When I woke up yesterday morning to find the ‘Leave’ side had won the Brexit debate (the British exit from the European Union), I was saddened. Based on my Facebook feed and the texts on my phone, most of my friends were sad as well.
The main reason I am sad is this: I did not think Leave would win. I thought this would be another classic example of a group making a lot of noise about how they want change, but backing out at the last minute due to fear of the unknown. What saddens and scares me is that the Leave voters are less afraid of the unknown than they are of open borders, immigration, free trade, etc.
Do those things sound scary to you? As an educated millennial reading this (I presume), they shouldn’t – economies benefit from all three. And the close to three quarters of British youth who voted to Remain agreed. What should sound scary is that the majority of voters in the UK succumbed to xenophobic and protectionist beliefs that an isolated and independent Great Britain is better than a united, free and open one. What is even scarier is that the same philosophical divide is happening in the United States right now. Throughout all his totally off-the-cuff and illogical policies, Donald Trump has made clear that he sees a ‘great’ America to be a protectionist and isolated one. I can only hope that the majority don’t side with him as they did in the UK.
Moving beyond the emotional reaction, I sought to understand: What happens next? What is the impact for Canada?
Even though the UK has finalized its decision to leave the EU, it is far from saying its goodbyes. Britain has two years to negotiate its exit terms, including how it will trade with the EU member countries. It will remain a member until those two years are up, with the timer starting from the day that the Prime Minister invokes Article 50. PM David Cameron has stated his intention to do this immediately.
The biggest consequence from a Canadian perspective is the impact to trade. Canada had recently negotiated a trade agreement known as CETA (Comprehensive Economic and Trade Agreement) between Canada and the EU, which is waiting to be ratified by Parliament. The agreement will have huge implications for free (or freer) trade between EU Countries and Canada. The UK will almost certainly be left out of the deal and forced to strike out on its own to create trade agreements – a process that can take many years, even a decade. Similarly, companies operating in the UK will now have to adapt to British law and language from the EU structure currently in place. This will act as a barrier to Canadian companies looking to set up shop there.
Last, I want to touch on the impact to people. Those with EU passports will no longer have access to jobs in Britain. Likewise, Brits wanting to work in other European markets will now find this to be a much more tedious process. Just how tedious, we do not know yet – but think of how difficult it is for Canadians to gain work access to the US without company sponsorship. The job pool will get smaller for both Brits and citizens of EU countries, and it will get harder for companies (specifically British companies) to flex their workforce when needed to enable speed to market.
While the Brexit might secure the jobs of the baby boomer working class voters who made Leave happen, it is sure to have implications for the British economy in the short, medium and long term. Short term effects have already begun with the plunging financial markets yesterday. And while these economic implications have me shaking my head, it is still the philosophical divide and its global implications that scare me most.
Authored by: Candice White, Co-Founder and Editor mPolitics.co
Source for facts: Globe and Mail