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An American’s Guide to Brexit

By: International Council on Trade & Development Staff


Intro:

Europe is a topic that is not mentioned often in American society but when it does, the word “Brexit” comes to mind most of the time. As of now, the United Kingdom and the European Union have until March 11th, 2019 to arrange a final agreement on customs and tariffs between the UK and the European Single market as the United Kingdom makes its leave. The negotiations process has been slow and there have been several moments where the stability of Theresa May’s government has been called into question, notably the brief episode where Foreign Minister Boris Johnson and Brexit Minister David Davis spring to mind as the most recent examples. Although Brexit is a topic talked about regularly within the mainstream media, not much discussion has been made on the impact Brexit will have on America’s relationship with both the United Kingdom and the European Union.


What is Brexit? Terms Americans should know about when reading Brexit News

Brexit, short for “British Exit of the European Union”, is a shorthand used to refer to the possibility of the United Kingdom leaving the European Union. In the past, this was merely a hypothetical scenario but as of the Brexit referendum on June 23, 2016, that hypothetical scenario may not become a reality. The long negotiations process between the UK and Europe has brought anxiety for governments and businesses alike as they determine how they should continue doing business abroad under new trade terms. When you look at Brexit News, you will hear a variety of terms stated by politicians, businessmen, and pundits about the state of Brexit negotiations. In this section, we will go through a quick rundown of some common terms used by reporters, politicians, and pundits when discussing about Brexit.


Soft Brexit: this term is used for the hypothetical scenario of Britain leaving the European Union but remaining mostly or partially integrated into the European single market. In this scenario, the United Kingdom would obey most EU laws regarding trade and regulations for the purposes of avoiding EU tariffs on British goods while still having flexibility to develop its own policy elsewhere on areas they like. One drawback of a Soft Brexit is that Britain would still not have any say on developing EU policies as they will lose any representation they have on the European Parliament after launching Brexit. The current plan proposed by the Theresa May government fits the Soft Brexit mold the best.


Hard Brexit/No Deal Brexit: this term is used for the scenario where Britain is mostly or completely separated from the European Single market. In this case, Britain is as foreign to Europe as the United States and Brazil and faces the same type of tariffs and trade regulations as those countries as well. Many within the European Union and business community are afraid of this type of Brexit as they are afraid it will badly cripple the British economy. One type of variant of Hard Brexit that many are afraid of is “No Deal Brexit”. In this situation, the UK and the European Union do not finish negotiations by the stated deadline of March 11th, 2019. This would result in a great deal of confusion as business and governments are unsure of how to conduct trade with the United Kingdom or the European Union.


A No Deal situation is so distressing that the Royal Airforce has developed plans for distributing medicine and food supplies to the British countryside as according to some reports within the Theresa May government, the UK is projected to only have 2 weeks of food supply left after getting a No Deal Brexit.

European Union: the European Union is the singular economic union that connects 28 (possibly 27 depending on how Brexit turns out) European member states through mutual trade agreements, harmonized policies on regulations, and a policy making body that facilitates collaboration between the member states.


The European Union is the continuation of several multi-lateral treaties passed in Europe since the end of World War 2 and is considered one of the major factors of why Europe has remained so peaceful and prosperous since the end of World War II. Although EU has played a major role in tying Europe together, many member states are dissatisfied with the way Europe handles its policy decisions such as Great Britain on economic issues and Poland or Hungary on immigration. The 2010 economic recession, the following Eurozone crisis, and the refugee influx in 2015 has sent these resentments to a boiling point and serves as the driving force for Britain ultimately launching the Brexit referendum.


Irish Border: a catch-all term used by the media to describe any issues or negotiations between the UK and EU regarding the status of the UK’s border with Ireland. This is a particularly salient issue between the UK and EU because Ireland has no plans on leaving the European Union. This would make Northern Ireland one of two physical borders that the UK would have between itself and the European Union alongside Gibraltar. As of now, Brexit negotiations are inching closer to a conclusion on the Northern Irish Border with many speculating that there would be limited border controls but an overall open border between the UK and Ireland would remain.


5 Reasons Americans Should Care About Brexit

When Americans hear about the media reporting on Brexit, many are confused as to how this would affect the United States while many others might brush off Brexit has an exclusively European issue unrelated to American policies. This perception is far from the truth however as Britain leaving the European Union would have significant ripple effects on the character of America’s trans-Atlantic relationship with Europe and will have ramifications for decades to come.

1. America would have less direct influence in Europe

2. America would have a weaker Britain to trust on for Trade and Military assistance

3. How Does Brexit Affect Americans Economically? (Top 5 List?)

Conclusion

-Brexit will mean (this), (this), and (that)

-Resumarize about the current progress of Brexit negotiations, the state of Theresa May Government, and the action going on for a 2nd Referendum

-Americans and the American government will have to be alert of the ripple effects of Brexit and the current process in Brexit negotiations


Sources:

https://www.thebalance.com/brexit-consequences-4062999

http://time.com/4383202/brexit-america-fallout-economy-fed/

https://www.forbes.com/sites/elyrazin/2018/08/08/how-brexit-could-affect-finance-real-estate-and-the-global-economy/

https://www.veem.com/us/brexit-will-affect-small-business-us/

https://money.cnn.com/2016/06/24/investing/brexit-impact-on-american-global-economy/;

https://www.ft.com/content/ee2057aa-db88-11e8-9f04-38d397e6661c

https://www.pwc.com/us/en/brexit-us.html

https://www.bbc.com/news/av/uk-politics-46020189/brexit-entirely-acceptable-to-offer-referendum-on-deal

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