N Touch
Thursday 22 August 2019
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Editorial

Bracing for Brexit

BRITISH prime minister Theresa May survived a vote of no-confidence this week but the scale of the defeat of her plan to facilitate Britain’s exit from the European Union (EU) contains lessons for governments everywhere.

May’s deal was defeated by a spectacular margin of 432 votes to 202. Nearly 120 Conservative MPs voted against their own leader, handing her the largest parliamentary defeat by a British prime minister in modern times. The defeat of this plan, which was meant to cushion the UK’s withdrawal from the EU, has dramatically increased the risk of the UK crashing out with no special measures to soften the impact.

If she is to pass a new deal now, May will have to do what she has been unable to over the last two years: win the support of the opposition parties. She has already changed tack and has issued an invitation to them to work on a new deal. But with the clock ticking and the EU skeptical, it is not clear if she will succeed.

Against this nebulous backdrop, we welcome the assurance by Trade and Industry Minister Paula Gopee-Scoon that this country is preparing as well as it can to deal with the outcome of the Brexit process. We also endorse her call on Caricom to be prepared for either side of the result. We disagree with those who suggest Brexit if delivered, will not have any negative impact on our citizens.

Already the uncertainty over the process and its political management has thrown a pall over business in Europe. If the UK crashes out of the EU the effect on its economy will be serious. The Bank of England estimates the impact would be worse than the 2008 financial crisis. A UK government report said GDP could be as much as 10.7 per cent lower. Because the global economy is inter-linked, this could trigger a knock-on effect beyond the UK. With the IMF already warning another global slowdown is imminent, a poorly-managed Brexit could be bad news for everyone.

Furthermore, the UK is this country’s fourth largest trading partner in extra-regional terms. Over 12 per cent of our exported products to the EU market are attributed to trade with the UK. Additionally, this country has deep ties to the UK which could suffer as the country seeks to focus its attention on managing its affairs at home. Security and collaboration on criminal justice are among key areas of our cooperation.

Finally, members of the large TT diaspora resident in the UK could be caught up in the drama. Already, patients have begun to stockpile drugs given fears that a no-deal exit could dry up crucial concessions pharmacies need to supply certain items. Remittances and foreign direct investment, as well as tourism, could also be affected. We are right, therefore, to brace for Brexit.

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