Brexit: Economic Doomsday or Opportunity?
How much the UK relies on trade with Europe and how the Brexit might impact several industries and trade agreements if it is implemented? What’s the current business situation? At the time of this writing, British Prime Minister Theresa May is preparing to come back before Parliament with a revised EU “Brexit” deal.
The UK voted in June, 2016 to break away from the European Union; the vote won by a slim margin (51.9%). The decision has been a hotbed of contention in the UK and on the world stage of opinion ever since, with those opposed foreseeing economic sturm und drang for the citizens of the island should Brexit actually take place, as it’s still scheduled to do on March 29th. May has said that she will present a revised deal by no later than February 13th.
When focusing on international trade; numbers show that the UK is an island that relies highly on importation from the EU as it is their primary trade partner. If the Brexit takes place in March as it is supposed to, it will have a strong impact on the cost of life of the Brits as the prices of exportations and importations will increase.
As for now there is still no deal and things are still unsure for business owners and trade agreements. Without an agreement on trade, the UK would trade with the EU under World Trade Organization rules.
The administrative process remains blurry for UK citizens living in the EU, and EU citizens living in the UK.
Report Linker found that the imagined economic doomsday might not be such a sure thing. Total exportations across all industries going from the EU to the UK accounted for 26.6 billion euros as of January, 2018, a full year and a half after the Brexit referendum passed.
Furthermore, when selecting specifically for the highly important industry sector of “food, drinks, and tobacco”, ReportLinker’s data show that it accounted for nearly €3 billion in January, 2018 and €3.1 billion in June, 2016. When selecting for “manufactured goods”, the data show that the sector accounted for €23.2 billion in June 2016 and €21.3 in January, 2018.
Total importations across all industries going from the UK to the EU accounted for 16.2 billion in Jan 2018 and 15.3 billion in June 2016; there was no significant drop in business.
“Food, drinks, and tobacco” accounted for €1.3 billion in June, 2016 and €1.2 billion in January, 2018. Manufactured goods going from the UK to the EU accounted for €11.9 billion in June, 2016 and €12 billion in January, 2018.
The bottom line is that the looming Brexit has not affected trade between the UK and the EU in any meaningful way according to currently available data.
Nevertheless, many members of the British Parliament remain opposed to Brexit. Prime Minister May has been defeated in trying to get her proposed “severance package” approved by Parliament. This contractual agreement, which would set the terms of the UK’s “divorce” from the EU, is all-important for determining how Brexit would affect UK business’ trade deals with the remaining EU member nations as well as the lives of Brits working or living abroad in Continental member nations. In addition, it will set the amount of money that the UK must pay the EU to sever its ties with the multinational government.
The biggest sticking point in the resistance to finalising a deal involves trying to avoid the return of a physical Northern Ireland border.
Those who are in favor of Brexit say that the UK’s citizens and industries lack liberty and cannot thrive while under the thumb of the heavy-handed EU. While aware that there would be initial economic disruption and possible hardship should Brexit go through, they say that the UK would quickly recover and then be better off economically and politically. However, opponents of Brexit say that the economic ramifications would be catastrophically negative for the island nation’s citizens, and may put the UK into a financial depression for a long time to come.
On the 13th of February, MPs will again be able to suggest alternatives, including, for example, delaying Brexit or holding another referendum.