Approximately 1600 years after the Roman Empire left Britain, mainland Europe and the United Kingdom (UK) are going through another divorce: Brexit. Brexit, a combination of Britain and exit, has been widely used to refer to Britain’s departure from the European Union (EU). It has been four long years since the fateful decision was made in a national referendum, confirming Britain’s decision to leave. Britain’s exit does not necessarily signify the end of the EU but this event will impact both sides on a large scale.

The EU was formed in 1992 with the idea that strength could be achieved through unity. The UK was always against further integration into Europe as they refused to adopt the union’s shared currency, the Euro, or become part of the Schengen Area, which essentially meant opening borders between member nations. After rejecting integration into Europe for decades, the UK has become the first member state to make a full exit from the EU, the long process of which finally concluded on December 24, 2020, a year after the official leave was declared on January 31, 2020.

The process of Brexit finally ended four years after the UK parliament's vote in 2016 to withdraw the country from the EU. A deal finalizing Brexit was signed, and it came into effect on 23.00 Greenwich Mean Time (GMT) on December 31, 2020. Brexit’s transition period during which the UK remained part of both the EU’s single market and customs union had officially ended.

Massive Economic Losses or Growth?

Before the completion of Brexit in December 2020, European and British goods were flowing back and forth without any restrictions or taxes in the respective states. Open borders were another benefit which led to migrants coming to work in Britain, providing cheap labor for some fields such as agriculture. Britain had all these benefits while it remained a member of the European community.

The deal, however, could be extremely detrimental to the UK economy amidst the current global recession sparked by the coronavirus disease (COVID-19). A possibility is that both the UK and the EU will now be regulating imported goods and taxing them, which will definitely reduce the number of goods flowing into the country. In addition, immigration issues will emerge, as many migrants such as the East European seasonal migrants who used to work in the UK agricultural industry will now make the costs of production higher.

People who are optimistic about Brexit argue that Brexit will be extremely beneficial to Britain’s overall economy, but this may not be the case. The UK had previously prospered under the EU mainly due to the Single European Market (SEM) as it loosened the domestic regulations between EU member states. Noteworthy reductions in transaction costs were seen from this but the new Free Trade Agreement (FTA) between the EU and Britain will not bring back similar conditions. Therefore, it is hard to be optimistic about the economic future of the UK as regulations will be tightened.

Projection for the UK and EU in 2021

Inevitably, a member nation leaving the EU poses a significant threat to unity between member states. More importantly, there is a high possibility that it will undermine the EU's global economic and political status. Professor Park Sunghoon (Graduate School and Division of International Studies), however, believes that this blow will not be as significant as one may believe it to be.

According to Professor Park, this blow may not be significant as the UK was traditionally a leading member of the EU which consistently challenged further integration of EU member states into the bloc. Challenges from the UK were seen through many instances such as their refusal to adopt the Euro and joining in 1973, far later compared to other members. Therefore, Brexit could, in fact, be extremely beneficial for the EU, as integration at the very least will be proceeding on far smoother levels.

Another problem that lies in the post-Brexit future is that the UK will face more issues as many interested parties including Scotland are voicing their opposition regarding this event, wishing to rejoin the EU. Potential issues such as the long-standing British-Spanish conflict over Gibraltar, the dispute over Northern Ireland, and fishing rights in the Channel and the North Sea are also resurfacing as the UK is now completely leaving the EU. Problems may further lead to deeper conflicts between the EU and the UK as the imperfection of Brexit is being pointed out by countries with intertwined interests.

Professor Park believes that there are two possible scenarios for the near future. The first scenario is the weakening of the EU’s economic and political weight due to the lack of British support in world affairs. The second is the improvement of the EU’s economic and political profile as member states will now be in a better position to make decisions in a more congruent direction.

A positive scenario is made possible under the assumption that further integration into the EU will become easier without the UK which has consistently challenged the EU’s efforts to unite Europe. Member states could even welcome that this barrier to unification is finally leaving the EU, but everything certainly depends on the EU’s future course of action henceforth. A more negative scenario is one which could impact member states with far-right political leadership such as Hungary and Italy, the countries that may feel that the EU has not done as much as it should have for their respective countries and could therefore choose to follow the UK’s example.

The UK made history by becoming the EU’s first member to secede from the union. Whether this will benefit the EU and Britain is still unclear, but the current state of affairs does not reflect positively for the UK. Projections about the UK’s future remain dim but as of right now anything can happen. As for the EU, whether this will lead to a reduction in its global influence or not will depend on its future courses of action.