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Consequences of Brexit: What challenges lay ahead?

Author : Georgiy Kuhaleyshvili

Source : 112 Ukraine

After three and a half years of Brexit-related political crisis in the UK, change of three governments, early parliamentary elections, fierce social debate, House of Commons supported an agreement on Brexit
12:52, 24 December 2019

Unian

After three and a half years of Brexit-related political crisis in the UK, change of three governments, early parliamentary elections, fierce social debate, December 20, the vast majority of House of Commons supported an agreement on exit from the European Union with amendments by Prime Minister Boris Johnson.

By the end of the year, the bill should be approved by the House of Lords. Then the ratification procedure will take place. British Queen Elizabeth II called for the settlement of all legislative formalities related to Brexit by January 31, 2020, and the start of negotiations with the EU on a free trade area.

Johnson's Conservative Party won early parliamentary elections on December 12 and got the majority of the seats in parliament. The UK will follow the rules of the European Union in the socio-economic sphere, have access to the Common Market, participate in the customs union, transfer funds to the European budget during the transition period until the end of 2020. Brexit supporters celebrate the victory.

After a formal exit from the EU, the United Kingdom would face not only new opportunities but also serious challenges.

Related: UK’s House of Commons approves agreement on Brexit

Irish riot

After the transition period, political tension in the British regions might increase, where the majority of the population voted against Britain leaving the EU in a 2016 referendum. Separatists may appear in Northern Ireland.

The Sinn Fein party (left-wing Irish republican political party active in both the Republic of Ireland and Northern Ireland, - ed.)in its election manifesto identified as priorities the opposition to Brexit, the referendum on the unification of Northern Ireland and neighboring Ireland, and the preservation of membership in the European Union. Prior to the referendum, separatists intend to seek special status for Northern Ireland as part of the UK.

Although the local parliament of Northern Ireland is dominated by a coalition led by the Democratic Unionist Party, which advocates retaining the region as part of the UK, in recent parliamentary elections, supporters of the union with Ireland - Sinn Fein and the Social Democratic Labor Party - received more seats in the House of Commons than unionists.

Related: Tusk receives Johnson's letter relating to Brexit postponement

One place went to the Northern Irish liberal party, the Alliance, which strongly opposes Brexit. In total, 18 seats in the British Parliament are assigned to the Northern Irish deputies. The separatists will achieve their goals in the heart of London, with solid support in Belfast.

According to a survey by Lord Ashcroft, 46% of Northern Ireland residents support secession from the United Kingdom and joining Ireland (45% of respondents are against, and the rest have not decided).

Sinn Fein uses Brexit as an excuse to secede from Britain, despite the compromises proposed by London. Johnson persuaded Brussels to exclude the backstop clause from the agreement, which provided for the preservation of the British region of Northern Ireland in the EU customs union after Brexit.

Related: Would early elections in UK solve Brexit issue?

Northern Irish separatists from the Sinn Fein party threatened to hold a referendum on the region’s withdrawal from the United Kingdom if customs controls were introduced at the border with neighboring Ireland.

An early version of the agreement stated that if, until the end of the transition period, the British government and European officials did not figure out how to keep the Northern Irish border with Ireland open, British autonomy would forever remain in the EU customs union.

According to the current version of the agreement, Northern Ireland will leave the EU Customs Union along with other parts of the United Kingdom. The British authorities will not arrange checks on the border section of Northern Ireland and Ireland, and duties will be levied only on goods imported from other regions of the UK.

Scottish Catalonia

In Scotland, events might develop according to the Catalan scenario. Scotland has been part of the UK since 1707. In this British region, the situation for Johnson is even more complicated than in Northern Ireland, since the separatist "Scottish National Party" dominates the local parliament, and in the parliamentary elections received 47 of the 59 seats assigned to the Scots in the House of Commons.

Scotland's first minister, Nicola Sturgeon, sent a letter to Johnson on December 19 demanding that the local parliament have the right to hold a second referendum on independence. The first referendum took place in 2014, and then 55% of Scots voted against secession from the United Kingdom. However, the Brexit issue did not stand then.

Related: Would early elections in UK solve Brexit issue?

Johnson refuses to make concessions to the Scottish separatists. Sturgeon is sowing reactionary sentiments, insisting that besides independence, Scotland has no alternative development paths. After the transition period expires, Scottish exporters will lose access to the Common Market. The Scottish authorities are interested in concentrating financial flows in their hands and controlling the production and sale of energy from the North Sea shelf.

Sturgeon can take his supporters to the streets, sabotage the decisions of London until Johnson gives the go-ahead for a second referendum.

Like colleagues from Spanish Catalonia, Scottish authorities can hold an illegal referendum on independence. The Scottish separatists have a solid social base for organizing provocations and protests. According to a YouGov poll, Scotland’s independence is supported by an active minority - 44% of the region’s population (56% of the respondents are against).

Problematic Gibraltar

The fate of Gibraltar after Brexit remains a sensitive issue for the British government. Gibraltar has been a part of Britain since 1713. In 2016, over 95% of the population of Gibraltar voted to retain Britain as part of the EU. Overseas territory has its own banking system.

The basis of the economy of the overseas territory is offshore banking, the service sector, repair and refueling of commercial vessels. Not least are trade and economic relations with the EU. Gibraltar does not have its own agriculture. Every day, 9,000 Spanish citizens travel to work in Gibraltar.

Brexit has become a stumbling block in relations between Britain and Spain, which advocates the joint ownership of Gibraltar. Until 1713, the territory was ruled by the Spanish crown. Last year, Spanish Prime Minister Pedro Sanchez threatened to veto the Brexit agreement if negotiations were not held on the status of Gibraltar.

Related: EU to postpone Brexit until February 2020 if Johnson does not agree with British parliament

At that time, there are some agreements that London would coordinate with Madrid any decisions regarding Gibraltar.

One of these decisions will be the planned agreement on a free trade zone of Great Britain and the EU. In 2018, the British government decided to extend to Gibraltar any negotiations with the EU after Brexit. There are concerns that Spanish authorities will block trade negotiations between the UK and the EU in order to influence Gibraltar's status change.

Gibraltar Chief Minister Fabian Picardo on December 17 urged the British authorities not to extend the effect of the agreement on a free trade zone with the EU to overseas territory since the people of Gibraltar do not want to be trapped. The inhabitants of Gibraltar want to remain part of the UK. The fears of the Gibraltar authorities could be a hindrance to the upcoming UK trade negotiations with the EU.

Trade negotiations

To some extent, Johnson complicated his task, excluding the possibility of extending the transition period after December 31, 2020. He has only one year to conclude agreements on a free trade zone with the EU, the USA and, possibly, some countries of the British Commonwealth. Otherwise, British businesses will have nothing to compensate for the loss of access to the Common Market.

The UK plans to begin negotiations on a free trade area with the EU in February 2020. President of the European Council Charles Michel believes that in exchange for providing the UK with conditions for transparent competition, the EU will agree to conclude an agreement on a free trade zone with zero duties and quotas.

However, as practice shows, this is a long process. EU trade negotiations with Canada lasted over 8 years, with Japan - over 6 years, with Singapore - 9 years. It is likely that before the end of the transition period, the UK and the EU will not have time to agree on the terms of cooperation in the field of services, fishing, and to settle relations between Gibraltar and Spain.

Related: Brexit: There's another letter Johnson sent to EU

Europeans demand to maintain access for their agricultural producers to the British market, while the UK may find suppliers in other countries whose goods are lower in price. The question will arise in regulating the activities of European automobile manufacturing companies BMW, Volkswagen in the UK after Brexit.

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