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Brexit Aftermath
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Brexit Aftermath
Introduction
Despite warnings from economic experts, UK proceeded to cast almost 52% votes in
favor of the exit from European Union in 2016 (Lee, 2016). The move has had profound impacts
on international trade. For instance, trade between UK and EU fell by 21% and that with other
countries fell by 0.8% (Brakman et al, 2023). Brexit also led to the changes in globalization and
free trade policies. The of Brexit argued that EU law prevailed over national law, thus
undermining the doctrine of parliamentary supremacy, one of the sacred tenets of the British
constitution. They also said that EU regulations were detrimental to UK’s economy and that the
influx of people from other EU member state was having a negative impact on availability of
many services, such as NHS, schools, and housing. This report will focus on the causes of
Brexit, the effect of Brexit on globalization and free trade policies, the place of nationalism and
effects on the Canadian trade and economy.
Key Driving Factors
Most intellectual-minded Britons supported Brexit since they believed that the EU
threatened the British sovereignty. They argued that EU law took precedence over national laws,
meaning that in conflicts between national legislation and EU law, the latter prevailed (Lee,
2016). This dynamic challenged the principle of parliamentary sovereignty, a cornerstone of
British constitutional principles.
Also, Boris Johnson complained that EU regulations were strangling UK’s economy. EU
has many regulations regarding trade, environmental standards, and labor laws. Critics claimed
that the regulations restricted UK's ability to tailor policies to its own needs and preferences. A
leading message often used by the Leave campaigners was that the influx of immigrants from
other EU countries was placing a burden on essential services in England like the National
Health Service (NHS), schools, and housing. Some voters complained that Europeans were now
competing with the Britons for jobs and this has made it difficult for them to secure decent
paying jobs (Ammendola, 2019). Many people were dissatisfied with the EU’s policy of free
movement within the EU countries. This policy made it difficult for the UK to regulate the flow
of people into the country as the immigration rates increased. Brexit was undertaken with a view
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to reclaim independence over immigration and sovereignty in the aspect of who can freely
immigrate to the UK and live or work there.
Impact of Brexit on Globalization and Free Trade Policies
Brexit has had damaging effects on UK’s globalization. UK did not record any export
growth during 2019Q1–2022Q1 compared to other top trading countries (Du et al., 2023).
Figure 1 Trade in goods of leading trading countries in 2019–2022 (Du et al., 2023)
The decline in exports is majorly attributed to the increased barriers to international trade due to
Brexit. Also, Brexit had a negative effect on UK’s attractiveness as an investment destination.
This uncertainty has led to reduced private investment. Brexit has led to increased non-tariff
measures including regulations, standards, licensing, and quotas (Du et al., 2023). These barriers
are considered as significant because they add more compliance costs and paperwork in the
process for most businesses. Business organizations, therefore, have to ensure their products
conform to the UK and EU standards even though the two may not tally. This has magnified
regulatory costs affecting most firms that operate in the international business environment
through the concept of cross-border trading activities.
UK got in to the Trade and Cooperation Agreement (TCA), which came into effect on
January 1, 2021. The TCA outlines the post-Brexit relationship between the United Kingdom
and the European Union. One of the key elements of the TCA is that it allows for tariff-free and
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quota-free trade in goods between the UK and the EU (Eckes & Leino-Sandberg, 2022). This
provision helps prevent the imposition of additional costs on businesses and consumers that
would have resulted from tariffs and quotas. By maintaining tariff-free access, the TCA supports
continued trade flow and economic stability. However, the agreement does not cushion UK
against non-tariff measures. For example, new border controls for food imports from Europe
planned after Brexit, which are to be implemented in 2024, are likely to worsen the situation.
The UK government has postponed health and safety inspections from EU food imports for the
fifth time within the past three years due to concerns that the additional measures will increase
food prices and negatively impact food supply chains (Ziady, 2023). These checks may be
expected to increase the import prices due to the required time to carry out inspections and
processing. This will not only reposition the cost structure for organizations that rely on imports
from Europe, but may as well disrupt business supply chains. For instance, there could be a delay
in the importation of fruits, vegetables, and other perishable products and these would rot and
lead to more wastage, meaning that the overall cost of these products would be higher and their
availability on the shelves less frequent.
