Brexit is a real or perceived setback for the global trading regime?

1. WelcomeWelcome

2. Presented by: Gayatri JOSHI

3.  Introduction
 Methodology
 Findings and Discussion
 Economic Reasons
 Political Reasons
 Cultural Reasons
 Conclusion
 References

4.  Brexit finalised in the June 2016 referendum-was held
on Thursday 23 June, by majority (52%) vote in favour
of leave EU.
 The European Union is an economic and political
partnership involving 28 European countries. It has
since grown to become a "single market" allowing
goods and people to move around among member
countries.
 The timetable for withdrawal has not yet been firmly
established. It will take minimum two years to
withdraw membership from EU.

5.  In short term, UK may suffer recession, IMF also
forecast slow economic growth and decrease FDI for
next quarters of 2016.
 As a stronger economy among EU members, in long
run, Britain will develop new image and emerge as a
stronger economy of the world.
 But such kind of breakdown is not a first time event in
world history.
 Instead of setback it is an opportunity to develop better
effective strategies for global business.

6.  Studies revealed that major political issue behind
Brexit was sovereignty. Roff (2016) firmly mentioned
that Brexit vote was about Britain sovereignty, it was
not only about anti-migration.
 Palmer (2012) advocate that own common identity was
lost, replaced by a Babel of languages and conflicting
cultures due to multiculturalism.
 Increasing number of migrants and increasing
unemployment level was also one of the influencing
factor behind leave vote.

7.  The main objective was to develop a single market. But,
economic growth indicators clearly illustrated that there
is no existence of single market.
 To remain with EU the country has to pay high level of
hard currency and in rewards they need to share burden
of the member countries who are in stagnant or in
recession stage.
 Why Britain share any burden??
 Goodwin (2016) advocated that the FDI per present data
demonstrate that UK is the favourite place of investor
compare to other countries economy of EU.

8. Since Brexit is the current event, all relevant information
is revealed from recent news articles and magazines.
Current survey results and discussion on the topic is used
as database.
But the main causes responsible for Brexit like migration,
unemployment, multiculturalism are quite older and
supported by academic journals articles.
While to judge economic indicators, IMF and WTO data
base are used as a source.

9. According to the post referendum poll, based on a survey
of 12,369 voters in the UK; conducted by Lord Ashcroft on
the day of referendum, the major reason influenced people
to vote “leave” was their desire for sovereignty of the
United Kingdom.

10.  Roff (2016) firmly mentioned that the main factor (49 per
cent) propelling people that they want UK should
remain self-governing body. 33 per cent voters wanted
to leave EU to frame out new policies for immigration
and its own boarders.
 Least majority (6%) thought that in terms of economy
and trades, UK would get more benefits from being
outside from EU.
 Caspianreport (2016) presented sovereignty as the main
issue behind Brexit. Due to EU policies Britain citizens
suffer high flow of migrants which slow down economic
growth of the nation and Brexit is a good choice to
control own international policies.

11. No Existence of Single Market
Figure No. 1 : Nominal GDP in EU in the year 2015.
Source: IMF data base 2015

12. Brinded (2016) argued that there is a huge diversity in terms of
unemployment among member countries.
Figure No.2: Unemployment rate in EU countries during March 2016
Source:http://static.businessinsider.com/image/5760eee6dd08951c388b486e/image.jpg?

13. Figure No. 3: UK payment to EU budget from 1973 to 2015
Full fact team (2016) mentioned that House of commons library
argued that the amount paid by UK as a membership fees is not
the same as the benefits received from EU
Yes, it definitely rewards UK with free flow of migrants!!!

14. Figure No. 4: Relationship between Unemployment and Net
Migration
David & Charis (2009) argued that foreign workers create
fear of unemployment. Goodwin (2016) discussed that net
inflow of migration was 323,000 over the year 2015.

15.  Various studies find that immigration has small impact
on average wages but more significant impacts on the
wage distribution.
 It particularly affects the low-waged workers.
 Immigration have a negative impact on the employment
of UK-born workers during an economic downturn.
 On top of it, environmental policy and fisheries policy
framework create immense dissatisfaction towards EU
in various part of UK.
 UK residents want that any decision regarding Britain
should be framed within the boundary of the nation
only.

16.  Due to free flow of people from different countries, the
multiculturalism emerges in Britain.
 This multiculturalism perceived as violence of valuable
local culture and also perceived risk of terrorism
associated with free flow of people influence many
voters to vote leave EU.
 Old age group voter influence to leave EU as they
perceived multiculturalism as violence of valuable local
culture. Palmer (2012) stated that multiculturalism has
left Britain with a toxic legacy.

17. EU’s policies destroy freedom of UK to develop its own
national as well as international policies.
The relationship gives Britain financial, economic, political
and cultural burden. Finally, UK decided to withdraw its
membership from EU which created earthquake in
international financial markets.
But, in long term Brexit will not prove as setback to global
trade regime as it is perceived in present situation.
This is the time to develop long term position in market
and keep eyes on political environment to adopt and
develop changes in business strategies .

18. ThanksThanks

19. References
Ashcroft, L. (2016, June, 24). How the United Kingdom voted on Thursday… and why.
Retrieved from http://lordashcroftpolls.com/2016/06/how-the-united-kingdom-voted-and-why/
Brinded, L. (2016, June, 16). I am starting to think a Brexit is a good idea, and I never
thought I would ever say that. Retrieved from
http://www.businessinsider.com.au/eu-referendum-reasons-why-a-brexit-is-a-good-idea-2016-6?r=UK&IR=T
Caspianreport (2016, June 27). Consequences of Brexit. (Vedio File).
https://www.youtube.com/watch?v=xWUG-ILrjYs
Full fact team (2016, May, 27). The UK’s EU membership fee. Retrieved from
https://fullfact.org/europe/our-eu-membership-fee-55-million/
Goodwin, A. (2016, April). United Kingdom Economic Outlook. Vol. 40/2. Brexit and
Immigration (pp. 20-25). doi: 10.1111/1468-0319.12215. Retrieved from http://onlinelibrary.wiley.com/doi/10.1111/1468-0319.12215/pdf
International Monetary Fund (2014). World Economic Outlook. Retrieved from
https://www.imf.org/external/pubs/ft/weo/2015/01/pdf/text.pdf
Martin, B. (2016, April). United Kingdom Economic Outlook. Vol. 40/2. Brexit and FDI
(pp. 26-30). doi: 10.1111/1468-0319.12216. Retrieved from http://onlinelibrary.wiley.com/doi/10.1111/1468-0319.12216/pdf
Palmer, A. (2012, February). Multiculturalism has left Britain with a toxic legacy.
Retrieved from http://www.telegraph.co.uk/news/uknews/immigration/9075849/Multiculturalism-has-left-Britain-with-a-toxic-
legacy.html
Roff, P (2016, June, 30). Brexit was about Britain. Retrieved from
http://www.usnews.com/opinion/articles/2016-06-30/poll-shows-brexit-vote-was-about-british-sovereignty-not-anti-immigration
Schafer, D. (2012). The financial Transaction Tax-Boon or Bane?. ZBW-Leibniz
information centre of economics, Intereconomics pp 76-103.