The British withdrawal from the European Union stirred the world’s economic and political domain and is still doing rounds in the media. Brexit is a portmanteau and exit, which refers to the official emancipation of Britain from the European Union and Atomic Energy Community scheduled for 31st January 2020. The UK is the first official country within the European and union to have left it after 47 years of economic and political investment and association as a member state of the EU. Any country party member’s state of the EU has the authority to request the withdrawal process under article 50 of the treaty of the European Union. After putting forward the withdrawal request, the European Union negotiates and discourses with the member states regarding the course of action of the withdrawal process and its influence on the future associations with the EU. Based on the referendum scheduled on 23 June 2016, the proper removal occurred on 1 February 2020. After first January 2021, the affiliations between Britain and the EU are solely based on economic aspects. They are dependent on each other through the trade and cooperation agreement. The UK and EU are currently connected through a specialized trade basis agreement that safeguards the emergency and prevalence of trade activities without tariffs or quotas. However, the prospective relationships are still in limbo, mainly trade in services that constitute more than 50% of the UK’s economy.
What is a hard Exit?
Hard exit or hard Brexit represents a complete split between the EU and UK with few or none of the prior trade arrangements. In this negotiation, the EU and UK can lose a lot. However, a hard Brexit can hurt more UK economy because the whole EU zone is the most important export market for the UK.
What is soft Brexit?
Soft Brexit represents a complete split between the EU and UK with a new relationship carrying favorable conditions of the former arrangements.
On December 31, 2020, the official agreement between these two entities concluded. This eventually constituted the end of many years overseen by the two different Prime Ministers immersed in delays and extensions and resulted in the UK being divided. 52% of the British population voted for Brexit when the conservative general election in 2015 establish a manifesto to perform an in-out referendum, and consequently, the 40-year membership has concluded.
Benefits and Drawbacks of Brexit
The benefits of Brexit cost reduction for the UK, UK Sovereignty, international trade prompt, reduction in issues due to immigration, and an Increase in Employment Rate. However, drawbacks of Brexit (reasons to stay in the EU) are a loss of foreign investment, Reduced EU market access, security, the rise of average household cost.
Let us discuss more negatives and positives of Brexit.
Some of the opportunists believe that Brexit has a positive impact on the overall economy of Britain, and for them, it is a significant disadvantage of staying in the EU. Some advocates believe that after signing an official declaration of independence from the EU, Britain would be independent and authoritative in establishing its home-bound rules. It would not have to adhere to the universe. This gives Britain certain leverage in terms of state negotiation deals and agreements. Some politicians and experts claim Norway’s model to be one of its kind and therefore expect to follow the iconic model as most of its trade are performed with the EU, although it is not an official member.
Similarly, Brexit would give emancipation from restrictions that are imposed by Brussels and would provide economic freedom. Some of the proponents of Brexit claim that London can retain its position as a financial pioneer if Europe fails to meet the economic standards somewhere in the future. Prospectively, this would provide international investors and foreign companies to invest in London. However, some small-scale British companies are conducting trade and economic activities with the European Union without being affected.
The well-thought decision of Brexit helps in saving immediate costs, certain advocates urge. The membership cost was 13,100,000,000 pounds required to the multinational structure recorded in 2016, whereas Britain received 4,500,000,000 pounds for spending. As a result, this country had to bear a loss of 8,600,000,000 pounds in one year only. This amount could have been utilized and invested in several functional categories such as health and infrastructure, enriching Britain’s existing structure.
It also gave birth to a series of new employment opportunities as well as investments. Three billion jobs are observed and emerged as a result of the increase in trade activities. The UK experienced a surge in employment growth as well.
It significantly minimized and reduced the existing predicament of immigration in the European Union. More than 800,000 people shifted back to the UK to gain the maximum advantage of employment increase. As a result of Brexit, there was a sudden improvement in Border security. Terrorism was an increasing threat to the entire region due to the withdrawal; this issue has been subjected to containment because of restrictions in terms of free movement as it restricted free movement, therefore, creating difficulties for people.
Brexit impact on UK visa
EU citizens will not need a UK visa to enter the UK for business trips and short vacations (up to six months), but they will need an electronic travel authorization. In the future, a UK visa waiver should be in place by 2025. Visa rules for traveling between the European Union and the UK will remain the same throughout the Brexit transition period.
Disadvantages of leaving the EU
Disadvantages of leaving the EU are loss of foreign investment, Reduced EU market access, security, the rise of average household cost in the UK. Most economists believe that Brexit could result in the evading of Britain’s economic and political power. This would also result in the dwindling of London’s reputation as the financial hub as the overall financial markets would be influenced and adversely affected. In addition, some of the international banks and commercial establishments are uncertain about their position in London. Consequently, these banks are deciding to leave the financial hub as the consequences of Brexit would be inconceivable in terms of ambiguity and insecurity.
Furthermore, the withdrawal of the UK from the EU would result in the free movement of EU citizens to the UK and vice versa. Therefore the British nationals and residents residing in the EU would have to bear the cost and, unfortunately, would not be given free access to health services. The Brexit is also considered to negatively impact the British farmers as they would lose out on subsidies and multiple jobs in international establishments, consequently resulting in jobless farmers. Additionally, Britain would have to dwell in isolation which is not considered practical in a globalized world. Typical challenges and predicaments such as climate change, terrorism, political and economic difficulties are faced and countered as a tightly knit community.
Women are known to be unfavorably influenced due to Brexit in terms of the reduction of maternity leave, equal importance in the workplace, job security, and safety. In addition, the women were subjected to unequal discrimination in terms of equality, and they were not being provided identical benefits along with minorities.
The immigration rates decreased, more job opportunities were created for those who resided back in the country. As a result, there was a noticeable shortage of labor, which could significantly create obstacles to the country’s economic growth. This is directly linked to the overall deficit in terms of population. Therefore, the shortage of skills-based financial perspective is an option for economic growth and boost.
Since the beginning, Europe was the primary source of investment, trading, and revenue for Britain. The long-lasting relationship between Europe and UK established its financial position as a financial pioneer in the global financial domain. After Brexit, it has been estimated that the UK‘s economy had to bear a 4 to 9% loss in terms of businesses and investment.
After the UK has decided to leave the European Union, it can re-join it in the future. This decision will be analyzed and evaluate under article 49 of the treaty of Lisbon, claiming that any country interested in joining the European Union must provide an official request to the European Council.