It’s been over half a year since the results of the June referendum in the UK initiated a process that would fundamentally change the way the world views supranational organizations. Now, the consequences of Brexit and the resulting shifts in the global political climate have the potential to throw a large wrench into the country’s political climate and prospects for economic stability.
Questions about the scope of the UK’s exit from the European Union from the the British government were finally resolved during British Prime Minister Theresa May’s speech to the EU ambassadors in London on January 17th. “Brexit means Brexit”, May declared, finally dismissing the possibility of a “soft” Brexit that many economic analysts had hoped for. Instead, beginning in March of 2017, the UK will dismantle its ties to the EU, leaving the single market and customs union, gaining the ability to negotiate its own trade terms with other countries as well as the right to autonomously regulate its migrant worker population. The process is set to be completed in two years; however, there will be no formal transitional period during that time. Analysts from The Economist, as well as key British politicians expect a now fully independent Britain to be headed for a “cliff edge” into a world that may not acquiesce to British attempts to restore its position as a major world power as easily as May suggests.
Internally, Brexit will have many immediate consequences for domestic industries. Firstly, May has thus far interpreted the pro-Brexit results of the June referendum as a British vote for more immigration restrictions at the cost of the overall prosperity of the country, despite the fact that there is little actual polling evidence to support this claim. As a result, increased restrictions on immigration and administration of migrant workers into the UK will hit British agriculture hard, as about one-third of agricultural employees are immigrants and migrant workers provided with ease through the EU’s policy of free flow of labour across all member nations. May’s assertion that immigration restrictions will remain at the core of her Brexit plan has worried leaders in many industries and prompted others to prepare to relocate elsewhere. Domestically, loss of the influx of immigrants and migrant workers when the job growth rate in Britain is so high could be the “biggest economic loss of Brexit”.
As far as Britain’s new negotiations with the rest of the world post-Brexit, their success will depend largely on the negotiating skills of May and her government. So far, May has seemed to prefer “no deal” to a deal which doesn’t grant the UK enough concessions. Specifically, May wants a free-trade agreement between the UK and the EU, but has also recognized that the time involved and the commitment of the EU to its “four freedoms” might make favorable negotiation impossible if the EU is too unwilling to compromise. Again, the priority is to get Britain out of the EU as soon and as completely as possible, even if it means the economy will suffer.
Regarding the upcoming changes to the US-UK relationships, May’s recent state-visit invitation to United States President Trump met with much domestic criticism, as shown in a citizen’s position to retract the offer on the basis that the “embarassment to Her Majesty the Queen” would be unacceptable, which gained over 1.8 million signatures. The backlash did more than reveal the very painful and deepening fractures in the British political atmosphere, but has prompted economic and political analysts to call into question the true independence of a post-Brexit Britain. For many, British courtship of the American administration shows that the UK will actually have less control over its international standing. Previously, strong relationships with US Presidents have cost the British government European allies and even brought Britain into the Iraq war, however, it was always with the mutual promise of commitment to strong economic partnership and security. This time, with a highly volatile US President in office, it appears that May is seeking the relationship to prove to the world that the UK has strong allies, which does not bode well for her other promise of full UK independence in the world.
Still, Britain has yet to begin negotiations or leave the EU, and opponents of Brexit argue that as the reality of the exit draws nearer, the economy will suffer, especially if negotiations with the EU are as unfruitful as May seems willing to accept. In a speech to the British House of Lords on February 20th, Tony Blair, former Prime Minister and opponent of Brexit, issued a call to the country to prepare for the possibility of severe negative consequences of such a hard exit from EU membership.
Sources:
- The Economist: “Theresa May Confirms: Britain is heading for Brexit Max”
- The New York Times: “Tony Blair Wants ‘Brexit’ Opponents to ‘Rise Up.’ But Will Anyone Listen?
- The Economist: “The prospect of a state visit by Donald Trump exposes Britain’s varied political geography”
- The Economist: “British firms prepare for a future with fewer European migrant workers”
- The Economist: “Lower immigration could be the biggest economic cost of Brexit”
- The Economist “Six months after the Brexit referendum, where does Britain stand?”
- The New York Times: “Theresa May’s Empire of the Mind”