The abandonment of the European Union (EU) by Britain

The abandonment of the European Union (EU) by Britain

Summary

The abandonment of the European Union (EU) by Britain in 2019 signaled an unexpected transition in international trade and business. According to Goodman (2019), the successful departure of the UK signals that the idea that global economic integration contributes to human progress has fallen to an era where national concerns take precedence over collective interests, with a majority of trade arrangements done on a bilateral basis (Goodman, 2019). Since the aftermath of the Second World War, international business has been guided by a multilateralism mindset where multilateral agreements between nations have fostered and strengthened exchanges among each other. Nonetheless, Britain is changing this approach to international business as it will have the freedom to secure bilateral trade deals with major economies such as the United States and China. As a result, Brexit is a noteworthy event because its success will set an example for other countries dissatisfied with the multilateralism approach to business to try alternative methods to international business.

Analysis

After reading the article, it is evident Britain’s move to abandon the EU will affect international business in three ways. First, it will ease trade tensions between the United States and China. The breakaway was lauded by both economies, which implies the exit will cool down their high-stakes trade war in the short run. Moreover, Brexit weakens also the capacity of the World Trade Organization (WTO), which is the primary arbiter in international business, as it is sidelined in bilateral agreements amongst nations. Finally, Brexit will also reduce the volume of international business between the EU and the rest of the world, as the number of commodities entering and leaving the EU market will decline, as Britain comprised a large share of exports and imports in the bloc (Goodman, 2019). As a result, Brexit will shape trade between Britain and the world and prompt a shift from multilateralism to bilateralism.

Reference

Goodman, P.S. (2019, December 17). Brexit’s Advance Opens a New Trade Era. Forbes.

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The Impact of Brexit on International Business

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