Since the completion of the referendum in June 2016, many experts questioned whether the resulting implications in many spheres would outweigh the expected benefits (Bulmer and Quaglia, 2018). With multiple disruptions occurring since that moment including the global COVID-19 pandemic, these original predictions may need to be re-appraised to better understand the current status quo.
While official figures related to export and import volumes may not have decreased substantially after the referendum, they had been demonstrating a gradual decline over the following several years (De Ville and Siles-Brugge, 2019). These effects are largely associated with the low tolerance for uncertainty within the highly liberalised global economy that openly promotes globalisation and unification. With the original motivation for Brexit being largely realist rather than liberalist, the threats of global supply chains disruption in the case of the ‘hard’ Brexit scenario have already informed many past partners to reconsider their procurement and distribution decisions. For example, this sample dissertation discusses why it is problematic now for UK-based NGOs to obtain EU funding. To know more about the economic effect of Brexit on businesses inside the UK, read this essay.
With COVID-19 disrupting many European economies, it is perfectly understandable why the EU government is implementing various reforms and support policies that may be viewed as borderline protectionist and nationalist (D’Erman, 2021). These measures overlap with the lack of clarity regarding the visa policies introduced in January 2021. The 90-day allowance provided to the citizens of both parties and governmental support of local employment in the EU are gradually reducing the attractiveness of the UK as an employer for EU workforce members. In the short-term perspective, this has already created substantial staffing deficiencies in many spheres such as the national healthcare system and the agricultural sector.
One of the greatest Brexit-related threats for multinational companies was the exit of the UK from the Single EU Market (Moschieri and Blake, 2019). While the two entities managed to sign the Trade and Cooperation Agreement on 24 of December 2020, this document guaranteeing free and liberal trade between them could be viewed as severely lagging behind the urgent business needs of thousands of organisations. With almost 5 years passing between the referendum and the clarification of corresponding provisions, this delay has created a major sense of instability. This situation has had a highly negative effect on the import and export streams with many international supply chains being disrupted as a result. The problems are further intensified by the increasing gaps in national legislations as the UK starts to re-introduce its own norms and regulations that are different from those used in the EU in many aspects (Burns et al., 2019). These additional barriers can require new certification or customs clearance procedures and may undermine the effectiveness of the recently coordinated free trade agreements.
With Brexit already creating an annual deficit of 14 billion euro, the predicted recession in the EU is expected to amount to 8-10% in the best-case scenario (Hadjimichalis, 2021). This situation will probably lead to further protectionist measures and economic nationalism on part of the ‘frugal four’ influencing the European Parliament. While some economic agreements have been reached at the end of 2020, continued free trade agreements may not be able to offset the existing impact of regulatory and organisational uncertainty.
Bulmer, S. and Quaglia, L. (2018) “The politics and economics of Brexit”, Journal of European Public Policy, 25 (8), pp. 1089-1098.
Burns, C., Gravey, V., Jordan, A. and Zito, A. (2019) “De-Europeanising or disengaging? EU environmental policy and Brexit”, Environmental Politics, 28 (2), pp. 271-292.
D’Erman, V. (2021) “Competing Logics of Integration: EU Trade Post-Brexit”, International Studies, 58 (2), pp. 219-233.
De Ville, F. and Siles-Brugge, G. (2019) “The Impact of Brexit on EU Trade Policy”, Politics and Governance, 7 (3), pp. 7-18.
Hadjimichalis, C. (2021) “An uncertain future for the post-Brexit, post-COVID-19 European Union”, European Urban and Regional Studies, 28 (1), pp. 8-13.
Moschieri, C. and Blake, D. (2019) “The organizational implications of Brexit”, Journal of Organisational Design, 8 (6), pp. 1-9.