Brexit is an abbreviation for a British exit from European. The United Kingdom, on 23 June 2016 decided whether Britain should leave the European nation or not. The elections were through a poll, and 51.89 percent majority voted for Britain exit (Bartels & Mestral, 2018). The journey to Brexit begun but did not happen right away. It was expected the exit would take place by date 29 March 2019 but did not occur (Bartels & Mestral, 2018). Negotiations have been taking place since 2006 after voting took place. Mostly, discussions are about how the UK will exit rather than what will happen after exit. UK is Canada's second-biggest trading partner after the US. There are several benefits enjoyed in trade between Canada and Britain. These include, alreadyUK businesses established in Canada, no language differences and business culture is the same. The Britain exit is however expected to change the trading, and economic agreement with other EU members and this will also affect the relationship with Canada.
There are several trade agreements between Britain and Canada. Such trade agreements include tariff agreement between the two countries. According to the new statistics, the businesses in Britain are benefiting from the ability to trade freely with Canada without paying any duties with Canadian customs (Andersson, 2018). The Canadians import from the UK have risen by 13.7% to 6.15 billion in one year after a new free trade agreement. Implementation of EU-Canada Comprehensive Economic and Trade Agreement (CETA) in September 2017 as boosted the export in Britain (Andersson, 2018). Food and drinks have their tariffs reduced to almost zero from the initial tariff of 11%. Auto tariffs are also being reduced to zero from 6.1%. Most beneficially is the British motor industry. Meat export to Canada went up by 36.3% to 2.8m and wine export increased by 16.6% to 1.75% (Bartels & Mestral, 2018). These trade agreements are now friendly, and the two countries are economically benefiting.
There were several arguments raised during the campaign time for Brexit. Most of them were involving the politics, economy, trade and national identity. Britain exit will have advantages and disadvantages to Britain itself and the European Union members. Firstly, it was how the membership fee could be used to build the economy of Britain. There was an argument that leaving the EU would result in some savings since the country would no longer be subjected to the EU budget. According to Menstral (2019), Britain paid 13.1bn in 2016 received 4.5bn for the expense. Looking at this, Britain thought that it could use that membership fee to build its economy. There was the issue of trade. The import and export between member state are exempted from tariffs and other barriers. Financial services can also be offered without restriction across the continent.
Britain took advantage of this freedom, but it's likely to make another twist. This freedom is still a matter of debate and conjecture in Britain. More than 50% of Britain exports go to EU countries. Britain also benefited from trade deals between the EU and other world powerful countries like Japan and Canada (Mason, 2016). Since brain exit began, these countries have agreed on free trade deals which Britain is likely not to benefit from the agreement. Britain will lose the benefit of free trade with its neighbors. It will also lose bargaining power with the rest of the world. However, the UK can establish its trade agreement to recover those losses. Some regulations that come along with being an EU member affect the small-medium sized firm. But trade agreement would free them to trade overseas. There were several different models for the post-EU trade policy. One preferred an arrangement based on Canada's free trade treaty (Partington, 2019). Another suggestion was to maintain economic links with EU replicating Norway or Switzerland positions. However, there is fear that if Britain joins the Norwegian club, it will still be bound virtually to all regulations in the European Union.That would include everything dreamed up Brussels in future and working time directives.
