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Tuesday, June 21, 2016

A Brexit Round Trip Across The Pond: To Be or Not To Be?


Tiberiu Dianu

That is the question. On June 23, the United Kingdom will vote either to remain
in the European Union, or to leave it, the so-called “Brexit.”

Not such a long time ago, the camp of the status quo supporters seemed robust.
But lately, polls have shown trends reversals, in the sense that Brexit has actually
gained momentum. In May 2016, An Ipsos MORI telephone survey showed a 55
 to 37 ratio of voters for the status quo (with the rest being undecided) , while a
June 16 survey indicated a 53 to 47 ratio (with no undecided) for the Brexit -- also
known as “No, thanks” supporters.

No matter what the final results will be, changes are expected within the EU poli-
tical construction.

Why do the Brits want to exit the EU?

There are several reasons. The UK itself used to be, in its colonial times, and still
is, as a (formerly British) Commonwealth of Nations, a political construction much
larger that the EU itself. Then, as a “mother country” for the US, it has been consi-
dered by many as the European turntable for America (or the other way around, de-
pending on whom you talk with). In addition to that, the UK is a nuclear power. Oth-
er reasons include: satiety for the Brussels bureaucracy; distaste for the German-Fr-
ench dominance of the EU, with both of them being in a visible rapprochement with
Russia; and growing impatience with the EU, who constantly bails out member sta-
tes, less responsible financially, from their enormous debts (like Greece). While “Gr-
exit” was conceived as an EU sanction (but never applied), Brexit represents a local
parliament initiative conceived, among others, to halt (at least for London) the conti-
nuous flow of assets and resources from the nations of makers to the nations of takers.
Given the circumstances, it comes as no surprise that many British citizens’ attitudes
toward the EU mirror similar American  feelings, harbored against deals like NAFTA
or Trans-Pacific Partnership (TPP).

The Advent of Brexit

The British eurosceptic politicians have constantly advocated alternatives to the
UK membership in the EU. One of them was a Commonwealth free trade area. The
concept of a Commonwealth free trade area has been popularized by eurosceptics
well in advance the 2016 referendum, as a variant for a free trade treaty with the

On January 1, 1973, the UK and Gibraltar joined the EU (known then as the Euro-
pean Economic Community) under terms negotiated by the Conservative govern-
ment, then in power, through its leader, Edward Heath. The 1974 elections were
won by the Labor Party, who formed a minority administration and held a referen-
dum on continued membership in 1975, which was approved by 65% of the voters.
However, since withdrawal from the EU is a right of the member states, stipulated
by Article 50 of the 2007 Treaty on European Union, eurosceptic British Parliament
members have been having constant calls for a new referendum.

A 2010 report (see: The Royal Commonwealth Society: A Working Paper, pp. 
8-9)  has shown that: intra-Commonwealth trade (between members), is up to 50%
more than with a non-Commonwealth member; and smaller and less wealthy states
(like island members in the Caribbean and Pacific) have a higher propensity to trade
within the Commonwealth.

In 2012, the British eurosceptics had proposed already a Commonwealth free tra-
de zone,  although, at that time, such an idea had been labeled as “the ultimate Eu-
rosceptic fantasy.” On January 23, 2013, the Conservative prime minister David
Cameron proposed in his “Bloomberg speech”a renegotiation of the terms of the
UK membership and a new referendum on the EU membership.

In 2015, the UK Parliament passed the European Union Referendum Act, which
makes provision for the holding of a referendum no later than December 31, 2017.
Let us imagine several post-June 23 scenarios...

If the status quo prevails

We refer to an impact analysis on four levels: domestic (for the UK), regional (wi-
thin the EU), transatlantic (with the US), and international (which includes the Bri-
tish Commonwealth nations, and the world). Domestically, there is to be expected
a moderate -- more political than financial -- impact. The British political parties
will justify the results in their own way, and adjust their short- and medium-term
actions accordingly. The Bank of England will probably not intervene in sustaining
the sterling pound, although some “bulls and bears” might shake a bit the London
Stock Exchange after Friday, June 24.

Regionally, the UK will try to redefine its status within, and relationship with, the
EU based on the robustness of the victory percentages, or the lack thereof.

Bilaterally, with the US transatlantic partner, this will mean a folding on President
Obama’s position for the status quo, emphasized during his April meeting in Lon-
don with prime minister Cameron.

Internationally, with the UK remaining in the EU, other countries (the British co-
mmonwealth nations in particular, but also Russia and China) will perceive it as a
sign relative stability, in areas where social unrest and separatist movements emer-
ge from  time to time.

