The World After Brexit
Nine months on from the landmark Brexit vote, Prime Minister Theresa May has marked a huge milestone in British history invoking Article 50 of the Lisbon Treaty this week. The letter has officially launched two years (and likely more) of negotiations between the European Union and the UK, which will reshape the future of millions of people across the world.
As the government aims to secure what Brexit Secretary, David Davis, has described as a “new, positive partnership between the UK and our friends and allies in the European Union”, SinoScan takes a look at what lies ahead for the world in the events leading up to, and following, the UK’s path to independence.
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Despite negative pre-Brexit predictions, the UK has proved that, if anything, it is resilient when it comes to continuing strong performances in the world of business. According to The Times, Britain ended 2016 as the strongest of the world’s advanced economies, with growth accelerating far beyond initial thoughts in the final half of the year. As well as hitting a 17-month high in terms of business activity in December, the economy grew by a total of 2.2% for the year – stronger than other nations including Germany, the US and Japan.
Whilst a slowdown is still a strong possibility in the coming months, the performance of the economy so far has been a reproach to the Treasury and Bank of England’s warning of, what The Times described as, “dire consequences”. Commenting on the forecasts, MP Steve Baker said: “this is another moment to reflect that the horror stories that we were told simply didn’t come to pass.”
Since August last year, figures from the Manufacturing Purchasing Managers’ Index (PMI) have continued to sit comfortably above a reading of fifty, which would suggest the sector is still expanding. Recruitment has also accelerated at the fastest pace in a year, which is a positive sign for the months ahead.
Despite originally forecasting a “moderation in growth” of 1.4% this year, the Office for Budget Responsibly has revised figures and is now expecting the economy to grow by 2% by the end of 2017.
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Britain has been a beacon for free trade for a number of years, which was one of the things that helped the country become the powerhouse economy of the world in the mid-19th century. The Telegraph has described future trade deals as being the “cornerstone of future UK prosperity”, with the outcomes having a direct impact on jobs and wages. This is why it’s seen as paramount that closer relationships are secured with countries both in and outside of Europe.
This may be easier said than done; however, as it’s been made clear by the European Commission’s chief Brexit negotiator, Michel Barnier, that Britain will have to accept freedom of movement – “without exception or nuance” – if it wishes to retain access to the single market. From noises made by the government surrounding the topic so far, the chances are that this may not be the case, after the PM described staying in the trade agreement as “not leaving at all”.
In what is a rare and radical opportunity to reshape its place in the global economy, Britain now has the chance to make the most of the challenges that come its way and forge a reputation as a figurehead for free trade.
Future of the UK
The Brexit vote has left the UK at a crossroads. Scotland is currently holding debates over when to hold another independence referendum, and the indications are that the remaining UK nations may follow in their footsteps. Out of the four, only England and Wales voted to leave, while Scotland and Northern Ireland wished to remain. Scotland has indicated that it would reapply to become a member of the EU; however, noises from Brussels have suggested that they will be subject to joining the queue. An application by any country has to be approved and agreed by all EU states, who could be reluctant to treat breakaway regions kindly.
Future of the EU
One of the biggest questions hanging over Brexit, surprisingly, doesn’t necessarily concern the UK directly. It does, in fact, hang over the European Union and how it will repair the substantial hole left by losing the world’s fifth-largest economy. The Brexit vote did awaken leaders across the union from their bureaucratic slumbers over the possibility of losing other nations who have similar agendas.
Marine Le Pen, leader of the Front National, suggested that France could follow in the footsteps of Britain, after hailing the Brexit vote as the “beginning of a movement that can’t be stopped.” However, the biggest threat to Brussels could come from the Five Star Movement in Italy, who recently had candidates elected as Mayors of Rome and Turin, and is looking to hold their own referendum.
With the rise in number of openly Eurosceptic parties across the continent, the EU needs to take a long hard look at itself and implement measures to quell the growing dissatisfaction within populations across EU member nations. What these measures will be remains to be seen but the powers that be need to take them seriously. Business as usual is no longer possible.
For the UK population and business community, Brexit continues to be a bold experiment; which if managed well, could revitalise and reshape our economy, away from an overreliance on the services sector, towards a renaissance for the manufacturing community.