Brexit and a now possible EU-calypse

control immigration from Europe while retaining as much access to the common market as possible. The costs of remaining in the integrated market in a ‘soft option’ will mean contributing to the EU budget and accepting free movement of labour, but May wants a ‘bespoke deal’ uniquely for UK. A ‘hard exit’ will be easier by repealing the European Communities Act of 1972 as a starting point, but the Remainers in parliament, who number 75 percent, have their feet firmly on the brake pedal. Theresa May has no wish to be undermined by a Commons vote against Brexit, so takes her mandate solely from the referendum result.

Mrs May has set March 2017 as the start date for the negotiations. Germany, France and Holland have elections next year, in each of which there is growing anti-EU sentiment. In fact, there are reports out there claiming the year 2017 will see a symbolic end of the European Union with Frexit already hitting headlines after far-right Marine Le Pen pledged t o hold a UKlike referendum in France. German too has warned that Netherlands, Austria, Finland and Hungary could leave the group. The collapse of such a massive economic bloc could have an impact worldwide — of unseen proportions. To outflank the rising influence of eurosceptics, EU officialdom wants to drive the hardest possible bargain with UK, which may argue for a transitional period of five years or more to conclude a Free Trade Agreement. If there is no FTA, UK will be in the same position as USA, India or China facing tariffs and non-tariff barriers.

Indian business is divided. Indian firms have invested heavily in the United Kingon and will face problems to access the common market. Relocation is something they definitely want to avoid. Others hope for a reduction in tariffs and nontariff barriers with UK renouncing EU standards. Garment exporters, for example, who face an EU rate of nearly ten per cent, are anxious for a separate UK agreement.

Brexit, demonetisation and President-elect Trump’s success in USA are cases of ‘first time ever’. There is no road-map ahead; most of the narrative is about economic consequences that no one can anticipate. Trump’s election reveals the alienation of the underprivileged about economic inequality and having living standards eroded by globalisation. As with Britain, there is the concern that immigrants and outsourcing are taking away jobs from local citizens. — The writer is a retired Indian diplomat, scholar, author, former Indian Foreign Secretary, and Deputy Secretary-General of the Commonwealth of Nations