Monday, December 6, 2021

Final Call For The Brexit Deal: What’s Next?

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With the rejection of Theresa May’s Brexit deal by the UK Parliament three times in the past, the British LEADER faces her last and final challenge regarding her withdrawal deal, which if rejected would lead to disastrous results, both for the deal itself and also for the current government. This was announced by the Secretary of State for Exiting the European Union Stephen Barclay. He said that, should there be a defeat, the deal would be ‘dead’. Theresa May, who is now in a very fragile position is set to bring the deal back to the House of Commons soon, to seek the approval of Parliament. The primary concern for those who oppose the deal, however, is whether there have been any new changes which have been introduced in it during these six weeks of negotiations.

While ‘Eurosceptics’ within her own Conservative Party says that the deal leaves the UK within the Customs Union, the Democratic Unionist Party (DUP) has stood by its statement that the deal can see success of the day only if there are changes made to protect the economic and constitutional integrity of the UK and avoid a hard border between Northern Ireland and Great Britain. The Labour Party opposes the deal over issues of workers’ rights and those of EU nationals living in Britain and British nationals living within the EU. It has demanded for a second referendum on EU membership. There are chances that Labour may yet abstain in the fourth vote, allowing Mrs. May’s deal to pass the first stage of parliamentary approval. The Green Party, the Liberal Democrats, the Scottish National Party and Plaid Cymru, all oppose Brexit entirely.

For the Conservative Party, challenges would be quite tough in the coming days. Positions have become rigid in Parliament and the choice between ‘no deal’ or ‘no Brexit’ has emerged. Apart from the Brexit mayhem, it has suffered major losses in local elections held this month, losing 1334 councillors, while the strongly pro-EU liberal democrats gained 703 seats. In the EU parliamentary polls as well, the vote for which is scheduled to be held on 23 May, 2019, the latest polling average reports that Nigel Farage’s Brexit party is ahead of the two major parties, on 30 per cent compared to Labour’s 21 per cent and the Tories’ 12 per cent.

On the matter of resignation, Prime Minister May has always evaded the issue after every defeat of the deal. She has said that even if the deal gets defeated for a fourth time, she expects the MP’s to remember to respect the results of the referendum. If Mrs. May manages to negotiate a way out of this impasse, it will definitely be a credit to her and her government. If things turn otherwise, then Britain might have to face quite a few hurdles before actual economic and constitutional integrity can be set up. In any case, the United Kingdom is scheduled to leave, with or without a deal for smooth the exit, by October 31 this year after the remaining 27 EU members offered Britain six more months to ratify or rethink the withdrawal deal.

For India, there are significant differences of opinion on how a ‘deal’ or ‘no deal’ would affect India’s trade and investment with the UK. A Reserve Bank of India report in February 2019 had noted that the “the likelihood of Brexit in March 2019 could offer opportunities for Indian exporters if bilateral trade agreements are renegotiated”. On the other hand, Brexit has also been identified as an issue which has repercussions for India’s external sector owing to the strong investment relationship. A ‘no deal’ situation is most likely to hit the British Pound first and subsequently emerging markets. The adverse impact of a strained UK financial market and its catastrophic implications, if any, would definitely take some time to recover before it bounces back.

Script: Dr. Sanghamitra Sarma, Strategic Analyst On European Affairs

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