Globalization and the Formation of the European Union
Globalization is the formation of a worldwide network that is part of an economic and social system (CUTERELA 137). Because of globalization, states have united to become the United States. The European Union is a good example, having grown from a six-country single market in 1958 to the current twenty-eight-member European Union (Ioannides 1). Nineteen of the 28 countries currently share a common currency, the euro, which has supplanted the currencies of the other countries. Free movement of persons is also possible, as is a major reduction in trade barriers between the European Union's member states. The idea behind the formation of the union was inspired by benefits accrued through such a union. The benefits include increased foreign direct investment and economies of scale become evident to companies (Kuepper 1). However, some disadvantages are evident especially in the most advanced countries. Free movement of labor for example which is key to the European Union’s existence poses a serious threat to the United Kingdom hence the introduction of the Brexit idea (Ioannides 2).
The Impact of Brexit on the United Kingdom and the European Union
Brexit is a word that is a short form of saying the UK was leaving the EU-merging the words Britain and Exit to obtain Brexit, in the same way as the possible Greek exit from the euro in the past was referred to as Grexit (Hunt and Wheeler 1).Brexit has attracted a debate base on the impact it will have on the United Kingdom and European Union members. This resulted in a referendum which was held on Thursday 23 June 2016, to decide on the way forward where those in support of the exit were 51.9% while those against were 48.1% (Hunt and Wheeler 1).
The United Kingdom's Future Trade Relations and Policies
The United Kingdom will now be involved in trading with the other European countries based on the world trade organization regulation. The effectualization process will involve a few steps before the actualization as still they are pending agreements and obligation the UK has to fulfill to the union. Brexit could be an idea that could have far-reaching consequences since the process was gradual and its termination process definitely will involve various steps.Different schools of thoughts have been advance to argue in term of support and opposition to the idea of Brexit. When one still looks at the world trade organization rules, they still advocate for regional integration for economic growth and prosperity. The main rules focus on how to create a conducive environment for free trade (Lynch 1)
The Effects of Brexit on the United Kingdom
The British government could have put into consideration the issue of the equalization effect. It has been established intuitively, that one assumes that the rich countries systematically lose in a common system. This is partly true. Evidently, the average gross income in Finland and France are lower than in Germany.Finland and France lose while Germany stands to gain. German and France here are affected differently, with France losing significantly although its average income it's lower. Support for this explanation is based on national tax, and transfer systems of this two countries tend to differ despite having various similarities in other dimensions (Bargain, Dolls and Fuest 22). The British government could have considered such policy that could have result in their gains just like Germany as opposed to losing in the Union as France.
The United Kingdom's Withdrawal Bill and Future Laws
The British government should have looked at laws involved since they will determine terms of engagements on trade and foreign policies.This could have helped limit an upsurge of immigrants in the Uk which could have addressed the issue of job struggle for its native citizen. After the referendum on the Brexit, the conservative government has introduced the European Union withdrawal bill to parliament.If it goes through successfully, it will end the application of EU laws in the UK (Hunt and Wheeler 1).The bill commonly referred to as the ‘Great Repeal Bill' is supposed to incorporate all EU legislation into the UK law. The government will henceforth decide on the period to parts keep, change or remove its applicability.Practically such a bill proposal could still be implemented without necessary having to exit the union.
Potential Risks of Brexit and the Future of the European Union
The possibility of a crisis could be rooming in the EU since the gains achieved are so significant that their reversal poses a potential risk with diverse economic consequences. The world is getting globalized, and the benefits derived have been proved to be sustainable in the long term. The idea of controlling immigrants to the UK being the pivotal base of the Brexit idea cannot be allowed to outplay the gains of a single market state.
Considerations for the United Kingdom's Future
The UK should also consider the long-term costs and benefits depending on the plan of action. A good example is that EU wants the UK to settle any outstanding bills before its exit. The bill covers the payment of pension to EU officials, the cost of relocating London-based EU agencies and outstanding EU budget commitments. The real figures are still in dispute as to the exact value ranging from 50bn (£44bn) to 100bn (£88bn) (Hunt and Wheeler 1). Such a debt is huge that could affect the economy of the United Kingdom given that is legally bound to fulfill the obligation under the previous agreement on the union before exiting.
Uncertainties and Potential Consequences of Brexit
Another good example amongst a milage of the issue to be put into consideration before the execution of the exit idea is, will EHIC cards still be valid? This is a card that entitles travelers to state-provided medical help for any urgent medical condition that will require attention.The card was allowed in any EU country and even some non-EU countries. The uncertainty of the card operation is still unclear as no deal yet has been signed on the way forward (Hunt and Wheeler 1).
The Lessons from Greek Exit and the Divide on Brexit
The United Kingdom could be flying blind here since the previous history of such decisions has proved to be fatal or undesirable. A good example is the Grexit where a sizable number of economists and leaders believed that the consequences of Greek exit would be dire. Financial systems were predicted to collapse, and automatically recession would set in after that (Bird 1). On the Brexit idea still, there are warnings by economists and opinion leaders as evident by the divide in the United Kingdom on the prospects of its implication on the economy of the United Kingdom and The European Union in general.
Conclusion
The United Kingdom should re-examine its decision to exit the European Union. The idea of controlling immigrants which was behind the Brexit idea should not be allowed to outweigh the gains and improvements made over the years. The fact that the referendum was a close affair between those in support of the idea and those against the idea shows a need to assess the idea afresh. Ways could still be diversified or invented on how to control immigrants without necessarily exiting the Union.
Works Cited
Bargain, Olivier, et al. Fiscal Union in Europe? DISCUSSION PAPER. Bonn: Iza, 2012.
Bird, Mike. Economists can't decide whether leaving the euro would be a disaster or a blessing for Greece. 17 June 2015. 23 November 2017 .
CUTERELA, Sandu. "Globalization: Definition, Processes and Concepts ." Revista Român (2012): 137-146.
Hunt, Alex, and Brian Wheeler. Brexit: All you need to know about the UK leaving the EU. 13 November 2017. 22 November 2017 .
Ioannides, Professor Yannis M. THE ECONOMICS OF THE EUROPEAN UNION. Boston: Tufts University Department of economics, 2017.
Kuepper, Justin. "Globalization and Its Impact On Economic Growth ." 19 June 2017. The balance. 22 November 2017 .
Lynch, Karen. "WTO and the Rules of Global Trade." 2017. AMERICAN EXPRESS. 23 November 2017 .
