Next week on June 23 people in Britain will vote on whether to stay or leave the 28-member European Union. British exit, or popularly known as Brexit, is the most important decision they will vote on in decades.
The EU began with the formation of the European Economic Community (EEC) in 1957, known as the Common Market. Britain didn’t join until January 1, 1973. The European Union was established under its current name in 1993. But for many years there have been rumblings about whether the U.K. should stay under the EU umbrella.
They’re about to find out.
This is a very big deal for the Brits. And it’s more than a passing deal for Canada since we still share a head of state with Britain. No country has left the union before and, in fact, more countries have joined in the past decade. So if the Leave camp wins, the fallout could be, at least initially, painful with perhaps some unintended consequences.
The EU is the world’s largest trade bloc so Britain would have to engage in re-negotiated trade deals. There would be some economic uncertainty, something the financial markets hate, and no doubt the British pound would take a hit.
But a knock-off of Britain leaving the EU that could affect Canada is the newly minted Canada-EU trade deal (CETA) which is expected to be ratified later this year. Right now, the deal with the EU includes the U.K. intact within the 28-nation pact. But a Brexit outcome could result in changes to the deal and a separate trade deal with Britain. In the groundswell of political and economic furor should the Leavers win that could be shelved for some time.
Boris Johnson, the former Mayor of London and a heavyweight Leaver, said Britain should follow the model of Canada as a good example of a country that knows how to cobble together free trade deals with the rest of the world while protecting its borders.
According to Statistics Canada, Canada’s exports to the U.K. in 2015 totalled $15.1 billion The Canada-U.K. merchandise trade in 2013 was $22.4 billion.
Why do Brits want out? Follow the money. The U.K. is a net financial contributor to the EU. The money is used across Europe to create a level playing field for the poorer member nations. In 2013 it topped $17.4 billion. The U.K. could be forced to adopt the Euro over its pound by 2020. Then there’s the migration muddle with the Brits powerless to control the number of people entering the country. Adding salt to the wound is the right of migrants to claim welfare benefits off the backs of taxpayers. Another irritant is European control over U.K. laws and Britain not having enough influence over decision-making.
Polls have been running neck and neck but in the last two weeks the Leave camp took the lead with 53 per cent compared to the Remainers at 47 per cent. This week it narrowed to 51 to 49 per cent for Brexit. Broadly, voters in professional occupations favour staying in the EU while skilled manual workers are pumping to leave.
An Ipsos Mori poll of 600 economists resulted in 88 per cent who said an exit from the EU would damage Britain’s economic growth prospects for the next five years.
In a YouGov poll, the most pro-EU regions are Northern Ireland, Scotland, and London; the most pro-Brexit is the Midlands (central England). Overall, five regions are pro-EU while seven are pro-Brexit. By age? Some 73 per cent between 18 and 29 are pro-EU while 63 per cent over age 60 want to leave.
Either way, the Brexit vote is going to make fascinating viewing.