Tag: protectionism

What Can We Expect to See After the Brexit?

On 23 June 2016, the United Kingdom held a referendum on whether the nation should leave the European Union. This historic vote resulted in an unexpected victory for the Leave side, giving the government a mandate to start negotiations to leave the EU. Immediately following this news, financial markets and the Pound Sterling plummeted causing financial chaos around the globe. This reaction demonstrates that the international community is fearful about the impacts of a Brexit. As a result, it is worth exploring the impacts that it is likely to have.

The campaign season leading up to Brexit referendum was arduous and marred by deliberate misinformation, xenophobia, and nativism. After this campaign, the referendum resulted in an unexpected victory for the Leave side, which won 52% of the vote. However, this referendum, which was not legally binding, does not automatically withdraw the UK from the European Union. In order to withdraw, the UK will need a majority vote in Parliament to repeal the web of legislation that allowed the UK to accede to the EU. In addition, the UK will need to invoke Article 50 of the Lisbon Treaty to formally withdraw from the EU. Once Article 50 is invoked the UK will have two years to negotiate the terms of its departure.

Protectionism Is Not the Answer

Since Donald Trump announced his candidacy for the presidency, he has ridden a wave of right-wing populism to become the Republican presidential nominee. Throughout this entire process, he has adopted a protectionist, anti-immigration, and nativist political platform. While Trump’s success in politics has shocked the American public, his rise is only part of a global trend towards protectionism as political parties like UKIP in the UK, the National Front in France, and AfD in Germany have steadily gained in the polls. All of these protectionist political parties claim that their policies will “make their country great again.” However, there is no economic basis to these claims and implementing these protectionist policies will cause severe damage to the global economy.

Since the end of World War II, the world has rapidly become more globalized and connected. However, since the 2008 Financial Crisis, the world has experienced a period of unprecedented economic stagnation, leaving hundreds of millions of people impoverished and facing a bleak future. Unfortunately, this has fostered political discontent and extremism throughout the world. Like previous times of economic hardship, this has encouraged the rise of nationalistic, right-wing political forces that have rejected globalization. The rise of the Brexit movement in the UK and Euroskeptic political parties reflect this trend.