An assignment on,

Brexit: Background, Procedure, Prospects, and Risks

Course no. 224: Diplomacy and Foreign Policy

Submitted to:

F. M. Tunvir Shahriar

Department of Peace and Conflict Studies,

University of Dhaka

Submitted By:

Rifat Islam Rupok

Department of Peace and Conflict Studies,

University of Dhaka
9th Batch BSS ( Semester System)

Class Roll Number : 34

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 Table of Content

Background 4

Procedure 7

Prospects and Risks 9

Brexit and Bangladesh 10

The Future 11

References 13

Appendix 14

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Abstract: In recent years the term “Brexit” has gained enormous popularity. The

incident the term represents not only has great impact on UK, but also on every part

of the globe. This paper attempts to analyze the back ground, prospect, risks and

gains involved with Brexit from UK, and global perspective.

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Background

What does Brexit mean?

It is a word that has become used as a shorthand way of saying the UK leaving the

EU - merging the words Britain and exit to get Brexit, in a same way as a possible

Greek exit from the euro was dubbed Grexit in the past.1

UK as separated from the mainland Europe has always seen itself as an independent

entity not sharing the common European dream of a unified Europe. It has always

distanced itself from the mainland European states. UK was not part of the Rome

treaty that created the EEC in 1957, The predecessor of EU. UK made a third

application for membership, which was successful. Under the Conservative Prime

Minister Edward Heath, the European Communities Act 1972 was enacted.

On 1 January 1973 the United Kingdom joined the EEC.2

1
(BBC News, 2016)
2
(BBC News, 2016)

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In 1975 UK held a referendum to determine whether to remain in the EEC or not.

The referendum decided that UK should remain in the EEC with 67% voting in favor

of remaining.

In 1993 when the EEC became EU, the organization changed from an economic

union to a political union. Various groups contested the UK’s decision to remain in

the EU and formed the “Referendum Party” which promised to arrange a referendum

if elected.

In the 1997 elections the party was unable to win a single seat and as result it was

widely believed that there was an overwhelming support to the UK remaining in the

EU.

In 2012, Prime Minister David Cameron rejected calls for a referendum on the UK's

EU membership, but suggested the possibility of a future referendum to gauge public

support. According to the BBC, "The prime minister acknowledged the need to

ensure the UK's position within the European Union had 'the full-hearted support of

the British people' but they needed to show 'tactical and strategic patience'."

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Under pressure from many of his MPs and from the rise of UKIP, in January 2013,

Cameron announced that a Conservative government would hold an in–out

referendum on EU membership before the end of 2017, on a renegotiated package,

if elected in 2015.

The Conservative Party unexpectedly won the 2015 general election with a majority.

Soon afterwards the European Union Referendum Act 2015 was introduced into

Parliament to enable the referendum. Despite being in favor of remaining in a

reformed European Union himself, Cameron announced that Conservative Ministers

and MPs were free to campaign in favor of remaining in the EU or leaving it,

according to their conscience. This decision came after mounting pressure for a free

vote for ministers. In an exception to the usual rule of cabinet collective

responsibility, Cameron allowed cabinet ministers to campaign publicly for EU

withdrawal.

In a speech to the House of Commons on 22 February 2016. Cameron announced a

referendum date of 23 June 2016 and set out the legal framework for withdrawal

from the European Union in circumstances where there was a referendum majority

vote to leave, citing Article 50 of the Lisbon Treaty. Cameron spoke of an intention

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to trigger the Article 50 process immediately following a leave vote and of the "two-

year time period to negotiate the arrangements for exit.3

Procedure

After the departure of David Cameron as the prime minister of UK , Theresa May

took his position and set out a detailed roadmap of the UK’s exit from the EU in

2016. According to that , The result of the referendum on the UK’s membership of

the European Union will be considered final by the government . The Prime Minister

made clear to the House of Commons that “if the British people vote to leave, there

is only one way to bring that about, namely to trigger Article 50 of the Treaties and

begin the process of exit, and the British people would rightly expect that to start

straight away”. The rules for exit are set out in Article 50 of the Treaty on European

