I'm doing my first blog on an Economist article titled, "So what will Brexit really mean?" It entailed prime minister Theresa May establishing a new Department for Exiting the EU and what leaving the EU meant for which market Britain will be a part of, how migration and border control laws would change, and whether or not it'll stay in Europol. Furthermore, publications from Japan's foreign ministry advised Mrs. May to retain full access to the single market - which domestic businesses and finanical lobbies want to stay in - on the account that a "hard" Brexit, which involves leaving that single market without free-trade deals with the EU and third-world countries, would lead to a large drop-off in investment and output. Moreover, Japan advised to avoid customs controls on imports, to preserve the "passports" that allows banks in London to trade across and to let employers freely hire EU nationals. All of these decisions are now in the hands of the British government who are pushing and pulling on different opinions regarding these issues.
What I was most interested in regarding this article was the list of policies Japan insisted Britain should implement; it reminded me greatly of of the ten points in the Washington Consensus and Thomas Friedman's five pillars for economic growth. While they're not all the same they revolve around the theme of limited government intervention in the economy, liberalizing the economic environment and trade and policies within it, and keeping borders open to workers and to allow trade. According to traditional economic models, decreasing intervention on things like trade across borders will increase investment and influx of capital in the long run, especially for British financial institutions. Making this choice seems relatively simple until the Brexiteers realize that they have to make a very tough decision that goes against some of their top priorities. Making the decision to stay in the single market is an economically more sound decision for the country but it also means that Britain has to compromise having full control of money, border control, and laws. It's a really intriguing push-and-pull that Brexiteers in what choices they want to make that'll shape this referendum.
Adam,
ReplyDeleteAnother problem with the view that Britain could leave the EU while maintaining access to the single market is that there is no incentive for the EU and its top countries (France, Germany, etc.) to accede to this. They have an incentive to punish the British for leaving so they are likely to insist on either kicking Britain out of the single market or on making it so that 'Brexit' does not really happen. How does this play into your argument?
A question about countries punishing the British: wouldn't imposing some form of tariffs, quotas, or other restrictions possibly not only hurt the British but also the countries restricting trade with Britain?
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ReplyDeleteWhat I am interested to know is whether or not Britain already has its set of plans in staying in the single market, or did Japan give Britain the idea. I would also want to know whether Japan is giving a basis of rules that Britain should go by to help them out personally, or to help Britain with its decision. I also think it differs from the Washington consensus because of Britain being a developed country, and whether or not Japan really has the authority to say there will be consequences if Britain doesn’t follow their policies. I am sure that Britain is aware of the advantages and disadvantages of not retaining full access to the single market.
ReplyDeleteI agree Stephen and am intrigued to know how Britain plans to move forward. After initially leaving the EU, Britain started to suffer but this could have been expected after a major economic change. If Britain has a plan of how to move forward with open trade and economic policies, leaving the EU could not mean the end of Britain's power. However, the EU exists because of the small countries of Europe realizing their power is stronger together. Without an alliance with the rest of Europe, much is left in the hands of other countries and how/if they will agree to cooperate with Britain.
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