In: Economics
The United Kingdom (Great Britain) has left the European Union known as BREXIT. Analyze and summarize the impact BREXIT will have on the European Union Nations, their objective moving forward, and changes to the economic and political role.
Brexit is the June 23, 2016, referendum where the United Kingdom voted to leave the European Union. The residents decided that the benefits of belonging to the unified monetary body no longer outweighed the costs of free movement of immigration. Brexit is the nickname for "British exit" from the EU. The vote was 17.4 million in favor of leaving versus 15.1 million voting to remain.
On March 29, 2017, the U.K. Prime Minister Theresa May submitted the Article 50withdrawal notification to the EU. It gave the U.K. and EU until March 29, 2019, to negotiate an agreement. The EU has extended that deadline to October 31, 2019.
The Brexit vote has strengthened anti-immigration parties throughout Europe. As a result, Germany's Chancellor Merkel has already announced she will not run for re-election. If these parties gain enough ground in France and Germany, they could force an anti-EU vote. If either of those countries left, the EU would lose its most robust economies and would dissolve.
On the other hand, new polls show that many in Europe feel a new cohesiveness. The U.K. often voted against many EU policies that other members supported.
The agreement May negotiated has two parts. One is the binding withdrawal agreement. The other is a non-binding set of principles to guide future negotiations.
Under the plan, the U.K. remains within a "customs union" with the EU for an unspecified period. This continues the trade that both parties wanted. The two sides will not impose tariffs on each other's imports. They are free to tax imports from other countries. Critics want the freedom to negotiate separate trade deals with other countries.
The U.K. retains complete access to capital. The 3 million European nationals living in the U.K. can continue to live and work in the country without work visas. The 1.3 million U.K. citizens can continue to do the same in the EU.
The U.K. would also abide by the European Court of Judgment and EU laws. But, since it's no longer a member of the EU, the U.K. can no longer vote on the laws. That is similar to Norway's relationship with the EU. But critics oppose this arrangement.
Since the U.K. remains in the EU customs union, it prevents a "hard border" between northern and southern Ireland. Northern Ireland is part of the U.K. and southern Ireland is an independent country and a member of the EU. Until 1998, this was a militarized border due to sectarian violence that left more than 3,500 people dead.
But once the transitional period is over, this issue must again be confronted. The U.K. could only leave the customs union if it negotiates a trade agreement with the EU that eliminates border controls in Ireland. It might also find a technological solution that avoids border infrastructure.
The deal is similar to the "Jersey deal" offered by the European Council on August 9, 2018. The deal would keep the U.K. in the single market for trade while allowing it to restrict immigrants. In return, the U.K. must abide by all EU environmental, social, and customs rules. The deal is what the British dependency of Jersey already has. It would avoid borders between Northern Ireland and the U.K. or Ireland.
If the deal had been approved by Parliament, then the U.K. and EU would draft a detailed trade declaration. Another EU summit would rule on that declaration. Any plan must then be approved by the European Council, the 20 EU countries with 65% of the population, and the European and U.K. Parliaments.
Once those major hurdles were overcome, then the U.K. would copy the EU laws into its laws, which can later be amended or repealed.