The UK takes “a monumental leap of faith into an unknown economic, financial, and trading future”

As thousands protest in London against the imposition of Brexit on the UK, David Hastings Dunn of the University of Birmingham writes for Spain’s La Razon and Chile’s El Mercurio:

March 29’s announcement that the UK will trigger the formal process to leave the European Union, under Article 50 of the Lisbon Treaty, has been much expected. That said, the markets may react and the pound may fall further as the May Government turns the advisory referendum of last June into concrete action.

Brexit’s process has been slow as the full implications of what leaving the EU means for the UK become apparent. For the many who thought that the referendum was a free vote on immigration — or that it “wouldn’t make much difference” — the past nine months should have disabused them of that fantasy. Prime Minister Teresa May has read the logic of Brexit as not only leaving the institutions of the EU but also departing the single market and the Customs Union. She has opted to reject the trading relationship on which Britain has built its prosperity for the last 43 years in favor of the chimera of a global trading role with partners yet to be identified and on terms yet to be negotiated. It is a monumental leap of faith into an unknown economic, financial, and trading future.

Although they are often presented as one set of negotiations, the Brexit talks are multi-dimensional. The first set will concern the costs and liabilities owed by Britain for undertakings embarked upon by the EU as a whole. Some estimates suggest that the UK owes 60 billion Euros (about £50 billion), as London’s lawyers dispute the legal requirements to pay even a penny.

Also under negotiation will be the status of UK nationals in other EU states and of the many Europeans resident in the UK. Spain for example, does not allow its nationals to have dual nationality, so the many British pensioners enjoying a sunny retirement there may face the prospect of a return to cold Brexit Britain or adopting Spanish nationality.

By far the most difficult set of negotiations are those over trade and the relationship with the Single Market. Britain’s stated position is that it wants a free trade agreement with the EU — the same access to the single market for which it currently pays through membership of the European Union — while also enjoying the right to strike free trade agreements on a global scale, providing a back door for access to the EU market.

There is very little prospect of this being granted, for to do so would offer other states no incentive to stay in the EU as they demand the “UK model”. And even if Britain offered to pay for access to the single market, its unwillingness to accept the free movement of peoples will be a stumbling block for the EU. Most experts believe that an agreement is unlikely to be concluded within 24 months, an outcome that could be catastrophic for the UK and for Europe’s integrated supply chains in such sectors as the automotive industry as tariffs are imposed on all movement of components and finished goods. An interim or transitional agreement is probable, but exactly what this would be is difficult to predict from this vantage point.

As if the Brexit process was not difficult and destabilizing enough for London, the prospect of being wrenched from Europe has reopened issues of Scottish independence and the future status of Northern Ireland. It is now open to speculation whether Scotland will leave the UK before the UK leaves the EU.

TOP PHOTO: Scene from the anti-Brexit protest in Westminster on Saturday (Jeff J. Mitchell/Getty)

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