexit has yet to determine if it will be a good or bad lasting impact on the world, but for now, while there are no immediate effects for us, I will be keeping an eye on it because what affects one portion of our economy, no matter how remote, could affect it all.