Obama says he respects Brexit decision, relationship with Britain will endure

United States President Barack Obama said he respected Britain's vote to leave the EU, and that the United States' relationship with Britain would endure.
United States President Barack Obama said he respected Britain's vote to leave the EU, and that the United States' relationship with Britain would endure.PHOTO: EPA

WASHINGTON (REUTERS) - President Barack Obama said on Friday that strong US ties to Britain and the European Union would endure after British voters chose to leave the EU in a referendum that sent US officials scrambling to contain political and economic fallout.

“The people of the United Kingdom have spoken, and we respect their decision,” said Obama, who had argued passionately for close Nato ally Britain to stay in the group.

“The United Kingdom and the European Union will remain indispensable partners of the United States even as they begin negotiating their ongoing relationship,” Obama said in a statement.

Britain’s decision at a referendum on Thursday forced the resignation of Prime Minister David Cameron and dealt the biggest blow to the European project of greater unity since World War II.

The vote threatened to damage the US economic recovery, hurt Obama’s trade agenda and made it more difficult for America’s Western allies to face challenges such as Islamic State in Iraq and Syria (ISIS), the rise of China and climate change together in the Democratic president’s last months in the White House.

Obama administration officials are also casting a wary eye across the Atlantic at the success of Britain’s “Leave”campaign, which has similarities with Republican Donald Trump’s insurgent bid for the Nov 8 presidential election.

Obama, during a visit to London in April, had warned against Brexit, or Britain’s exit from the EU, in an unusually strong intervention into British politics.

“I must say we had looked for a different outcome. We would have preferred a different outcome,” US Vice-President Joe Biden, travelling in Ireland, said on Friday.

Biden, in remarks prepared for a speech at Dublin Castle, took a swipe at Trump who won the Republican nomination by highlighting some of the issues, particularly immigration, that appear to have won support for Britain’s “Leave” campaign.

Without mentioning Trump by name, Biden warned against“politicians and demagogues peddling xenophobia, nationalism, and isolationism.”

TRUMP ON BREXIT

Trump thrust himself into the heart of the Brexit issue, calling the result of the vote a “great thing” and drawing parallels to his own unorthodox presidential campaign.

“People want to take their country back. They want to have independence in a sense. You see it with Europe, all over Europe,” Trump, 70, said in Turnberry, Scotland where he reopened a golf course.

Obama hopes his former secretary of state Hillary Clinton will win the November election and safeguard his legacy but economic volatility in the United States after Brexit could hurt her chances of beating Trump.

In response to Britain’s decision to leave, Clinton said the United States must first safeguard against any economic fallout at home at “this time of uncertainty” and underscore its commitment to both Britain and Europe.

With the Brexit result rattling Wall Street and other markets around the world, the US Federal Reserve sought to calm global financial markets by saying it was ready to provide dollar liquidity following the British vote.

After Brexit, the US central bank’s ambitions for two interest rate rises this year now look unlikely. Traders of US-interest rate futures even began to price in a small chance of a Fed rate cut, and now see little chance of any hike until the end of next year.

“One can forget about rate hikes in the near term,” said Thomas Costerg, New York-based economist at Standard Chartered Bank. “What I’m worried about is that the Brexit vote could be the straw that breaks the back of the US growth picture.”

The historic divorce launched by the Brexit vote could sink hopes of a massive US-EU free trade deal before Obama leaves office in January.

Negotiations on the Transatlantic Trade and Investment Partnership, or TTIP, were already stalled by deeply entrenched differences and growing anti-trade sentiment on both continents.