The economy of Britain is likely to be affected by the investment decision made by others. The UK's status as one of the world's biggest financial centers would be diminished if the city of London was no longer the gateway to the European Unionby big institutions like the US bankscenters. The free 'pass porting' right to work freely across the continent by the financial institutions based in the UK would be lost (Stephenson, 2018). There were mixed reactions and fear that carmakers thrive in Britain if cars exported to the EU were no longer tax-free. However, BMW's decision in 2016 underlined the car export. Britain is adamant that a deal to continue with a tariff-free trade would be secured even if the UK left the single market (Powell, 2019). EU owed Britain a large trade deficit, and so it was Europe to find a compromise for goods and services. Some proposed that Britain could cut links with Europe and free itself from EU rules and regulations. Since the Brexit vote, there have been several investment programs canceled. Carmakers are not doing well. Honda is shutting its branch in Swindon, Nissan canceled its plans to build a new model in Sunderland while jaguar land rover as reduced its employment opportunities. The cancellation was a big blow to the economy of Britain
The sovereignty of Britain is likely to affect the economy of Britain. Being an EU member could mean you give up over some domestic affairs. In this regard, most of the people in Britain feel that they have won their sovereignty back by the Brexit (Starr, 2019). There was an attempt to deny people their democratic power and replace it with permanent administration whose significant interest was business (Walker, 2018). There was also an argument that EU institutions drained their power from the UK parliament. Brexit would allow Britain to establish its connection with the rest of the world after establishing itself as a truly independent country. By doing so, Britain will be able to make some business deal for itself and grow its economy. Their membership in the EU involved the great exchange of sovereignty for influence (Stephens, 2018). Britain was relatively influential, and its voice was heard on the world stage making it easy for its citizens to influence the businesses in the EU. Some British see that their sovereignty will be weakened by taking away their power and affect the event in a more complex and interdependent world. The weakening of sovereignty will deny Britain the ability to strike a trade deal more straightforwardly with other powerful states. Besides, immigration is another thing that is likely to affect the economy of Canada. There is no power according to the law for Britain to stop people from other member states from coming to leave in the UK (Walker, 2018). People from Britain enjoy an equal right to live and work anywhere else within that region resulting in substantial economic growth due to available labor, available markets for all goods produced. However, there were cases of inadequate housing and service provision. Brexit will reduce market demand by regulating people crossing the agreed borders (Stephenson, 2018). Workers coming from other regions will also be monitored thus reducing its labor force hence hurting the economy.
Another thing likely to affect the economy and trade in Brexit is security. According to Mason (2016), Britain was leaving its' doors open' to terrorist groups by being in the EU. Those open borders do not allow Britain to inspect and control people. So, by gaining control over the borders, the insecurity will be tamed, and investors will feel safe in Britain boosting the trade and economy.
In conclusion, the trade agreement between the EU (particularly Britain) and Canada are so far excellent and favorable. The tariff has been reduced making import and export of goods in Canada and Britain profitable, the trade policy is clear, no prohibition. Brexit, which is still to be completed will have its advantages and disadvantages. Majority of Britain believe that they will benefit more than they will lose thus opting to exit. Britain will establish its self as an independent country with its own economic and trade policy.it will have control over its affairs without abiding by EU regulations and rules. It will gain control on its borders, check and regulate the movement of people hence boosting its security and defeat terrorism which has become a big problem in Britain. Better security in Britain will make it a hot destination for investors and traders.
Andersson, J. (2018). Brexit: What is a Canada-style free trade agreement and could it work for the UK?. News The Essential Daily Briefing. Retrieved from https://inews.co.uk/news/brexit/canada-style-free-trade-agreement-uk-after-brexit/
Bartels, L., & Mestral, A. (2018). Trade relations between Canada and the UK in the event of Brexit. SSHRC-ESRC. Retrieved from https://www.mcgill.ca/jean-monnet-chair/research-brexit
Menstral, A. (2019). Trade Between Canada and the UK after Brexit: Where Are We?. UEA. Retrieved from https://www.uea.ac.uk/law/research/international-law-blog/-/asset_publisher/bS26fAaA3cQa/blog/trade-between-canada-and-the-uk-after-brexit-where-are-we-?inheritRedirect=false
Partington, R. (2019). Brexit: UK has rolled over just PS16bn out of PS117bn trade deals. The Guardian. Retrieved from https://www.theguardian.com/business/2019/feb/13/brexit-uk-trade-deals-eu
Powell, N. (2019). Brexit vote ups pressure on U.K., Canada to strike bilateral trade deal. Financial Times. Retrieved from https://business.financialpost.com/news/economy/brexit-vote-ups-pressure-on-u-k-canada-to-strike-trade-deal
Starr, K. (2019). Canada, U.K. in 'informal talks' on trade ahead of key Brexit vote. CBC News. Retrieved from https://www.cbc.ca/news/politics/canada-uk-trade-talks-brexit-vote-1.4973281
Stephens, P. (2018). Brexit Britain should follow Canada's lead. Financial Times. Retrieved from https://www.ft.com/content/cb75adf0-0382-11e9-9d01-cd4d49afbbe3
Stephenson, A. (2018). Brexit a severe blow, but Canada can still find opportunities in a changing Europe, business crowd told. Calgary Herald. Retrieved from https://calgaryherald.com/business/local-business/brexit-a-severe-blow-but-canada-can-still-find-opportunities-in-a-changing-europe-business-crowd-told
Walker, P. (2018). Labour MP Kate Hoey says she will fight moves to deselect her. The Guardian. Retrieved from https://www.theguardian.com/politics/2018/jul/27/labour-mp-says-she-will-fight-moves-to-deselect-her-as-mp
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