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Brexit: Skepticism and hope

On March 1, 2017 the British government was defeated after the House of Lords said ministers should guarantee EU nationals’ right to stay in the UK after Brexit. The vote, by 358 to 256, is the first Parliamentary defeat for the government’s Brexit bill. However, MPs will be able to remove their changes when the bill returns to the House of Commons. Ministers say the issue is a priority but must be part of a deal protecting UK expats overseas. The bill will give Theresa May the authority to trigger Brexit under Article 50 of the Lisbon Treaty and begin official negotiations. The amendment backed by the Lords requires the government to introduce proposals within three months of Article 50 to ensure EU citizens in the UK have the same residence rights after Brexit. But it could be overturned when MPs, who have already backed the Brexit bill without amendments, vote on it again. The government is expected to attempt to overturn the defeat when the legislation returns to the Commons. The House of Common members expressed their disappointment on the House of Lords demand for an amendment in the Brexit bill. Theresa May’s leadership campaign before she became the British Prime Minister , had articulated the same position. In her view, it would be unwise to guarantee the rights of the three million or so EU citizens in this country, before other EU countries are ready to do the same for British citizens abroad. The opponents said May’s argument as distasteful and even immoral, because many people who have made their lives in the UK could be used, as “bargaining chips” in a negotiation.

Brexit was a decision in England after a referendum but its wisdom had been in question from the very beginning. Brexit is an abbreviation for “British exit,” which refers to the June 23, 2016, referendum whereby British citizens voted to exit the European Union. The referendum roiled global markets, including currencies, causing the British pound to fall to its lowest level in decades. The arguments in favour of the Brexit included recurrent losses to Britain as payments to the EU and also pressure on employment and rents in Britain due to emigrant workers. Ahead of the vote, the government made a last-minute attempt to persuade peers not to change the draft legislation. Brexit Minister Lord Bridges said the government had been keen to reach an agreement with other EU nations on the issue. However, he said, “a small number of our European counterparts” insisted there could be no discussions until the formal Brexit talks begin once Article 50 had been invoked. But most peers wanted a unilateral move from the UK government.

Brexit issues are economic, human and political issues discussed during the campaign about the withdrawal of the United Kingdom from the European Union, which was supported in the Brexit referendum of 23 June 2016 with 52% of voters voting in favour of leaving the EU against 48% preferring to remain a member. According to many analysts Britain would face the adverse economic effect of exiting the European Union.   The President of the CBI said that Britain would face a “Pandora’s Box of economic consequences” if it crashed out of the European Union without a new trade deal in place. The Confederation of British Industry Community (CBI) is the UK’s premier business organisation, providing a voice for firms at a regional, national and international level to policymakers.

 Although the British Prime Minister Theresa May said that Britain would exit the single market and customs union, but it would seek to negotiate a comprehensive free trade deal with the rest of the EU. But many trade experts are highly skeptical that it will be possible to conclude such a deal by 2019, when the UK is due to leave the bloc, raising the prospect that Britain could be forced to trade with the rest of the EU on minimal World Trade Organization rules, meaning it would face tariffs on goods exports to the EU in just two years’ time.

The CBI president said, “A ‘no deal’ scenario may open a Pandora’s Box of economic consequences. The UK would face tariffs on 90 per cent of its EU exports by value and a raft of new regulatory hurdles.” These barriers would hurt firms on both sides of the Channel. The firms in the UK and across the continent firms are worried about this ‘worst-case scenario. Some are getting ready for it to reduce economic damage. A small minority of right-wing economists and a number of Conservative politicians argue that it would be economically better for the UK not to even attempt to sign a new trade deal and instead to relay on WTO rules. But analyst calls such kind of advocacy as dangerous and irresponsible which would ultimately damage the British firms and economy. Under WTO trading rules (which only mean that nations or trading blocs must levy a standard external tariff) British car manufacturers could face 10 per cent levies on exports to the Continent. UK food producers would also face large tariffs and painfully-reduced quotas on exports to the EU. According to one estimate last year the static cost to UK exporters of facing EU tariffs would be a minimum of £4.5bn, based on existing export patterns, and would almost certainly be many multiples of that. Economists from the London School of Economics have estimated that the WTO route would cause an almost 10 per cent hit to UK GDP, relative to otherwise, by 2030.

About opposition to Brexit former Conservative cabinet minister Lord Tebbit  said the debate in the house of Lords  seemed to focus on “nothing but the rights of foreigners”. Shortly after the Lords vote, MEPs in the European Parliament debated the status of EU migrants in the UK. Justice Commissioner Vera Jourova told MEPs that EU citizens in UK and British citizens elsewhere in the EU “deserve to know that their rights will be” after Brexit. She said the matter should be addressed “as soon as possible” but that negotiations could only begin after the UK has triggered Article 50.

The Treaty of Lisbon, signed in December 2007, is the European Union’s most recent constitution – and Article 50 makes provision for countries that want to leave. It sets out the exit process but is deliberately vague – meaning member states could be forced to enter into long negotiations to thrash out the terms of any deal. A second legal challenge is set to further complicate the already labyrinthine Brexit process- that is Article 127. Pro-EU campaigners say Britain will have to organise its extraction from the European Economic Area (EEA) – and therefore the single market – separately to its departure from the EU itself. This is because the UK is currently part of two different agreements with their own exit procedures. Like Article 50 of the Lisbon treaty, which details the steps a country must take to withdraw from the European Union, Article 127 of the EEA agreement sets out the mechanism for leaving the single market. The government will argue that EEA membership ends when Britain leaves the EU, which is expected to happen in 2019. But the legal challenge proposed by think tank British Influence argues that Parliament should be able to vote on whether or not to trigger Article 127, blocking or delaying the possibility of a ‘hard Brexit’.

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