UK needs to ‘scramble’ in trade negotiations: Fmr. commerce secretary
The United Kingdom's vote to leave the European Union will force the country to redraw some 43-year old trade negotiations. According to former U.S. Commerce Secretary Carlos Gutierrez, the U.K. needs to act soon to stem the bleeding.
"They need to scramble because their economy is going to be in deep trouble," Gutierrez told CNBC's "Squawk on the Street" Monday. "The one thing that is certain here is that the U.K. economy is going to go into a dive and it's going to happen very quickly."
The United Kingdom, as a part of the European Union had access to the single market, which guarantees the free movement of goods and services between the 28 members. The U.K. will need to start campaigning for free trade deals to make up for the loss, Gutierrez said.
"They're going to lose that preferential treatment," Gutierrez said. "They've got to get moving quickly they have to start making it attractive to invest in the U.K."
Fifty percent of the United Kingdom's exports go to the rest of continental Europe, he said. A Brexit vote means the loss of this preferential treatment for half of their current exports.
Unless the EU changes its regulations, Gutierrez said, this is bound to happen with other countries. Governments in other EU countries have called for similar votes in the wake of Friday's Brexit. Marine Le Pen, president of the conservative "National Front" party called for a similar referendum on Twitter saying "we must have the same referendum in France and in the countries of the European Union."
Gutierrez laid some Brexit blame for the U.K.'s leave on the European Union.
"They went too far I think, they became a political union they overplayed their hand," he said, citing a number of regulations. "The number of new rules coming out every day in Europe it makes it stifling to do business."
The EU may be dismantling at the same time as Asia is coming together as a regional bloc, Gutierrez said.
"If there's a lesson here, it's what is Europe going to do to avoid this?" Gutierrez said. "It's just going to continue to happen and I think they overreached."
He said if anything, the Union may need to take a step back.
"I think they need to pull back a little bit, see Europe as a commercial project and not continue down the path of making it a political project because they're just sparking all these populous fears."