If Brexit prevails

An impact analysis applied to the same levels (domestic, regional-continental,
transatlantic-bilateral, and international) will reveal the following possible tre-
nds. Domestically, the sterling pound will plunge, in varied modulations: a good
reason for the Bank of England and other departments (British ministries) to inte-
rvene with emergency plans, based on their own money reserve availability. An-
other problem is the situation of the 1.3 million British residents in other EU co-
untries (especially in Spain, Ireland, and France), whose status should be clarifi-
ed in the near future by both  the British and EU authorities. Last but not least,
the British government will have to appoint more experts for the trade negotia-
tions with the EU.

Regionally, several EU leaders, including Italy’s center-left prime minister Ren-
zi, warned that Brexit would be a path of no return.  Other EU nations will put
in question the legitimacy of both the British euro-parliament members, and Eu-
ropean Commission experts. Some EU states will probably push for some deci-
sions to be taken, without the UK’s participation, where a unanimous vote is not
required. Symmetrically, the EU residents’ status in the UK will have to be clari-
fied (some of them will opt to stay, since later returns may prove more difficult).

Bilaterally, with the US, the British exit decision will probably receive mixed
signals, since the US itself is in full electoral swing this year. While the current
US administration may hint that a withdrawal could render the UK a less valua-
ble NATO ally, the US conservative circles may actually welcome the decision
and perceive it as an enhanced opportunity for a more flexible bilateral military
relationship with the ally across the pond.

Internationally, Brexit could seriously impact the surge of other European sepa-
ration movements, like in Scotland (the Scots are pro-EU), and Catalonia (the
Catalans are also pro-EU, but so are the Castilian people). In the case of these
two nations, if separations succeed, new negotiations and arrangements will be
necessary for their re-accession to the EU.

Elsewhere in the world, some British commonwealth nations (American/Caribb-
ean, African, Asian, and Australian/Pacific) will take concrete measures, of asso-
ciation or disassociation, depending on their own regional – political, administra-
tive, economic, and trade -- interests.

The Caribbean nations in a post-Brexit era

A special note for the Caribbean nations, since many of them are English-speak-
ing countries, and members of the (former British) Commonwealth of Nations. It
is important to predict possible post-Brexit economic and trade trends for all Eng-
lish-speaking countries, and particularly the Caribbean nations. The reason is a ve-
ry important one. Which is this: if Brexit occurs, we will have another world power
pole, namely the British Commonwealth redesigned. In other words, Brexit will be
the brick in the new architecture of the British Commonwealth of Nations.

The Caribbean nations, on their part, possess a wide array of regional economic
organizations, but we will emphasize in particular two of them: the Association
of Caribbean States (ASC) and the Caribbean Community (CARICOM).

ASC has 25 full member states, (initially 7, but currently) 12 associate member
states, and 20 observer states. CARICOM has 15 full members, 5 associates, and
8 observers. A large part of them are English-speaking countries (aside from the
Spanish-speaking, French-speaking, and Dutch-speaking countries). The English-
speaking countries fall into several categories: parliamentary constitutional monar-
chies (dominions or independent states, like Antigua and Barbuda, Belize, and Ja-
maica) – with Queen Elizabeth II as their monarch and head of state – , republics
(like Dominica, Guyana, Trinidad and Tobago), and Dutch territories with English
as the official language, in addition to Dutch (like Sint Maarten).

These differences may prove more or less important in terms of trade with a post-
Brexit UK, on one hand, and the EU, on the other hand. The Caribbean English mo-
narchies may have a narrower leverage of negotiation with the EU and other states
or group of states, due to their stronger connection to London. In contrast, the Cari-
bbean republics, including the Dutch English-speaking territory of Sint Maarten,
due to their loose connection with London, may actually exercise to a much larger
extent their margin of negotiations with the other world state entities.

In a possible post-Brexit era, the Caribbean nations, on their part, will need to en-
hance and improve the free trade agreements they currently have with the EU (like
CARIFORUM), North America (NAFTA), South Asia, and other regions.

On the other hand, the EU itself has been developing bilateral trade agreements,
or is in negotiation for such agreements, not only with the English-speaking Cari-
bbean nations, but with Spanish-speaking commonwealths, like Puerto Rico.

In conclusion, the time for an honest and efficient answer has come. The question
is: to what point the political constructions, based on inclusion adopted on the ex-
pense of national and local value differences, are viable and durable? Will a conti-
nuous reform work, or dismantling is the solution? Obviously, the British referen-
dum will put this to the test, and provide us with a long-awaited answer.

Tiberiu Dianu is a legal scholar, book author, graduate of the American University Washington 
College of Law in Washington, DC, the University of Manchester Faculty of Law in Manchester, 
UK, and an exchange scholar of the Oxford University in Oxford, UK. He currently lives in Wa-
shington, DC and works for various government and private agencies. The opinions expressed
in the preceding article are those of those of the author alone and do not necessarilly represent
 the views of The Puerto Rico Monitor, its editors or advertisers.

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