Brexit or ‘British exit’ has been a complicated and iridescent process, jettisoning a 47-year-old historic relationship built from the ashes of world war ii. The UK has been the largest contributor to the EU trade, etching a profound impact on both economies. Drastic changes have been incorporated to compensate for the unforeseen contingencies that both countries are prone to. Apropos to a referendum that the ‘vote leave’ camp won by 52%, Britain became the first country to leave the EU alliance and negotiations. Britain’s formal departure on 31 Jan 2020 attracted several views, supporters, and opponents as well. The supporters celebrated the restoration of political sovereignty of the UK, while the opponents highlighted the exit as the starting of a terrible setback to this inextricable alliance. Since its formal departure, several alternatives have been brought to action to ensure the smooth functioning of the trading system.
The UK is no longer a part of the single market and customs union with the EU, instead, it is secure in a trade agreement with zero quotas and zero tariffs befitting the rules of origin. Free movement with whatsoever no hindrance has ended between the UK and EU. People traveling between the EU and the UK must show their passports to enter their respective destinations. The acute repercussion of Brexit is the impact on the UK’s economic growth. While the entire process has been precarious, the degree of impact on the outcome is also influenced by this uncertainty. The value of the British pound on referendum fell from $1.48 to $1.36 the other day. Earlier constrained and fulfilled by the EU, The UK must form trade negotiations with other countries and cope up with the predicted fall, perforce, in the coming years.
The Brexit vote reignited the border troubles with Ireland and Scotland. Contemplating upon ‘soft’ and ‘hard’ Brexit options, several methods have been devised to ascertain the future implications of the UK trade. These implications include polar options, from an arrangement of governance by WTO to the creation of US-UK trade excluding the EU. Performing pragmatic calculations and key observations, several experts have adduced the effects to be chiefly fluctuating. The key finding is to determine the degree to which these effects are likely to be negative. The UK is likely to brook the losses if it fails to establish a post -Brexit relation with the EU. The option of breaking all ties with the EU and simply being patronage of WTO would result in a further drop in the UK economy. This implies that a relationship with the EU is assuredly required for the UK economy to stay afloat. The US will be impacted marginally by Brexit but is likely to gain if any trade agreement of the US-UK is put into place.
However, the US will likely miss the advantages of foreign policy and influence asserted by the UK in the EU decision-making process. With the withdrawal of a robust economy, the EU will seek to follow measures that will result in zero-demerits and discourage the probable exit of other members. This poses another problem for the UK, as it is necessary for its economy to be buoyant by looking out for maximum advantage. The restrictions faced by the individual organizations to save themselves from further losses will complicate the negotiation process. With evolving trends and vicissitudes, it will be engrossing to find out the denouement of the historic decision.
