BREXIT: Deal or no deal?

Rachel Davidson–HB

Tomorrow (June 23rd), Britain will hold a referendum concerning whether or not it will secede from the European Union.
Now you may be asking, “What is the European Union?” The European Union, created after WWII, was established to make trade and immigration easier in Europe to avoid another world war. [1]
Now why would Britain want to the leave the European Union? Many people in Britain are simply fed up with being regulated by a foreign power. Today the EU intensely regulates trade over things like bananas to electric plugs to sorted recyclables. [2] The regulations are almost ridiculous, and you can see why Britain would feel exasperated. There are also some underlying xenophobic reasons concerning immigration and the Syrian refugees. The UK Independence Party (UKIP) in particular advocates for separation from the EU reasoning that the benefits of their membership do not outweigh the costs. The costs being the senseless regulation and the fee to be a part of the EU. According to The Telegraph, a British online newspaper, the UK payed £12.9 billion with rebate in 2015 to be a member of the EU. [3] Unfortunately, pro-Brexiters like UKIP say that the UK pays up to £55 billion to gather support which may be true but is seriously misleading if you disregard the rebate and the benefits the UK gains from being a member.
But what are the benefits? At the moment, any country a part of the European Union has access to their free trade system meaning there are no taxes or tariffs on products imported or exported. [4] In addition, every country benefits from the exchange of people and creativity. According to The Week, “Professor Adrian Favell says limiting freedom of movement would deter the ‘brightest and the best’ of the continent from coming to Britain and reduce the pool of candidates employers can choose from.” [5] Furthermore, British citizens benefit by being able to apply for jobs in the rest of Europe. [5]
“What are the consequences for Britain of leaving the European Union?” Most economists can agree that the effects will be negative. Britain will lose its free trade with the EU and will have to reorganize trade. [6] But some have even speculated that the EU will be reluctant to trade with Britain to 1) punish Britain and 2) discourage other countries from abandoning ship. British economic centers like Oxford Economics and PwC predict that Britain’s GDP can and will drop about .10% to 5.5%. [6] Even the Center for European Reform concludes that “Britain’s trade with the EU has been 55% greater than it would have been without membership.” [6] Finally, if the Brexit does happen and Britain does secure trade with the EU, Britain will most likely have to follow the EU’s regulations, allow free movement of people, and pay a budget like the EU does with Switzerland and Norway. [4] Other consequences include a risk to security, investment, and employment. Economists believe that British isolation from the EU will not reap rewards but instead cause a lot of damage.
All in all, I do believe that a Brexit is completely unwise on Britain’s part and will most likely not maximize their utility and cause negative externalities to the rest of Europe that remains in the EU.

Footnotes:
[1]Wheeler, Brian, and Alex Hunt. “The UK’s EU Referendum: All You Need to Know.” BBC News. June 22, 2016. Accessed June 22, 2016. http://www.bbc.com/news/uk-politics-32810887.
[2] “Bendy Bananas and Ampelmännchen: 10 EU Regulations.” DW.COM. Accessed June 22, 2016. http://www.dw.com/en/bendy-bananas-and-ampelmännchen-10-eu-regulations/g-17533547.
[3] Kirkup, James. “EU Facts: How Much Does Britain Pay to the EU Budget?” The Telegraph. February 29, 2016. Accessed June 22, 2016. http://www.telegraph.co.uk/news/newstopics/eureferendum/12176663/EU-Facts-how-much-does-Britain-pay-to-the-EU-budget.html.
[4] “Unfavourable Trade Winds; Brexit Brief.” The Economist, March 26, 2016. Accessed June 22, 2016. http://www.economist.com/sites/default/files/EconomistBrexitBriefs16.pdf.
[5] “EU Referendum.” The Week UK. June 13, 2016. Accessed June 22, 2016. http://www.theweek.co.uk/eu-referendum.
[6] “The Economic Consequences; Brexit Brief.” The Economist, April 9, 2016. Accessed June 22, 2016. http://www.economist.com/sites/default/files/EconomistBrexitBriefs16.pdf.

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