Countries HAVE ALWAYS looked beyond their borders to ‘Trade’….
Following the Trump Isolationist pipe dream does NOT make sense or work….
After 10 years?
The Brit’s are learning this….
Their economy has shrunk around 5% after leaving the European Union…
The American Economy is going thru the aftershock of Trump’s Tariff experiment that was illegal and harmful to the American economy also….
What will the Brits do?
Just before Britain’s fateful referendum on its membership to the European Union 10 years ago, the government of the day gave a stark warning. A vote to leave the bloc would lead to “an immediate and profound shock” to the economy. By a slim margin, the public voted to leave anyway.
The economic warnings were wrong, but only in their timing.
Brexit has damaged the British economy and the costs have steadily accumulated over the past decade, greatly outweighing any benefits, economists say. More visibly, Brexit has unleashed a torrent of political instability: The country will soon get its seventh prime minister since the June 23, 2016, vote, after Keir Starmer announced his resignation on Monday.
The turmoil has led to a sense of regret: In a recent poll, nearly half of Britons said that Brexit was going worse than expected, up sharply from five years ago. Another survey found that just over half would support rejoining the European Union.
The economy is smaller than it would have been.
In 2016, Britain’s government assumed that a vote to leave would mean an immediate rupture of the country’s trade ties with the 27 other members of the European Union. Instead, there were years of negotiations. Britain didn’t officially leave the bloc until the end of January 2020, and even then there was an 11-month transition period. That obscured the economic effects because trading rules didn’t fundamentally change until 2021, four and a half years after the vote.
The Covid pandemic, an energy crisis and other events have made it difficult for economists to untangle Brexit’s effect on the economy. But many have tried. One widely referenced study, led by Nicholas Bloom, a Stanford professor, estimated that Brexit has reduced Britain’s gross domestic product by up to 8 percent, “with the impact accumulating gradually over time.”
While other economists quibble with that study’s methodology, broadly they agree that Britain’s economy is 4 to 6 percent smaller than it would have been if it had stayed in the European Union, a substantial loss of output. That means lower tax revenues to fund government spending and a slower improvement in people’s living standards.
The Office for Budget Responsibility, Britain’s independent fiscal watchdog, believes that Brexit will reduce the country’s long-run productivity, which has lagged other major economies’ since the global financial crisis, by 4 percent.
Most of the economic cost has come from adding trade friction with the market of 450 million people on Britain’s doorstep.
A 2021 trade agreement kept tariffs mostly at zero, but it raised other barriers to trade by introducing extra paperwork, border checks and new regulations. Brexit reduced Britain’s exports of goods and services to the European Union by about 12 percent and imports from the bloc by about 16 percent, according to the Centre for European Reform, a research group….
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What about the next 10 years?
As the British economy struggles under stubborn inflation, a heavy debt burden and higher borrowing costs, the idea of reversing some of Brexit’s effects has grown more alluring. The front-runner to become the next prime minister, Andy Burnham, has called Brexit “damaging.”….
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