Diplomacy in times of Brexit
“Being part of the EU is central to how we in the UK createjobs, expand trade and protect our interests around the world. It enables us todrive and shape a single market of some 500 million people, with a combined GDPof £11 trillion, in which British citizens can trade, travel and work freely.It is a key reason for Britain’s attractiveness as a global business hub andplace to invest.”
(FCO, 2012: Review of the Balance of Competences betweenthe UK and the EU, p. 9)
“The key benefits included: increased impact from acting inconcert with 27 other countries; greater influence with non-EU powers, derivedfrom our position as a leading EU country; the international weight of the EU’ssingle market, including its power to deliver commercially beneficial tradeagreements…”
(HM Government, 2013: Review of the Balance of Competencesbetween the UK and the EU – Foreign Policy, p. 7).
As of this writing, the odds by British bookmakers are 2/5for the UK staying in the EU and 15/8 for leaving. No topic, whether inseminars, cocktails parties or diplomatic dinners, is more popular than Brexit.Few, however, have a clear position on how it will affect their own country’srelations with the UK, especially if the diplomat in question represents anon-EU Member State.
In preparing for the referendum, HM’s Government reviewedthe balance of competences between the UK and the EU in key areas such astrade, justice, subsidiarity, competition policy or culture, in order toascertain how the UK was affected by “everything deriving from EU law”.
It was a government-led effort open to contributions fromexperts and special interests. Its conclusions leave no doubt as to why the UKbenefits from EU membership; how EU and non-EU members benefit from UK’smembership; and why the UK will never participate in the “ever-closer union”called for in the Preamble of the 1957 Treaty of Rome—as it is understood byboth opponents and supporters of Brexit to mean closer political relationsleading to a European Federation, with EU institutions concentrating furthersupranational powers.
So what if UK voters decided to leave the EU? What wouldhappen to the bananas, cacao, cigars, rum or sugar Caribbean countries likemine sell in the UK? How would it all affect, conversely, the booming exportsof British cars, chemicals, electronics, pharmaceuticals or whisky to the DR?
Trade relations between Caribbean countries like the DRwith the UK are governed by the Economic Partnership Agreement (EPA) signed inGeorgetown (Barbados) on 15 October 2008. Since then, 14 Members of CARICOMplus the DR have the right to export to any EU Member State without tariffbarriers or quotas.
Because of lengthy periods for tariff liberalisation, ithas taken a while for EU Member States to unleash their export potential. Butas of 2015, EU exports to the Caribbean were growing 28%, closing the year at€5.1 billion.
Because of a lengthy—and still ongoing—EU recession, theCaribbean has yet to recover the ground lost after exporting over €5.6 billionin 2008, the year the crisis started. By 2015, Caribbean exports to the EUclosed at €4.1 billion (Chart 1).
Facedwith such uncertainty, DR importers would take no time to find alternativesources for competing products in markets such as the US—with which, underDR-CAFTA, we have a free-trade agreement as well. The prices for such productsin the DR would be much lower because imports from the US would be subject tolower tariffs than the much higher tariffs negotiated by the DR in the WTO—applicableto UK exporters upon Brexit.
Thetragedy would be the impact for DR exporters. Having invested so much time andresources to meet strict UK quality and fairtrade standards, tens of thousandsof smallholder farms producing bananas and cacao in cooperatives would be leftwithout access to their most important European market.
Britishcharter and regular flights returning to the UK with their full cargoes offresh avocadoes, exotic vegetables and mangoes ripe and ready to sell inBristol, New Covent Garden or Spitalfields, would see their freight businessevaporate overnight, as trade barriers would return upon Brexit—and the ensuingUK withdrawal from our EPA.
Evensadder would be the void left by Brexit in the tables of EU institutions.Without the UK, the undisputed champion of free trade, small government andderegulation, the future of the EU would never be the same—for its Members, itsextra-regional partners and, most importantly, the very citizens on whose behalfits was conceived in the first place.
Ed. Note: SEE CHARTS ATTACHED