Union. This is the only lawful route available to withdraw from the EU .But the

process is unprecedented. No country has ever used Article 50 – it is

untested. There is a great deal of uncertainty about how it would work. It would be

a complex negotiation requiring the involvement of all 27 remaining EU Member

States and the European Commission. Before negotiations could even begin, the

European Commission would need to seek a mandate from the European Council

(without the UK present). The withdrawal agreement would also require the consent

3
(BBC News, 2016) (Brexit, Briefly, 2016) (UK Government, 2016)

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of the European Parliament. The UK’s withdrawal from the EU would mean

unravelling all the rights and obligations from access to the Single Market, to

structural funds for poorer regions, to joint action on sanctions – that the UK has

acquired both during our accession to the EU and over our 40-year membership. As

well as negotiating its withdrawal, the UK would also want to negotiate its post-exit

arrangements with the EU. The complexity of the negotiations, and the need for the

UK to negotiate adequate access to the Single Market after it leaves the EU, would

make it difficult to complete a successful negotiation before the two-year deadline

expired. Any extension to the two-year period set out in the Treaty would require

the agreement of all 27 remaining EU Member States. If the UK was to reach the

end of the two year period specified by Article 50 without having reached an

agreement, and if any of the 27 other Member States vetoed an extension of this

period, this would lead to the UK leaving the EU with no immediate replacement

agreed, without any protection under EU law for the rights of UK business to trade

. The process for withdrawing from the European Union

preferential basis with Europe or the EU’s free trade agreement partners, UK citizens

to live and work in Europe, or UK travellers to move about freely in Europe.

Regular EU decision-making would continue while UK negotiated to leave. UK

would have be constrained in its ability to negotiate and conclude new trade

agreements with countries outside the EU. The countries with which

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we currently have preferential trade agreements through the EU are likely to want to

see the terms of our future relationship with the EU before negotiating any new trade

agreements with the UK. In addition, many of UK’strading partners, including the

United States, are already negotiating with the EU. Before they start negotiations

with the UK they are likely to want those deals to conclude.

It is therefore probable that it would take an extended period to negotiate first

UK’s exit from the EU, secondly UK’s future arrangements with the EU, and thirdly

our trade deals with countries outside of the EU, on any terms that would be

acceptable to the UK. In short, a vote to leave the EU would be the start, not the end,

of a process. It could lead to up to a decade or more of uncertainty.4

Prospects and Risks

UK believes it sends too much money to the UK and gets nothing in return. 5 300

Million Pounds per week with no return. It believes that this cash if it remains in the

UK could be helped to improve the country. It also thinks that EU regulations make

it harder for the small businesses to operate and takes business away from UK to

other EU states. And UK also feels leaving EU will help them crack down on illegal

immigrants entering the country.6

4
(UK Government, 2016)
5
(BBC News, 2016)
6
(Brexit, Briefly, 2016)

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Although these are genuine arguments ( Though they have many fatal flaws ) but the

risk of exiting the EU are also high.

UK could split , As Scotland has already made such intensions as it wants to remain

in the EU as it gets much benefits from it. In the referendum of 2016 Scots voted to

remain overwhelmingly. Brexit could trigger another Scottish referendum for

independence and this time it could succeed.7

London Metro area could demand the same, as because of EU regulations and free

trade, it has become the capital of international business. The general populace there

has also voted overwhelmingly to remain. So because of the nature of the United

Kingdom, they could demand to become independent.

UK receives 16% academic funding from EU. After Brexit the tuition fees will rise

and there might be a negative impact on the whole education system.

There is a high chance that UK won’t be able to negotiate trade and other with all

the countries. So it might face problems trading or having interactions with other

states. The IMF and WTO predicts, it could plunge UK in a recession.8

Risks for Bangladesh

Currently, UK is Bangladesh's third largest importer of RMG after the US and

Germany. The lower value of pound will make Bangladeshi garments more

7
(Oliver, 2013) (BBC News, 2016)
8
(The Guardian, 2016) (UK Government, 2016)

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expensive to British buyers, but this “price effect” is expected to be minuscule and

short-lived. Bangladesh now enjoys a duty-free-quota-free status (DFQF) with the

UK, and unless something changes, we should be able to keep that DFQF status, at

least in the short run. On the other hand, our imports from the UK will be cheaper

and it might be a good time to buy British equipment and other capital goods.

