Published by El Nuevo Herald on July 03, 2016
Since the UK joined the European Union (EU) saw their exports increased dramatically. Although in the first three months of this year, EU imports exceeded exports to it and reached a deficit record of 23,800 million pounds, the British economy is one of the world's most powerful. It is even considered the world center for finance, because there is set daily interbank interest rate known as LIBOR, which is a global reference for all banks.
In addition, there are the largest reinsurance companies in the world, as Lloyds, which is used by companies like Citizens to guarantee its operations in case of massive claims for catastrophes such as hurricanes or tsunamis.
The withdrawal of the UK from the EU could be of poor prognosis in the first two years, and even a global meltdown could be generated in the economy.
It seems that low-tolerance policy towards immigrants was what justified the Brexit. That is, the anti-immigrant wave, strongly led by Donald Trump in the US and deftly spread around the world, eventually contaminated the UK.
The British prime minister David Cameron had promised to keep immigration in less than 100,000 a year. However, the last record was 362,000 immigrants last year. For that reason, Cameron renegotiated with the EU in order not to grant contractual benefits to immigrants for four years.
The hostility of many British to immigrants became even more evident after March 22 this year when a terrorist attack was committed in Brussels, Belgium, killing 35 people and 230 wounded. There it was referenced that due to EU treaties, authorized immigrants have free movement within the 28 countries that comprise it, and this certainly is a magnet for terrorist attacks.
Those who supported the withdrawal of Britain from the EU argues, like Trump, immigrants punish the taxpayer, living in social welfare, cluttering health services and education, challenging job opportunities to the natives while reducing their salaries.
What happens in fact is that the employment rate in the UK was 74.1% in 2015, the highest in its history since 1971, according to the NSO. At this rate, it is unlikely to harm an immigrant natives in search of employment.
However, it is important that immigrants in the UK, over 15, have a higher education,(level university) than natives in a ratio of 2-1.
Surely, this disastrous decision taken by the United Kingdom immediately generated massive losses at major US conglomerates. Companies like Ford, Wal-Mart, Caterpillar, etc., lost millions transfering to the United States its gains in Britain, due to the current weakness of sterling pound.
Still, not all are bad news for American consumers. The price of gasoline has fallen two to four cents per gallon since then. This is due to the lack of action on speculative trading in hedge funds on the London Stock Exchange, which, as we know, collapsed.
Hardly the UK may recover in the short term as the EU itself not want to accept their terms for fear that other countries can emulate, such as France. In turn the British, with their action, eventually cripple the fledgling Transatlantic Investment Agreement between the US and the EU (TTIP). Probably, they will try to join the Trans-Pacific Partnership (TPP).
As the former EU Commissioner Lord Mandelson said "treaties do not come free, not cover everything and take years to implement." In his view, the UK will have less and worse treaties which previously had.
The British thought that reducing immigration would enrich the country. not realized the effect it would achieve by the reverse, that is, impoverishing the country first, so that immigrants then leave.
Definitely the Trump's epidemic reached the UK.
BENJAMIN F. DeYURRE
Economist and Journalist
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