An Examination of the Economic Repercussions of Brexit on the UK & EU

This report examines the economic consequences of Brexit, focusing on its impact on both the United Kingdom and other member nations of the European Union. It begins with a brief history of the EU, highlighting key milestones and objectives. The report then delves into the challenges faced by the UK as a member of the EU, including the cost of membership fees, immigration concerns, and restrictions on making its own laws. The core of the analysis centers on the multifaceted impacts of Brexit, such as the need to negotiate new trade relationships, the imposition of new EU import tariffs, and initial reductions in the UK's Gross Domestic Product. Both positive and negative effects are considered, including the newfound freedom for local businesses to operate under domestic laws and the challenges related to increased custom duties and access to technology. The report concludes by noting the mixed impacts on both the UK and the remaining EU member states, emphasizing the long-term economic adjustments required by all parties involved. Desklib provides access to this assignment along with a wealth of other solved assignments and study resources for students.

BUSINESS ISSUES IN THE
CONTEMPORARY WORLD

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Brief history of European Union.................................................................................................3
Challenges facing the UK as a member of European Union.......................................................4
Impact of Brexit on the UK and other member nations’ economy..............................................6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Brexit was situation when government of the United Kingdom taken decision to exit from
European Union (EU). Government of UK was taken this decision for purpose of doing free
trade without following different law, regulations and standards of EU. When this country exits
from union, then top-level management of EU was not happy with this decision. However,
nation completely exit from European Union in June, 2016 (GIACOMINI, 2017). This Brexit
decision of local government has affected country’s various internal and external factors in both
manners, positively and negatively. This report discusses key aspects of Brexit, like; brief history
of European union, influence of Brexit on the UK and other member nations’ economy,
challenges and difficulties facing country as a member of European union, etc. Trade services is
chosen category for describing these all factors of Brexit.
MAIN BODY
Brief history of European Union
Establishment
European Union (EU) is a global organisation comprising total 27 countries of Europe
continent. As of 1950, European Steel & Coal Community begins for uniting European nations
politically and economically in order to secure and protect lasting peace. In beginning of EU,
there was six countries of Europe come together for formulating this Union, and these all six
countries are; France, Belgium, Italy, Netherlands, Luxembourg and Germany (Kara, Karimov,
and Nguyen, 2020). In cold war time period, these all six countries were decided to help each
other for reducing their casualties in that war. This is the basic history of European Union.
Growth time period
Time period of 1960 to 1969 was the period of economic growth for this union.
Basically, this time period helped to all member countries of EU for highly growing their
economic conditions at international level. Between 1960 to 1969, all member countries of union
stop charging duties of custom while trading with each other. These member countries helped
each other in food production as well, and that’s why EU was gained surplus in the agriculture

production. On that time, administration of union was taken decision for selling its food products
at international level to gain huge foreign exchange.
Increase levels of community
Time period of 1970 to 1979 is growing community period of union, so that in year 1973,
the UK, Denmark and Ireland countries was also taken decision for joining EU. In 2015, there
was 28 countries part of union, but UK exit from this union in year 2016, so that currently this
union has 27 member countries of Europe (Campello and et.al., 2018). Before formulation of this
union, all first countries set different objectives behind formulating this union. For example; first
objective was to promote peace for well-being of citizens, second objective was to provide
freedom, justice and security without internal borders, third objective was to remove
discrimination and exclusion, fourth was to promote technological and scientific progress, fifth
was to improve social, economic, territorial cohesion and solidarity between member countries
of EU. Increase levels of human dignity is one major values of this union. Basically, formulation
of EU helps to citizens of it’s all member countries for gaining great growth opportunities. In
this situation, when any person has an effective growth opportunity, then it can simply increase
its living standard, and then its levels of dignity will be automatically improved.
Key factors behind establishment
Factor of freedom also was motivated to European union to enable people for freely
living their lives without any governmental and dictatorial pressure (Kierzenkowski and et.al.,
2016). This is value of union generally respect to freedom of thoughts, expression, information,
private life of different citizens. Rule of law is very productive value of union that helps to
people and organisations of member countries to run their different operations and practices in a
legal and ethical environment. Different member nations have always required adhere all legal
and ethical considerations which develops by top-level management of European Union. These
all factors were influenced to all six member countries for formulating this union. With support
of this union’s decisions, citizens of all six nations lived their lives in very appropriate manner.
Challenges facing the UK as a member of European Union
The United Kingdom faced lots of challenges and difficulties while conducting trade
services when it was member of European Union. These various challenges were highly

