Brexit, a spin on the words “Britain” and “exit” is the shorthand for Britain’s split from the European Union. This process has been causing political unrest since the 2016 referendum. When first introduced, Britain was meant to exit the Union in March of this year. The newly extended deadline would see this happening in January 2020. However, with a divided UK government, the entire world is still guessing as to when, and if, Brexit will actually happen.
What does Brexit mean for the global economy?
When Brexit was announced back in 2016 warnings were raised about the implications on the UK economy. The UK Government were even preparing for potential food and medicine shortages, and lengthy queues at ports.
Since then, Brexit has not brought the kind of economic crash that many feared. Former Bank of England governor Mervyn King doesn’t think it will either. In October, he said, “I don’t honestly believe that Brexit has any great significance even for the rest of Europe, let alone the rest of the world. I don’t think the long-run economic consequences of the U.K. leaving the EU are particularly large.”
Looking at the wider picture, Mark Zandi, chief economist of Moody’s Analytics believes that the world is heading towards a global recession because of many factors, not just Brexit. These other factors include U.S. President Donald Trump’s tariff war with China, the global pandemic and the monetary stimulus packages of central banks worldwide. The International Monetary Fund seems to be supporting this outlook, making a downward revision to their global growth figures.
What does Brexit mean for Australia?
For the last two years, A British-Australian working group has been preparing for life after Brexit. There has been a discussion of a possible trade deal between the UK and Australia, and also between Europe and Australia.
Depending on the outcome, Australian’s may be restricted to trade or transact with Britain. Other speculations lean towards a better trade agreement, giving Australian services, manufacturing and agriculture sectors a boost.
Australian’s may also find it easier to work in Britain with visas allowing them to work more. Overall, there could be gains and losses. It all depends on the results of the upcoming UK general election on the 12th of December.
What does Brexit mean for Australian’s wanting to travel to the UK?
If the Brexit party wins, the UK’s immigration policy will be overhauled. On December 19th 2018, the UK released details of its future skills-based immigration system. This highlighted the government’s plans to introduce a new single immigration system, ending free movement between the UK and EU.
Australia are working closely with the UK to ensure any potential visa changes do not affect the strong economic links between Australia and the UK.
Will Australia have a new trade deal directly with the UK or the EU?
Currently, the UK has signed a mutual recognition agreement with Australia. Free Trade Agreement (FTA) negotiations have begun but are on hold while the UK deals with the Brexit turmoil.
As a bloc, Australia is seeking a far-reaching FTA with the EU to drive Australian exports, economic growth and job creation. Potentially, an FTA could open up a market for Australian goods and services that would benefit the people and GDP massively. It would provide Australian exporters with a competitive edge and give Australian businesses access to a larger export market in the EU.
So, what next?
Only time will tell. We have to wait and see how the Brexit story continues to unfold. Depending on what party is voted into parliament in the UK’s general election in December, there may not be a Brexit at all.
What are your thoughts on Brexit?