Britain's departure from the EU is officially happening, with Britain's EU ambassador formally triggering the two-year exit process by handing a letter to EU Council President Donald Tusk.
A senior academic from UNSW Business School can put ‘Brexit’ into context, and explain the economic relevance for the world.
Professor Fariborz Moshirian, Director of the Institute of Global Finance at UNSW Sydney said that triggering Article 50 of the Lisbon Treaty, will result in tough negotiations. “One can only anticipate a vast difference between the UK and the EU when it comes to some fundamental issues such as trade and investment. It is clear May wishes to have complete separation from the EU when it comes to immigration, some legal matters and the common market.
The UK economy could be hit hard, depending on the outcome of negotiations over the next two years says Professor Fariborz Moshirian. “We know that the OCED and the US Treasury predicted around a 5 per cent decline in the GDP of the UK over the next 15 years. However, we need to be cautious as there are many unknown factors ahead of us, facing both global and regional economies. We are also aware that the negative impact on the UK economy could possibly be partly offset by a weaker British pound, making UK businesses more competitive.”
He adds that a very important issue in the Brexit negotiations will be trade in goods and services, and whether the UK will still have full access to EU markets. “This is going to be tough, particularly, when Mrs May is now including trade in financial services as part of these negotiations,” he adds.
Another issue is whether the UK should pay the EU to exit. Some estimate that this could cost over 60 billion Euros.
“There is no question that the process of negotiation will influence the way the unity of the remaining members of the EU will evolve and the way the global economy will judge the process of Brexit and its ramifications,” he says.
“Brexit highlights and threatens the process of globalisation, as some find returning to nationalism alone will address their current economic challenges. The reality is that we need both nation states and globalism. However, we need to spend more time and energy to work out ways to improve the governance of globalism and create a sense of interdependence between nations and the global community.”
For further comment call Professor Fariborz Moshirian on 02 9385 5859 or 0425 380 626 or email firstname.lastname@example.org
Media contact: Julian Lorkin: 02 9385 9887
AGSM Scholar, Professor, Director of the Institute of Global Finance
School of Banking & Finance