impacted to local government for taking decision towards leaving European Union. Some main
challenges and difficulties facing the UK as member have been discussed below;
Cost of EU membership fees: The cost of becoming a member of EU was very higher, so this is
first major challenge.
Immigration: This country was influenced to pay huge fund as cost of immigration also while
joining this union.
Britain's ability for making its own laws: When the country joined EU, then it was impacted to
follow laws and regulations of European Union as well.
Threat to the Union: Many threats also faced by country when it was a member of union. For
example; other nations internal politics against the UK.
This is of the major challenges facing by country when it was a member of this union
(Mayhew, 2017). Basically, the management at this union formulates very strict laws, rules and
regulations for trade services, in which each member nation is responsible to follow these laws.
But at one moment, government of the United Kingdom has realised that, these all rules and
regulations of trade developed by EU are negatively affects to its economic growth international
level. Basically, these rules and regulations was become challenges to the UK’s economic
growth, and that’s why local government of this country was taken decision towards leaving
union in year 2016.
In 1973, the United Kingdom was joined this union for growing its economic condition,
and it was succeeded in achieving huge growth by economically, socially and demographically
till 2000. But after 27 years as a member of union, its growth rate become something slower.
Then, the UK’s economic conditions was badly affected by recession of 2007 and 2010. Many
people lost their jobs due to recession, and many small and large-sized businesses stopped
generating employment opportunities. Due to these all factors government of this country was
realised that, now be a member of EU is not favourable to itself, because this union enables to
provide only limited growth opportunities. Basically, limited growth opportunities are very
challenging for a country in this dynamic world. Then government realised that, if the UK will
make effective trade relations with other countries of different continents, then it can simply
develop its economic conditions (Ibáñez Díaz, 2016). That’s why after lots of meetings and

discussions with finance experts, economy experts and administrative officers, government of
the United Kingdom was taken decision of leaving European Union.
Impact of Brexit on the UK and other member nations’ economy
Brexit decision of the United Kingdom impacts itself as well as other member nations’
economy as well in year. This decision basically affects this country’s trade services in both
ways positively and negatively.
Article 50
When the UK was taken the decision of Brexit, then EU’s parament and UK’s parliament
organisational a meeting to negotiation of dividing their assets in proper manner.
Having to negotiate new trade relationship
This country was influenced to make new trade relationship with different new countries
for making its economy in better condition after leaving EU.
New EU import tariffs and possibility of facing non-import tariffs
When the UK was taken the decision of leaving EU, the union’s upper management has
decided to increase import tariff charges on this country when it will import and export any
service or product in any EU’s member country.
Reduction in Gross Domestic Product
In 2016 UK was taken decision of Brexit, so that after leavening union, the country’s
GDP was reduced for the next 1 to 2 years. But now it has well-improved GDP.
Reduction in the size of trade market
Due to Brexit, this country was not able to maintain effectiveness within its international
trade for one to two years, because existing member countries of EU was breached all trade
contracts with UK.
Inflection
The country faced inflation also because of rising prices of food items and other essential
goods which was imported from European Union, and this was also a big impact on the UK’s
economy
These all factors were affected to other member country’s economic system as well.

