Negotiation Techniques in Economic Diplomacy

BREXIT Negotiations

The purpose of tis paper is to demonstrate why BREXIT is essentially a bad move and will leave the UK at a worse position in the long run.  In essence the main reasons given by BREXIT advocates such as Nigel Farage and Boris Johnson for the reason why the UK should disassociate from the EU are the huge payment to the EU, and the erosion of UK sovereignty. The leave group took both of these issues out of context and hence the justifications for leave are inherently flawed. The following is a SWOT analysis showing the situation in the UK following the win by the leave group and the botched ‘divorce’ between the UK and the EU.

How Leaving will Impact the UK: SWOT Analysis

Shrinking of the Economy

It is very likely that the BREXIT will lead to the contraction of the UK economy. The EU relies heavily on exports to the EU and hence leaving will jeopardize the economy. The weakening of the pound will also have a significant adverse impact on the economy.

Loss of Talent

The UK will also loose significant talent and skilled workforce as a result of the restriction of EU citizens’ movement. Cities like London rely heavily on expatriate finance experts while the healthcare system has employed thousands of EU nurses (Busch and  Matthes, 2016). The restriction of movement will lead to significant losses in these areas.

Tax Losses

Leaving the EU trade agreement will lead to significant losses in tax revenues. The UK relies heavily on trade with the EU and the loss n trade will lead to significant losses unless the government gets new deals immediately after leaving (Ebell & Warren, 2016).

Economic Losses

The London stock exchange and the pound are expected to continue losing value as a result of Brexit. The LSE lost over £130 billion in the short period after Brexit while the pound weakened.

Reduced Bargaining Power

The UK is currently attractive to international businesses because entering the UK allows access to the entire EU market (Ebell & Warren, 2016). Leaving will make the UK less attractive.

Argument

As demonstrated above, the UK is very likely to loose significantly following the decision to leave the EU. From the SWOT analysis conducted above, it is evident that the UK will loose more than it will gain from Brexit. The only major advantages of Brexit are cost savings, which will be offset by the losses in taxation and a worse off economic performance and increased autonomy. Regardless, the UK still has significant sovereignty and leaving will reduce its influence internationally, which means that the UK will be in a worse off position. To win the argument for the EU, I would make a persuasive argument that is based on the assessment of the opportunities and costs of Brexit.

In essence, it is in the interest of the UK to maintain ties with the EU to avoid the contraction of its economy, protect its main export market and source of most of its important and maintain its standing in the world. In addition, Brexit will complicate the UK’s foreign relations especially with Ireland and Spain. The UK and Ireland boarder is one of the most contentious negotiation issues and keeping the free movement of people and goods across the boarder will be instrumental for the people of Northern Ireland and the Ireland Republic. Allowing free movement of people and goods is a key tenet of the EU and hence remaining in good terms would be in the best interest of both parties. As shown in the SWOT analysis above, a hard Brexit would compromise all this and is hence not preferable.

 

 

References

Busch, B., & Matthes, J. (2016). Brexit-the economic impact: A meta-analysis (No. 10/2016). IW-Report.

Ebell, M., & Warren, J. (2016). The long-term economic impact of leaving the EU. National Institute Economic Review236(1), 121-138.

Hantrais, L., Stewart, K., & Cooper, K. (2019). Making sense of the social policy impacts of Brexit. Contemporary Social Science, 1-14.

 

 

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