Rising Brexit uncertainties testing May’s resolve

By Bi Jing Source:Global Times Published: 2019/2/1 17:33:41

 

Illustration: Xia Qing/GT



In mid-January, UK's House of Commons struck down Prime Minister Theresa May's Brexit plan British and EU officials had previously agreed on, by 230 votes. Later, May narrowly survived a no-confidence vote and set out her revised Brexit proposal to lawmakers the following week. Britain's parliament voted on seven amendments in May's Brexit deal earlier this week, with five of the seven amendments defeated. 

May has sought to reach an agreement again with the EU based on the voting, and it seems the Brexit stalemate is easing. However, the EU has refused to renegotiate hitherto. 

Whatever scenario the Brexit deal might end - a conditional, unconditional, or even delayed exit from the EU, the UK could slide into divisive chaos. The impact on relations with the EU, the US and China would vary accordingly.

Since the start of Brexit negotiations, a strong uncertain sentiment has prevailed among British society. 

In economic terms, the UK's GDP could shrink by as much as 8 percent in a no-deal scenario within a year, the Bank of England, the UK's central bank, warned in November. Such a situation could lead the economy into a recession with consequences worse than the 2008 global financial crisis. 

Judging by politics, it would be difficult to reach a consensus between the elite and middle classes, and also between political parties. Building party consensus is almost impossible. There are serious discrepancies concerning where the UK is supposed to go, reflecting a severe defect of the UK's democratic regime. 

Meanwhile, due to historical reasons and complicated interests associated with Brexit, England is seen distancing itself from the other three constituent countries of the UK - Northern Ireland, Scotland, and Wales. Overall, the UK's internal division might aggravate. 

Brexit will have a lesser impact on the EU and is likely to strengthen its cohesion. According to IMF estimates, in July 2018, the UK leaving the bloc without a deal would cost 1.5 percent of the EU's GDP in a year. Global economy repercussions would be expected.

The UK crashing out might potentially affect European integration, a concern of Germany's. However, it has also forced Germany to reconsider one of the scenarios envisioned by the EU regarding the future of Europe known as a "multi-speed Europe" - "those who want more do more." 

Meanwhile, the UK's departure from the bloc is also to reduce EU difficulties in implementing security and defense policies, a focus of attention for France. In addition, France is expected to become a significant springboard for countries outside the bloc to seek cooperation with EU member countries. 

The positions of France and Germany as the EU core will be consolidated following Brexit. A new friendship treaty was signed between the two countries in Aachen, Germany last week, a move that bodes well for European integration. 

UK ties with the US would become closer following Brexit. Both will see more cooperation in the fields of trade, energy, national defense, intelligence, and antiterrorism, among others. Simultaneously, as Germany and France continue to push for EU integration in defense and propose the creation of a European army, it is imperative the US and UK strengthen military cooperation.

The US still considers Britain an essential cornerstone of its diplomatic, security and economic policies. It can be imagined the US will remain the UK's most important partner on the global political and economic stages. 

With China, Brexit would bring more opportunities than challenges. It has already resulted in uncertainties for bilateral ties, and it would take time for them to re-anchor their relationship. 

Other issues arising from uncertainties are indicative of new opportunities. The UK, while pushing for Brexit negotiations, has also been actively exploring partnerships with non-EU countries. As one of the world's largest markets, China has been regarded by the UK as a vital destination for growth. Therefore, the UK would naturally seek closer ties with China. 

Now is the time for Brexit to trigger a change in Europe. China ought to implement its cooperation with the UK mostly in economic and trade areas and explore the potential for partnering in sectors that include financial services, energy conservation, environmental protection, and healthcare. 

Talent exchanges between both countries are envisaged to move ahead, deepening their bilateral partnership promoting the Belt and Road Initiative.


The author is an associate research fellow at the Chinese Academy of International Trade and Economic Cooperation. bizopinion@globaltimes.com.cn



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