After Brexit, local businesses of country get enabled to follow only such laws which has
developed their local government and legislative assembly. Now, no company of the UK has
required to adhere laws and legislation which was formulated by European Union. With support
of this impact, local businesses are freely conducting their practices in across the United
Kingdom and also in many other countries. Before Brexit, different ventures here was not able
gain huge growth opportunities due to EU’s strict obligations (O'Meara, 2020). Currently local
ventures of country enable conduct their trade practices with any country, so that this factor
provides huge foreign exchange to the UK, and its economy is automatically improving.
Currently this country is no need to take permission through this union while exporting its
various goods and services in different chosen countries.
EU is not able to interfere while importing goods from other nations as well. With
support of this impact, government of the United Kingdom has enabled to make effective
relations with many other nations, like; United States, Japan, South Korea, Canada etc.
Nowadays, many large-sized ventures of UK called; Tesco, Jaguar, Marks and Spencer, Iceland
foods freely conducting trade practices with various Asian, American and African countries.
These ventures no need to fulfil obligations of European Union while providing trade services at
international level. MNCs of the United Kingdom plays an excellent role to its government for
achieving huge foreign exchange (Hrebenciuc, 2017). This foreign exchange contributes in
improving GDP (Gross Domestic Product) of country, so that its economic conditions are
increasing day to day in international market.
Decision of Brexit has affected to the UK and other member nations in negative way as
well. For example; when UK government exit from the union, then other member nations of EU
has decided charge very higher custom duties when this country will export any trade service
(Bulmer and Quaglia, 2018). This is one of major negative impact of Brexit on the country’
economic growth. However, UK government also not gives relaxation to member countries when
they export their trade services in this country, because this also charges very higher custom
duties. That’s why this is negative impact for economic growth of member countries as well. On
the other side, before Brexit, the UK was enabled to purchase very hi-fi technologies through
different member nations of this union on very lower prices. But when this country exits from
union, then administration of EU was informed to all existing nations for providing technologies
to the United Kingdom on very higher rates.

According to EU’s guidelines, a member has to provide various technologies on very
favourable rates to another member country for growing together at global level. However, this is
negative impact on the UK’s economy that, this country is not able to purchase different
productive technologies to EU members on cheap rates, because now this country is not a
member of this union (Korus and Celebi, 2019). On the other side, member countries of union
also not able to gain talented and skilled people of the United Kingdom as employees in their
local businesses, so that this is a negative impact of Brexit to these member countries. Due to
lack of skilled and talented employees, no business can produce any innovative and exclusive
product or service, and that’s why these businesses can’t achieve excellent foreign exchange. At
the end, economic conditions of these member countries also will be negatively affected by these
all aspects of Brexit.
CONCLUSION
On the basis of above findings, it can be concluded that Brexit decision of UK
government has very positively affected its economic conditions. Basically, now this country is
able to take decision on self-basis, and existing ventures and organisations also has enabled to
adhere only such laws, regulations and standards which has developed local government of the
United Kingdom. It can be also concluded that, now this country no need to follow policies and
regulations of European Union while exporting and importing trade services at international
level. Brexit has enabled to country for conducting favourable trade practices at global level.

REFERENCES
Books & Journals
Bulmer, S. and Quaglia, L., 2018. The politics and economics of Brexit.
Campello, M., and et.al., 2018. Exporting uncertainty: The impact of Brexit on corporate
America. Available at SSRN 3078220.
GIACOMINI, M., 2017. Italy-UK economic relations and the possible impact of Brexit.
Hrebenciuc, A., 2017. The costs of Brexit for UK economy. Theoretical and Applied
Economics. 24(2). pp.319-327.
Ibáñez Díaz, M., 2016. The impact of Brexit on the UK financial service.
Kara, A., Karimov, N. and Nguyen, A. P., 2020. Brexit referendum and the UK securitization
market. Applied Economics Letters. pp.1-6.
Kierzenkowski, R., and et.al., 2016. The economic consequences of Brexit: a taxing decision.
Korus, A. and Celebi, K., 2019. The impact of Brexit news on British pound exchange
rates. International Economics and Economic Policy. 16(1). pp.161-192.
Mayhew, K., 2017. UK higher education and Brexit. Oxford Review of Economic
Policy. 33(suppl_1). pp.S155-S161.
O'Meara, N., 2020. Extradition through the Lens of Brexit: The UK, Ireland and Future
Prospects. Irish Journal of European Law. 22(1). pp.47-65.