Written by: Tommy M.
The fight over Brexit has cost the Prime minister her job, created intense political divisions within the country, and has undermined Britain's reputation with the E.U. as well as the rest of the world. The U.K. made the decision to leave the E.U. in a referendum held in 2016 and now parliament is trying to figure out the best way to go about the exit without hurting the Economy. Hard brexiteers believe that the U.K. should crash out of the E.U. with no transition period and no cushioning. The evidence is clear however that a hard brexit would devastate the economy and cause massive turmoil.
To understand Brexit we first have to understand what the E.U. is and why the U.K. leaving is such a big deal. The E.U. is an economic and political partnership made up of mostly European countries that formed following WW2. The original goal was to intertwine markets and allow countries to easily trade amongst each other as they would then be less likely to go to war. It has slowly morphed to become a single market which means that goods and services can move around Europe as if it were one Country.
The big concern for the U.K. is that leaving the E.U. without a transition plan would cause tariffs on imports into the U.K., and would disrupt the flow of imports causing shortages of food and medicine. To put it bluntly; a no deal brexit, that is a brexit without a transition plan, would spell disaster for the Country.
U.K. industries that rely on exports would see a significant loss in business caused by an increase in tariffs on goods being exported to other E.U. countries. The Foreign auto industry, for example, is a large part of the UK's economy however brexit would cause the price of exporting these vehicles to skyrocket leading to a higher price tag.
Imports would also see an increase in tariffs as well as new regulations on goods and services which would mean imports would have to pass more tests and take longer to get into the country. In the short run, the government fears this would cause shortages of food, specifically fresh produce, and medicine.
To negate these effects, those who oppose a hard brexit have offered to negotiate a permanent customs union with the E.U. after brexit. This would allow the U.K. to regain control of its trade policies while also ensuring that there would be no shortages of food or medicine, and would ensure employment doesn’t significantly decrease.
Moving forward it is impossible to know which route the U.K. will decide to take. However it is very clear which route is the safest bet for their economy. Most experts and economists have endorsed a soft brexit for the simple reason that a hard brexit would clearly devastate the U.K.
One of the biggest problems with Brexit is the Irish Border problem. After the end of "The Troubles" with the Good Friday agreement the UK and Ireland agreed that there would not be border enforcement between the two countries on the island of Ireland. This has resulted in more economic integration and ended the violence that plagued the two sectarian groups. If a border is instituted it risks hurting investment in Northern Ireland if violence once again erupts between Protestants and Catholics.
ReplyDeleteI think that the United Kingdom needs to be very careful with the strategy they chose because of the possible economic downfall. I would have to agree with "most economists" and chose the soft brexit if it is really going to be the best choice for the U.K's economy. The new taxes and tariffs on goods will hurt the economy of the U.K but I think that with the soft brexit plan it will a safe move.
ReplyDeleteYour explanation of what was happening was beautifully written. I think that if the UK leaves the EU without a transition plan, it’s just asking for a mess in terms of their imports which will in turn affect their economy. The fact that Brexit has done so much damage over the country already is alarming and it only seems to cause more.
ReplyDeleteIt is quite clear from the polls of the British people that the hype of Brexit has largely faded. Those who voted for it are regretting the great economic stress that are now facing their country. In addition, their politicians have underestimated the divisiveness of the issue, especially Theresa May. She believed that her proposal was going to be accepted, but was shot down. Then she threatened to resign should a deal on Brexit not occur, another bluff gone wrong. Now Britain is on a timer, they have to come up with something soon, as the deadline for leaving was March 29th of 2019. They must prevent a hard leave though, as their stock market and almost all economic markets would be severely affected, as you stated in your essay. And you are completely right in saying that there needs to be a way the Britain can leave without economic turmoil, because all of those negative consequences would land not on the EU, but Britain. With their markets failing, the government may also try to print more pounds, leading to more inflation in the country as well, further weakening the economy. Also, their whole deal with Ireland confuses the situation even more. When they opened the borders, the British and Irish economic markets became pretty intertwined, and so not only would the British markets fail, but also the Irish markets. I hope the British parliament can come to a solution soon, but none seems to be in sight.
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