Brexit” is a word that was coined to describe the United Kingdom’s June 23, 2016 vote to quit being a member of the 27-member European Union. It is also a subject that is difficult to write about because its situation can change on an almost daily basis. 

Since the U.K.’s vote to leave, Brexit and politics in the U.K. have played out like a cliffhanger soap opera. One day after the fateful vote to secede, British Prime Minister David Cameron resigned his position.

Many believe that when he put the Brexit vote up for a public referendum in response to members of Parliament and public supporting the movement, Cameron thought it would not pass. Many people blame him for opening a can of worms.

Cameron was succeeded by Theresa May, who inherited the Brexit hot potato and struggled to forge a clear path of exit with the EU. Second-guessing and controversy surrounding Brexit shadowed her tenure as prime minister until she announced her resignation on May 24, 2018. 

May was replaced on July 24, 2019 by Boris Johnson, who promised to successfully shepherd the U.K. through its extraction from the EU. He began negotiating a withdrawal plan with the EU, but immediately experienced problems building support for a path forward. 

In reaction, Johnson did everything from suspending Parliament, a move that was legally rebuked, to expelling members of his party who were not behind him. 

Finally, he was put in the awkward position of asking the EU for more time to withdraw. Because he didn’t have the votes in Parliament he needed to pass the Brexit deal, he had no choice but to call for a general election, the third of its kind in the U.K. during the past three years. 

Johnson’s hand was strengthened by his party’s overwhelming victory in the general election, and the path to Brexit was made possible for Johnson and his party. 

As part of the negotiations, the U.K. and EU agreed to keep all rules, processes and regulations the same during a transition period that will last until December 31, 2020. 

Now the U.K. has a little more than 10 months to negotiate a new economic and trading relationship with the EU. By any standard, this appears to be a herculean task. 

The Johnson government must come to terms with the EU on everything from customs procedures, security and e-commerce rules to logistics standards, fishing rules and financial regulations. Compared to what the U.K. and EU need to negotiate and put in place, the renegotiation of the North American Free Trade Agreement looks like a piece of cake.

Johnson has also publicly stated that his government intends to negotiate separate trade agreements with individual European countries once it has completely broken away from the EU. 

He intends to rely heavily on the negotiation of a trade agreement with the U.S. in order to decrease his country’s strong reliance on the EU. More than 50% of the U.K.’s imports come from the EU, while almost 50% of its exports are purchased by the EU.

However, by rejecting its EU membership and turning to the U.S. to balance its economic future, the U.K. might be backing itself into a position of weak leverage with the U.S. in future trade negotiations. U.S. negotiators might choose to play hardball with the U.K. and exact severe concessions.

The U.K. might find itself with completely different trade protocols between the U.S. and the EU, creating confusion, chaos and potentially loss of business for its companies. 

From a geopolitical standpoint, the U.K.’s exit from the EU is also incredibly complicated. This move could fan the flames for a renewed Scottish independence movement, as many Scots were perfectly content to be part of the EU and are wary of the uncertain future of an independent U.K. 

From a security standpoint, Johnson’s government negotiated for Northern Ireland to continue the current trade rules it has with the EU. This would prevent the bizarre situation of having customs checkpoints between this region and the Republic of Ireland, which will continue to be an EU member. 

However, a system must be established for products that the U.K. sends to Northern Ireland that will eventually be exported to the EU. How this will function is yet to be determined. 

Given what it is facing the remainder of the year, I can’t help but wonder if a successful Johnson Brexit will become a Pyrrhic victory for the U.K. Johnson will need to use every political skill to keep his party behind him as the path is laid out for going solo. 

I imagine that he and his team are going to be busy for the next 10 months. 


Jerry Pacheco is executive director of the International Business Accelerator, a trade counseling and training program of the New Mexico Small Business Development Centers Network.

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