Photographer: Chris Ratcliffe/Bloomberg

U.K. Exit From EU Would Have Big Effects: EU Trade Chief

Britain could severely jolt the European Union if it were to leave after a popular vote, the 28-nation bloc’s trade chief said.

“If they choose to leave it would have tremendous effects,” EU Trade Commissioner Cecilia Malmstroem said in an interview. “But we’re not there yet.”

So far, Thursday’s U.K. election and its potential to trigger a popular vote on EU membership hasn’t affected subjects such as a proposed trade deal with the U.S., Malmstroem said Tuesday in Washington, where she met with U.S. Trade Representative Michael Froman, to discuss the Trans-Atlantic Trade and Investment Partnership.

“There’s a lot at stake, first of all for the British people, and then whether or not they will have a referendum or not,” Malmstroem said, referring to the vote this week.

“It would be very sad if the U.K. chose to leave the European Union,” she said. “I hope they choose to stay. We need them and they need us.”

U.K. Prime Minister David Cameron’s promise to put EU membership to a vote has strained relations with Germany, prompting allies of German Chancellor Angela Merkel to pin their hopes on a win for the opposition to kill the specter of a referendum.

Malmstroem said the EU plans to keep all of its members, including Britain and Greece. Asked about the commission’s last-ditch efforts to strike a deal between Athens and its creditors, Malmstroem said there are no plans to stop looking for a solution.

Greece Efforts

“It is complicated with Greece, but everybody’s making an effort to try to find a way forward,” she said.

On the subject of investor-state dispute settlement, a topic that has drawn increased scrutiny from critics on both sides of the Atlantic, Malmstroem said the talks with Froman only addressed procedural aspects.

Malmstroem is set to appear before the European Parliament on Wednesday to discuss the EU’s latest position paper on the dispute mechanism. That paper, produced outside the TTP negotiations, calls for bilateral trade talks to continue while the EU also works to establish an international investment court and appellate mechanism.

“We’re not creating a big bureaucracy,” Malmstroem said of the proposal, which would require strong international support to get off the ground.

“If you want to have something that is considered as legitimate, it makes sense that there are also conditions for an appeal mechanism,” Malmstroem said. “Exactly how this is going to be built up, we don’t have all the full answers yet, but the notion makes sense.”