Role of Nationalism on Brexit
There is no doubt that nationalism was a dominant force in the Brexit process as it
defined people’s longing for political, economic, and cultural self-governance while preserving
national identity. The “Take Back Control” mantra captured the spirit of nationalism in its core,
that is restoration of control from EU which many saw as erosive of Britain’s democratic values
and that of parliamentary sovereignty. One point that was advanced on economic reasoning was
the free ability to enter into bilateral agreements and avoid EU red-tape (Brown, 2017). From a
cultural perspective, the priority was placed on the restriction of immigrants to preserve the
national identity and to minimize the burden of social programs.
Nationalism was boosted by past imperialism, Britain’s longing to be a world power
again, and the population’s doubts regarding joining the European Union. Sovereignty has
always remained a cardinal factor in the definition of Britain and its people. The notion that EU
membership degraded this independence had more people in Britain agreeing to Brexit (Zoega &
Arnorsson, 2018). EU law was considered to be above national laws due to the supranational
character of the EU, which was viewed as an infringement upon the UK’s principle of
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parliamentary sovereignty. Some Brexit voters hoped to regain their country’s sovereignty and
make their own decisions without interference from the EU. These issues were very effectively
addressed by the populist leaders such as Nigel Farage and Boris Johnson who depicted the EU
as a remote and unresponsive administration far from the concerns of ordinary Britons. This
nationalism combined with anti-establishment and populist sentiments paved the way towards
the decision to Brexit.
The Impact on The Canadian Economy and Trade
Since the U. K. is not considered a member of the EU anymore, the Canada-U. K. trade
no longer has its relationship qualified by the Canada-European Union Comprehensive
Economic and Trade Agreement referred to as CETA. Therefore, Canada and United Kingdom
have entered into and approved the Canada-United Kingdom Trade Continuity Agreement
(Canada-U. K. TCA). The agreement was signed and took effect on the 1st of April in the year
2021 (Global Affairs Canada, 2019).
The Canada-U. K. TCA offers certainty, stability and consistency to Canada’s
exportation and importation business with United Kingdom. It maintains the overall advantage of
CETA and Canada’s competitive edge in the UK market, which would continue to import 98%
of Canadian goods without tariffs (Global Affairs Canada, 2019). Canada and the U. K. began
free trade negotiations and aim at establishing a high-standard and comprehensive free trade
agreement that reflects the distinct characteristics of the two countries’ trade relations. The trade
relationship between Canada and EU is still regulated by CETA which also remains unaffected
by the Canada-U. K. TCA. This dual approach allows Canada to maintain strong trade ties with
both the EU and the UK and ensures that Canadian businesses can benefit from access to both
markets. This is particularly important given the integrated nature of global supply chains, where
products and components often move between multiple countries before reaching their final
destination.
Conclusion
Brexit process involved different political, economic, and cultural aspects connected with
nationalism and has influenced the UK and its relations with other countries within the scope of
trade. Dreams about the return of the country’s independence, the rejection of excessive
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legislation, and regulation of immigration also contributed a lot to the decision on leaving the
EU. The TCA reduces some economic disruptions as it retains the existing free trade in goods,
however non-tariff barriers persist to affect businesses. Brexit has implications for UK
globalization and investment appeal, which include higher trade costs and slower export
expansion. The Canada-United Kingdom Trade Continuity Agreement (Canada-U. K. TCA) is
one of the agreements that have been put in place in a bid to continue trade stability after the
Brexit period. Brexit shows the interconnectedness between nationalism and trade policies. One
wrong move can have a significant impact on a country’s trade and economy due to the
implications of trade policies. In the search for sovereignty, nations should aim to strike a
favorable balance between individualism and beneficial trade agreements or policies.
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References
Ammendola, G. (2019). Brexit, the European Union, and globalization: political and economic
perspectives. Brexit, the European Union, and globalization: political and economic
perspectives.
Brakman, S., Garretsen, H., & Kohl, T. (2023). EXITitis in the UK: Gravity Estimates in the
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Eckes, C., & Leino‐Sandberg, P. (2022). The EU‐UK Trade and Cooperation Agreement–
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safety-brexit/index.html
Zoega, G., & Arnorsson, A. (2018). On the causes of Brexit.JEuropean Journal of Political
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