Helen Wong MBE, Corporate Solicitor at Setfords, offers her thoughts on whether or not the United Kingdom might re-enter the European Union in this guest opinion piece.
The United Kingdom’s rallying cry to reclaim its political and economic sovereignty was “Get Brexit Done.” Doing Business After Brexit, written by myself and all the Brexit specialist lawyers, stretched 440 pages and promised such a seismic shift that Bloomsbury commissioned me to write it.
But the truth of our post-Brexit world is a bit of a damp squib, and it’s opened up a huge hole of lack of labor now that the ‘cheap labor’ is gone. Taxes and inflation have gone up despite the fact that deregulation was supposed to make Britain more competitive. Despite the setback, the path back to EU membership is not available to us (because no EU member has asked the UK back to rejoin) and is unlikely to gain traction in the face of the inevitable political squabbles and scandals that will inevitably follow.
It has been suggested that Boris Johnson’s “reign of chaos” has caused irreparable damage to Britain’s reputation and foreign ties, making it impossible for the country to rejoin the EU. Trade with the EU has been a priority for ministers, but tensions between the United States and the EU remain high.
There are counter-arguments from some people. Michel Barnier, who was the lead negotiator for Brussels, has said that the “Door Remains Open” for the United Kingdom to rejoin the European Union. However, critics like Derrick Wyatt (an Oxford University professor who has since retired) question whether we can tell the difference between “a missed opportunity and a poisoned chalice” given the complexity of the UK potentially being one of the biggest contributors if they rejoined and us taking on EU debt.
While we may be struggling to deal with the added complexity that Brexit has introduced, this line of reasoning implies that turning back may not be the answer.
When, if ever, will the NI Protocol be settled? Brexit supporters worry it will lead to the United Kingdom’s dissolution. Do they have a point?
Where did the Northern Ireland protocol try to fix the issue that Brexit created?
The problem is that the Brexit agreement requires additional inspections of some products entering Northern Ireland. Anxiety-inducing “burdensome bureaucracy and paperwork” results. Products in Northern Ireland only have a “one-sixth” chance of entering the EU, yet they all go through the same procedures anyhow.
Second, can you explain the NI Protocol to me?
A new goods checkpoint at Northern Ireland sea ports on some products (e.g. eggs, sausages) from Great Britain would effectively create a new trade border in the Irish Sea, and the NI Protocol was created to prevent this from happening.
After that, events?
In a letter to agri-food producers, the Department of Environment, Food, and Rural Affairs (Defra) announced plans to eliminate customs checks for agr-food commodities entering and leaving the United Kingdom, thereby facilitating more seamless domestic commerce.
A dual regulatory structure was also envisioned, allowing businesses in Northern Ireland to operate in accordance with either UK or EU rules, depending on their trading partners.
However, this was done unilaterally by the UK government without any involvement from the Irish government. On 30 June 2022 (when he was questioned), Irish Deputy Prime Minister Leo Varadkar indicated that Number 10 was “siding” with unionists in wanting to dismantle portions of the arrangement agreed upon in 2019. One could argue that this action weakens economic ties between the United Kingdom and Ireland and boosts ties between Northern Ireland and the European Union.
The DUP argues that Northern Ireland’s status in the union is harmed by the convention. Some have argued that the dominant nature of the Government is a strategic blunder for those who wish to preserve the union, as doing so will only drive more people away.
Regrettably, efforts to reduce bureaucratic burdens on businesses have been stymied by politics.
Even “Sinn Féin” has said that England should “step up to the plate” and ensure the success of the Northern Ireland protocol, so clearly this is the worst case situation. That’s a strong indicator that, despite the tensions, people care more about being able to trade and have access to food than they do about reuniting as one nation and breaking away from the United Kingdom.
Third, is it possible to tell for sure what effect Brexit has had? Even if it’s been three years, it’s still just been three years if you look at it that way.
In the fourth quarter of 2021, goods imports from the EU were down 18 percent on 2019 levels, although the complete impact is unknown. There aren’t enough alternative trade agreements (primarily with countries like Australia, New Zealand, Switzerland, and Japan) to make up for the loss, therefore imports and exports have dropped dramatically.
Office for Budget Responsibility reports that “UK saw a similar collapse in exports as other countries at the start of the pandemic but has since missed out on much of the recovery in global trade” due to the combination of increased energy prices and the recession. This is a problem since fixing it will take a long time. As an example, the British Chambers of Commerce has issued a rather pessimistic forecast: “The annual expectation for GDP growth in 2023 is now -1.3%.”
It’s also tricky to disentangle the challenges offered by Brexit, the epidemic, and the current conflict in Ukraine. The British economy likely suffered as a result of the pandemic and subsequent lockdowns. That’s not to say there aren’t glaring problems; for example, the cessation of “free movement of people between the UK and European Union” resulted in severe labor shortages because many EU migrant workers were compelled to return to their home countries.
As a result, investors are wary of putting money into the United Kingdom because of its uncertain labor market and low levels of international trade. According to the BBC, “investment has stalled” ever since the referendum because of “uncertainty” and “the unsettled issue of the Northern Ireland Protocol.” The aforementioned problems with trade and GDP are exacerbated by a lack of investment, so this is a major concern.
In what ways might this matter down the road?
It’s tough to make accurate predictions about the future because of unknown variables (much like the epidemic or the conflict in Ukraine), but there’s reason to be optimistic about trade and some new trade accords with other countries based on what we know so far. The expansion of India’s economy, which would “benefit from lower trade costs, boosting economic activity in both countries’ areas of competitive strength,” is one candidate.
When combined with the freeports (discussed further on), this bodes well for the future of trade and the United Kingdom.
In addition, we can speculate about the future based on some of the government’s initiatives that would considerably improve the economy. Rishi Sunak, for instance, proposed establishing eight freeports and two greenports to facilitate trade and, by extension, make the United Kingdom more appealing as a trading partner.
“thousands of high-quality jobs in some of our most disadvantaged communities,” as the government puts it, would help with the oft-mentioned “leveling up” initiative. If it succeeds in bringing in investment, then these areas will experience economic growth.
The United Kingdom will be able to make a variety of significant improvements to its standard of living once it leaves the European Union. The goals of this legislation include removing barriers to the development of artificial intelligence in the United States and allowing the use of genetically modified crops for food production.
Despite the EU’s ban on all forms of genetic manipulation of crops, researchers have modified tomatoes to make them a better source of vitamin D. Many people in the UK have vitamin D insufficiency, thus this is important. This is only one example of what we can accomplish when we ignore EU regulations and red tape.
By 2023, the UK will have the opportunity to develop new laws that best fit the needs of the country and grow the economy, thanks to the introduction of the new Brexit Freedoms Bill to Parliament on Thursday, 22 September 2023, which will end the special legal status of all retained EU law.
Given how deeply ingrained EU law is in domestic laws, this is no simple undertaking. Tax, contract, employment, healthcare, real estate, intellectual property, and family law are all in for changes.
The idea is to replace years of cumbersome EU legislation with a more nimble, home-grown approach to regulation that will be to the benefit of people and businesses across the UK. If these legislative constraints were lifted, businesses and the economy in the United Kingdom would be free to explore new frontiers of innovation and development.
With the bill’s passage, the United Kingdom will become one of the world’s best-regulated economies, and businesses will have more confidence to invest and create jobs as a result. Keep an eye on this situation to see if it develops.
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