Negative and Positive Outcomes of the British Exit from the European Union
Economically speaking, the exit of the United Kingdom wrought both negative and positive issues. In comparison to the members of the European Union that remained, the UK would face higher costs of trade in regards to the export and importation of goods that were guided by the policies of the European Union agreements. Since these trading exchanges amounted to around half of all those that the United Kingdom conducted in, it would mean that their transactions subsequent to the Brexit are all subjected to a higher expenditure. Some of the trading subsequently experienced reduction due to cost constraints and as such, the lower rate of foreign investment and trade lowered the standard incomes of the United Kingdom. The ‘soft Brexit’ ultimately closes off the U.
Begg and Mushövel give an instance in their excerpt discussing long term effects of the Brexit to the United Kingdom’s economy stating, “If UK maintained its trend growth rate up to 2030, the economy would be some 30% larger, and the ‘losses’ envisaged are relative to that projection. A loss of 6% would, therefore, mean 24% growth instead of 30%, but would also mean that the UK economy would be smaller indefinitely” (Iain Begg and Fabian Mushövel, 2, 2016). Therefore, deriving from their example, it is arguable that in the long run, the losses incurred can be sourced from other business avenues. Following the argument that the United Kingdom will experience a long term loss of GDP, it means that, from a macroeconomic perspective, a lower employment level is foreseeable in UK’s future.
Facts to support this argument can be drawn from the percentage of demand that other countries that constitute the European Union amounts to about 12% of the demand that encompasses services and goods from United Kingdom. The growth of these sectors continually became an important component to UK;s overall efforts in exportation in the fields of major manufacturing such as electronics, aerospace, cars, and pharmaceuticals. However, this majorly affects the companies conducting trade in large quantities such as manufacturing companies. A clear disadvantage that the United Kingdom faces is their automatic exclusion from the trading deals that the European Union makes with other countries such as the undertakings with the United States of America and the Japanese. The trading subsequent trade activities between the European Union’s member states with both the named countries are projected to cast an improvement on the real income through these deals by 0.
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