By: Edward Simon Cruz Flags from the United Kingdom and European Union wave in the wind outside of the UK Parliament Building. Photo Credit: Politico.eu On January 29, the European Parliament approved the United Kingdom’s exit from the European Union, commonly known as “Brexit”; the exit became official as of 11:00 p.m. local time on January 31, 2020. A transition period […]
By: Edward Simon Cruz
Flags from the United Kingdom and European Union wave in the wind outside of the UK Parliament Building. Photo Credit: Politico.eu
On January 29, the European Parliament approved the United Kingdom’s exit from the European Union, commonly known as “Brexit”; the exit became official as of 11:00 p.m. local time on January 31, 2020. A transition period will last until December 31 2020, at which time lawmakers will continue to work on negotiations on key topics such as trade.
In a public referendum on June 23, 2016, a slight majority (51.9%) of British citizens voted in favor of Brexit. There were many delays and debates in the ensuing three-and-a-half years; the original deadline of March 29, 2019 was pushed back three times. After Prime Minister Theresa May did not get her withdrawal agreement approved, she resigned and was replaced by Boris Johnson in July 2019. On October 17, the U.K. and E.U. approved a withdrawal agreement, but Parliament refused to meet the October 31 deadline at the time and forced the E.U. to push back the deadline to January 31, 2020.
Former British Prime Minister Theresa May resigned after she was unable to get her Brexit withdrawal agreement approved. Photo Credit: Vox
Johnson called for a snap election so that his Conservative Party could obtain a majority in Parliament in time to approve Brexit. His request was approved, with the election date set for December 12, 2019. The results of the election gave the Conservatives a majority in Parliament. On January 23, Parliament approved the withdrawal agreement, which was then signed by U.K. and E.U. officials the next day.
The withdrawal agreement laid out some conditions surrounding the post-exit transition period. The major change in Johnson’s withdrawal agreement surrounded the creation of a customs border between the United Kingdom and Northern Ireland. This border would manage the transport of goods to Northern Ireland and the bordering Republic of Ireland, which remains in the E.U.
During the upcoming transition period, Britain will remain bound by E.U. rules, including those surrounding trade; however, there are no trade conditions in the withdrawal agreement, necessitating a new trade deal for 2021 and beyond. Johnson favors a “zero tariff, zero quota” approach to trade, believing it will allow the British to fulfill their economic potential; conversely, the E.U. fears that a trade deal with minimal restrictions will lead to unfair competition. Among other things, the U.K. and E.U. will also have to negotiate terms for data security, air safety, fishing rights, electricity, and medicine.
An updated map of the European Union, countries in blue are still part of the agreement. Photo Credit: Europe Map
Beyond the transition period lies much economic uncertainty. Signs of economic strength, including the lowest unemployment rates since the 1970s and a surging job market, are complemented by signs of stagnation; for example, the value of the pound collapsed the day after the 2016 vote to the lowest point since 1985 and has frequently fluctuated since then.
Both Johnson and U.S. President Donald Trump expressed interest in a U.K.-U.S. trade deal; the former hopes to use such an agreement to instill confidence in the British people regarding the potential of future economic progress. However, analysts do not feel that trade agreements will lead to major economic changes in the U.S.
In a speech to the British people, Johnson declared the “dawn of a new era” and “a moment of real national renewal and change.” Amidst many questions to be answered and deals to be made, only time will tell how Britain will set forth on its new era.