[dropcap]T[/dropcap]he United Kingdom is due to leave the European Union (EU) on March 29, 2019. Prior to the Brexit vote, pro-Brexit campaigners said leaving the EU would start a great new era for the UK; one where Britons enjoy greater freedom, stronger trade and higher standing in the world.
This scenario is now facing far greater scrutiny than ever before, and has a number of serious implications for the Caribbean. With less than a year to go, every day sees the stakes get higher.
HISTORY CANNOT BE REVISITED
However you look at it, the world has changed dramatically since 1973 when London first joined the EU Single Market (EUSM). The world’s three biggest economies (USA, China and Japan) are outside the EU. And the EU, when measured collectively is in this top 4.
And this is a problem for the UK, trailing these economies as the 5th largest with India (6th) and Brazil (8th) expected to overtake it in future. Even among the bigger global economies in which Britain holds historical ties, restoring old trade ties with India, Canada and Australia will be hard. Each now looks to an economic future in Asia over Europe, and has for a long time.
This doesn’t suggest it’s impossible for Britain to carve a new identity post-Brexit; just that it must truly be a new identity. That will take time‚ and it’s time the Caribbean doesn’t have. Especially for the people in nations like Barbados, Dominica, Grenada and our own Saint Lucia.
THE CARIBBEAN AND BREXIT
Recent weeks have seen the pain of the Windrush scandal borne out in Britain, the Caribbean and around the world. And just as Windrush detailed heart-wrenching stories about the unequal treatment of members of the Caribbean family in the UK, the Caribbean as a whole now faces a period of anguish as Brexit negotiations stumble. And it centres on immigration.
London wants to retain favourable trade access to the European Union Single Market. But it also wants to hold immigration powers. This isn’t just a stumbling block for negotiations but speaks to a bigger issue. The UK will seek a new brand in 2019 but Brexit has saddled it with baggage.
Around one third of Britons voted to leave‚ and to give London greater power of immigration and border security. There is nothing wrong by default in wanting to enhance your nation’s immigration controls and border security but, as the great majority of these voters came from areas of the UK with very low immigrant populations‚ it evidences a difficult reality.
Many of those wanting to decrease immigration actually have little first-hand experience with immigrants. And that adds credence to the claim by a team of international researchers that a significant part of the Brexit vote had a xenophobic undercurrent. Rather than returning Britain to the centre stage, Britain looking inwards and decreasing immigrants risks its economic growth.
Britain is a global nation, and while Brexit may alter the fabric of that, it will remain one. While the 14 British Overseas Territories (BOT) will now go down a separate path to the sovereign nations that seek a new relationship with Britain post-Brexit, BOTs in our region, like Montserrat, now face the prospect of losing much-needed EU funding as a result of Brexit.
GETTING A DEAL DONE
Ultimately, what a post-Brexit Britain decides for itself is a matter for the British people. But the close ties many Caribbean nations have to the UK mean our region will suffer if in 2019 Britain is focused chiefly on quelling political upheaval at home, instead of new trade abroad.
Put simply, if a hard Brexit occurs, the Caribbean could be overlooked for a long time as Britain prioritises a trade deal with the EU and the US over smaller nations. It’s a confronting reality that all current trade deals held with Britain by former British colonies are now with Europe, as a result of London joining in 1973, and the EU subsuming Britain.
On March 30, 2019 regional nations who presently hold trade deals with the UK will see them continue in place with the EU, and favourable trade with the UK will need a new deal. Even if a hard Brexit occurs, Britain would find a way to secure reasonable growth in future. Even if that ultimately is done by one day rejoining the EU.
Smaller economies can hold many advantages, being able to pivot and change course with agility to seize on new opportunities—something increasingly desirable in the disruption era. But the flexibility of a smaller economy also makes it more vulnerable to economic storms, where catastrophic events can tear its anchor.
Brexit threatens to deliver such a storm, and while regional nations do have options here, none are particular palatable. Britain remains a highly desired market for trade, so simply making a break from London is not an option. Neither is quickly replacing elsewhere the trade presently had with London. And simply ‘waiting it out’ until the UK sees a normalisation could take decades.
This last option is right now our region’s greatest risk, as once a deal is done with the EU and the US, Britain will be prioritising trade with larger countries first. It’s a question of numbers for the UK: right now 50 per cent of its trade is with the EU, and just 9 per cent with Commonwealth countries..
The risk regional nations will go ‘to the back of the queue’ is offset by the potential for quicker and simpler trade deals. And it’s here that Caribbean governments can make the greatest inroads, and indeed will need to.
After all, a free trade deal negotiated between economic giants like the US and China must assess pros and cons in countless economic sectors. As the Caribbean has its greatest profitability in the tourism and finance industries, local nations can present to Britain proposed trade deals that would be simpler, and seek to resume our current trading arrangements.
The ultimate issue here is whether the UK can resolves issues it faces domestically, and in its negotiations with the EU, in a timely manner. Everything else in 2019 for Britain flows from this.
SO WILL THERE BE A RESOLUTION WITH THE EU?
At time of writing it appears the upheaval is set to continue given the issues at hand.
Especially because while many Britons don’t wish to leave the EU, research suggests the majority agree if Brexit does occur it should result in Britain remaining in the EUSM but wielding control in
London over immigration. And this is just not possible given the EU’s present attitude.
Given that the EU has indicated it won’t accept a trade deal with the UK that doesn’t allow the free movement of goods and people, Britons will be unable to have their cake and eat it. Either Britain loses access to the EUSM and controls immigration, or retains access to the EUSM but will be prohibited from setting its own immigration policy exclusively in London.
WILL BREXIT ACTUALLY HAPPEN?
British prime minister Theresa May has indicated multiple times ‘Brexit means Brexit’: that Britain will leave the EU no matter what. But what exactly Brexit will mean becomes more and more uncertain as negotiations fail to progress. Especially given that many tinderbox issues remain: from the Irish Border, to Gibraltar, to even the prospects of another Scottish independence vote. Significant turbulence in any one of these could derail Brexit, and many scenarios remain possible, including holding a second referendum on the Brexit vote or even seeing the Brexit process shut down by parliamentary manoeuvring or a legal challenge. Right now any progress is desirable, as negotiations lag but March 2019 is fast approaching.