It may be worth mentioning here that some in the anti-Brexit camp have been

predicting dire consequences of Brexit for developing countries. Overseas

Development Institute (ODI), for example, has estimated Bangladesh will

experience a significant drop in exports due to its dependence on the UK and EU for

50 percent of its export destination. To quote its July 7 report, “Bangladesh and

Cambodia in textiles and garments, and Kenya in flowers, will be among the

countries most directly affected. In the case of Bangladesh, 90 percent of

Bangladeshi exports to the UK are in textiles and garments, with the UK representing

10 percent of Bangladeshi exports. Assuming a unit elasticity of demand, total

Bangladeshi exports are expected to fall by 0.9 percent as a result of the weaker

pound. This does not even include the negative effect in the UK demand associated

with the fall in income and a decrease in consumer confidence.” Needless to point

out, the pound has bounced back and Bangladesh is maintaining its competitive

position in the UK market.

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In so far as trade is concerned, in case the UK is allowed to remain in the “single

market”, a privilege it now enjoys, British businesses will still have access to 500

million consumers across the EU. The impact on Bangladesh will then be minimal.9

The Future

Considering the risks involved, it might happen that Britain does what has been

described as a “Soft Brexit” where they only come out of some EU agreements. The

referendum held in 2016 has no legal effect. The government can choose to follow

or ignore it. Brexit has huge loses involved with fewer gains, so there is a high

chance this matter will be left hanging for years to come. Though the UK

government has published a roadmap, Theresa May doesn’t seem to be in a rush to

Do a “Brexit”. 10

9
(Shibli, 2016)
10
(Brexit, Briefly, 2016)

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References
BBC News, 2016. Brexit. [Online]
Available at: http://www.bbc.com/news/uk-politics-32810887
[Accessed 03 10 2016].

Brexit, Briefly. 2016. [Film] s.l.: s.n.

Oliver, T. L., 2013. Europe without Britain, Berlin: SWP .

Shibli, D. A., 2016. “Brexit” and Bangladesh. [Online]

Available at: http://www.thedailystar.net/op-ed/politics/%E2%80%9Cbrexit%E2%80%9D-and-
bangladesh-1264264
[Accessed 26 september 2016].

The Guardian, 2016. Brexit. [Online]

Available at: https://www.theguardian.com/politics/eu-referendum
[Accessed 09 October 2016].

UK Government, 2016. The process for withdrawing from the European Union. [Online]
Available at:
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/504216/The_process_
for_withdrawing_from_the_EU_print_ready.pdf
[Accessed 05 October 2016].

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 Appendix

Acronyms

CFSP Commons Foreign and Security Policy

EEA European Economic Area

EFTA European Free Trade Association

ESDP European Security and Defence Policy

G6 Groups of 6 EU member states

MEP Member of the European Parliament

MP Member of Parliament (British House of Commons)

NATO North Atlantic Treaty Organization

OSCE Organization for Security and Cooperation in Europe

QMV Qualified Majority Vote

TEU Treaty on European Union

WTO World Trade Organization

Article 50 Treaty on European Union

1. Any Member State may decide to withdraw from

the Union in accordance with its own constitutional

requirements.

2. A Member State which decides to withdraw shall

notify the European Council of its intention. In the

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light of the guidelines provided by the European

Council, the Union shall negotiate and conclude an

agreement with that State, setting out the arrangements

for its withdrawal, taking account of the framework

for its future relationship with the Union. That

agreement shall be negotiated in accordance with

Article 218(3) of the Treaty on the Functioning of the

European Union. It shall be concluded on behalf of the

Union by the Council, acting by a qualified majority,

after obtaining the consent of the European Parliament.

3. The Treaties shall cease to apply to the State in

question from the date of entry into force of the withdrawal

agreement or, failing that, two years after

the notification referred to in paragraph 2, unless the

European Council, in agreement with the Member

State concerned, unanimously decides to extend this

period.

4. For the purposes of paragraphs 2 and 3, the member

of the European Council or of the Council representing

the withdrawing Member State shall not participate

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in the discussions of the European Council or

Council or in decisions concerning it.

A qualified majority shall be defined in accordance

with Article 238(3)(b) of the Treaty on the Functioning

of the European Union.

5. If a State which has withdrawn from the Union

asks to rejoin, its request shall be subject to the procedure

referred to in Article 49.

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