Brexit and its fallouts
THE poll results in Britain re garding exit from the European Union (EU) reinforces the emerging thought that forces of nationalism are gaining importance. Britain would be the first country to leave EU since its formation but referendum does not mean that it would cease to be a member of EU immediately but the process would take minimum two years. Article 50 of the Treaty on European Union establishes the procedure for a member state to withdraw from the EU by notifying the EU about its withdrawal. The article obliges the EU to negotiate a withdrawal agreement with the leaving state and once the article 50 is triggered, a country cannot rejoin the union without the consent of all member states.
When Britain will invoke Article 50, it would have two years time to negotiate a new treaty to replace the terms of EU membership agreement. EU and the British leaders have to sort out issues regarding trade tariffs, migration and regulation of other things. The only immediate benefit Britain would have after leaving the EU is cost saving as it would no longer contribute in EU budget.
The major issue Britain has to face is regarding trade, being a single market no tariffs are imposed on trade between EU member states. Britain’s fifty percent exports go to EU states. Britain has not only been playing role in policymaking but has also been benefiting from trade deals between EU and other powers. Some leaders argue that Britain could follow the example of Norway that is not a member of EU but in return for abiding by a number of EU rules has favourable access to European Common Market. Given the fallouts of Britain’s exit from EU and serious challenges faced by unity of EU, Britain may not get a more favourable agreement because it may embolden the critics in other EU member states who also desire to leave the EU.
EU offered greater benefits for immigrants and business community. Since joining the union in 1973, the UK attracted thousands of immigrants from the EU states. As a single economic market and supranational political body EU has been responsible for legislating and implementing economic reforms for the union. This fact resented the Boris Johnson, former London Mayor and front-runner to be the next Prime Minister has been the leading supporter of leaving the EU. He said that Britain now had a glorious opportunity to pass its own laws, set its own taxes and control its own borders. The pound fell to its lowest level against the dollar since 1985 and in the coming weeks, the uncertainty regarding precarious economic situation may affect financial position of UK as the fifth largest economy.
The implications of Britain’s exit would be far reaching; the global financial markets would stabilize soon but deeper implications of Britain’s exit for EU, these would be immense. EU has been a symbol of inclusive politics and shared values for the rest of the world. Initially, its success as an economic regional bloc and later on its enhanced political clout in global affairs has been defining factor in inspiring developing states to form regional unions like EU. How EU would be able to maintain its unity as a regional bloc and how would it exert its influence in global affairs because EU-3 (Britain, France and Germany) economically and militarily are among the leading countries and these three states are the core (center of power) in EU. Britain and EU both have to face this dilemma.
The polling results showed polarization and societal divide among the people. Majority of younger generation voted in favour of EU membership while older people voted in favour of leaving the EU. Similarly, Scotland and Ireland favoured the ‘remain camp’ and Scotland’s First Minister indicated that Scotland may call for a second referendum for independence. Apart from facing internal challenges, Britain has to relocate its position and political status in the global hierarchy of power. How it is going to assert itself in the global politics? — The writer works for Islamabad Policy Research Institute, a thinktank based in Islamabad.