As Great Britain plans on exiting European Union on January 31st 2020, it hopes to improve trade relations with United States. In order to achieve this goal, Great Britain will have to comply with United States standard of trading which includes no digital tax on American companies operating in United Kingdom, abort its plan on letting Chinese company Huawei plant 5G cellular networks in U.K. and finally put maximum pressure on Iran so that it proves its loyalty to Washington. These trade terms aren't favorable and so Chancellor Sajid Javid hopes to improve trade with European Union bloc according to his recent talk at World Economic forum.However, EU is giving a tough time to U.K as European commission is planning to block U.K. from securing same rights as other European countries for, they fear that U.K will gain competitive advantage over European bloc and eventually move away from trading with her European counterparts. With the current scenario laid out, it is fascinating to see IMF being optimistic of Brexit Britain performing well above than France and Germany. Do you think IMF prediction of Brexit Britain would turn out true with all constraints imposed by Washington and Brussels? https://www.ft.com/content/6a9800c2-3d16-11ea-b232-000f4477fbca
4 comments:
I would be surprised if the IMF prediction regarding Brexit turned out to be true. If this phenomenon were happening in a vacuum, then perhaps it would be more likely that Britain would come out with the "long straw" as it were. However, given the circumstances surrounding Brexit, I imagine that the British economy will ultimately suffer. The contentiousness surrounding the Brexit debate has prevented a favorable deal from being drawn between Britain and the European Union, and the international relations implications alone are sure to have shock waves. Belfast, NI is currently a large tourist destination and largely a service economy. If sectarian violence breaks out in Belfast (which is likely with the potential reintroduction of a hard border between NI and the Republic of Ireland) that tourism will likely grind to a halt, crippling Belfast (and much of the rest of Northern Ireland)'s economy.
I do not think that the IMF prediction about Brexit Britain performing well above France and Germany will come to be true. With the new plans beginning in 2020 since the UK election in December, I believe what will actually happen is the UK will have a few months of increased growth in the economy, followed by a down turn again. They have had slow economic growth recently and I think, with all the implications of them leaving the EU, the projects that have been delayed will begin to be pushed forward, but the uncertainties of Brexit will cause future issues in their economy regarding a downturn of the speed of their economic growth. We will have to wait and see how it plays out in the long-run.
I believe that a great example of what a post-Brexit UK will look like is Swizterland. While Switzerland is not an EU member state, is has never been one, yet has enjoyed being a very prosperous economy, while maintaining great trade relations with its neighbors. It should also be considered that Switzerland is not nearly as large as the UK is, in terms of production and trade possibilities. Therefore, I have great faith in the UK economy to remain stable after Brexit is said and done.
I think that even though the UK economy seems to be doing well in the short run, they will definitely face strife in the future. Especially regarding the creation of new trade deals with other countries and the EU. I'm expecting to see Germany give the UK a hard time especially due to past relations. If the IMF prediction turns out to be true I think it would have to come true in 5 years or more once their new mechanisms are developed and have been working for a while, but truthfully anything could happen.
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