Brexit: The UK's farewell to the UN

After a vote during June 2016, the United Kingdom (England, Scotland, Wales, and Northern Ireland) decided they would follow the necessary measures to leave the European Union. The EU is made up of 27 countries including Germany, France, and Italy. 

Brexit was the United Kingdom’s exit plan to leave the European Union. David Cameron, British Prime Minister, during 2013, promised that there’d be a national referendum, which is a vote on one political question, to decide whether or not to retain membership in the EU. The voters had two simple options–leave or stay. Although some people were convinced the voters would choose to stay, the poll results said otherwise, with 52 percent of the votes leaning towards leaving the Union, according to the New York Times. 

photo by sky stockton

A majority of voters within small cities and rural towns in Wales and England were in favor of Brexit, while voters London and Scotland were opposed to the idea of leaving. While certain regions were against leaving, a majority of people under 30 in the United Kingdom were, as well. 

With Europe being Britain’s biggest source for foreign investment and an important staple in Britain’s export market, it leaves a lot of people wondering what will happen to their economy and trade relations with the European Union. On January 23, after Brexit was finalized, the UK was granted 11 months to establish themself and work out details for trading. 

Some major companies, including Airbus,  have said they’d leave Britain because of Brexit. If companies do leave Britain over 100,000 citizens could lose their jobs. Along with job loss, the government has estimated that Britain's economy could be four to nine percent smaller within the next 15 years.

Before Brexit was finalized in January, the United Kingdom’s biggest trade relations were with countries of the EU. During 2018, the UK made an estimated  £1.3 trillion ($1.4 trillion in USD), approximately half was from trading with the EU. To have any sort of trading with the EU, the UK needs to establish a trade deal before the year closes. A free trade deal will try to create/encourage trading by making it cheaper, by erasing or reducing tariffs. The trade deals can also eliminate quotas on products. During the 11-month transition period, the United Kingdom will still be included in the Union’s trading agreements. If any trade agreements are made, they will begin after the transition period concludes.

Neither parties want to include tariffs or quotas in their deal, so that will be easily negotiated. However, the real problem will come when it’s time to establish rules and regulations for a trade deal. If the parties fail to reach an agreement, they may have to trade because of basic guidelines established by the World Trade Organization. If this were to happen, tariffs would have to be used, which would make goods from the United Kingdom more expensive and harder to sell.