U.K. Consul General at School to Share Insight on Impact of Brexit
August 30, 2016
U.K. Consul General David Prodger, speaking to School alumni, students, faculty,
The United Kingdom is ending its membership in the European Union, but the country remains committed to close ties with Europe, open markets and a strong role as a “global player,” a top British official told an audience at the School this month.
Brexit – as Britain’s departure from the EU is known – doesn’t signal isolationism for the world’s fifth largest economy. Instead, it offers the UK an opportunity to become more globally competitive without the constraints of the 28-member EU, according to the UK’s consul general in Miami.
“It is not the end of globalization. In many ways, it could be the next evolution of globalization,” said David Prodger, speaking to School alumni, students, faculty, staff and friends.
Financial markets initially tanked after the U.K. surprised the world by voting June 23 to exit the world’s largest trading group. Many polls had suggested a win for “Remain,” but the “Leave” option won convincingly by more than 1 million votes, Prodger said. Many analysts feared Brexit would mean erosion of the UK’s edge as an international hub for finance as well as recession for the Great Britain.
But as the UK government quickly reorganized and has been working to allay concerns, markets have since improved. The London stock market FTSE index now tops pre-vote levels, and the value of the pound has inched up from $1.29 lows. Today, many analysts foresee a slowdown – not recession - in what had been the fastest-growing economy among big industrialized nations since 2014, said Prodger.
“There hasn’t been the apocalyptic, world-ending scenario that many predicted,” the consul general said.
What’s becoming clear instead is that Brexit won’t be sudden and that the UK aims to smooth the transition in the coming years, Prodger said. For example, the government just created a Department of International Trade to renegotiate accords with the EU. It also has pledged to reduce bureaucracy, empower small business and boost UK competitiveness, especially by promoting knowledge-based industries and innovation. “In fact, leaving the EU may speed that up [competitiveness push] to some degree,” Prodger told the crowd.
The exit vote comes after decades of debate within the UK over how best to integrate with Europe. Though Britain joined the then-European Economic Community in 1973, it never adopted the group’s euro currency and long rejected a strong federalist structure for the sprawling EU – even before the conservative Tory party in 2015 called a referendum on leaving the group, said Prodger.
“Trying to negotiate with 15 [countries in the EU], as it was, and 27 later is not easy…Trying to get consensus is not easy, “Prodger said. Beyond the UK and across Europe, there’s “great discontent” over how the EU handles such thorny questions as defense, business rules and energy policy, he added.
The two-month campaign for a Brexit vote also ended up being “quite frustrating” for Prodger on a personal level too. He’d hoped for a “fact-based” discussion, but campaigning became “emotional,” especially over the subject of rising immigration to the UK. Immigration proved a driver behind many “Leave” votes but was hardly addressed by the economics-focused “Remain” campaign, he said.
“The referendum itself is not legally binding, but… Brexit means Brexit. There’s no going back,” the U.K. diplomat said. “We must respect the will of the people.”
To leave, the U.K. must invoke Article 250 of the EU treaty, something never before done. That in turn will trigger a two-year period for negotiating new accords and the exit, unless extensions are approved. To be reworked: some 80,000 pages of existing UK-EU agreements, including more than 50 free-trade accords – a task so large it requires the UK develop a detailed strategy first, said Prodger.
Florida has special reason to care about the UK’s future. Prodger said Britain is the top country for foreign direct investment in the state, with some 43,000 people in Florida employed in U.K. firms. Nearly 1.5 million people from the UK visit Florida yearly, and some 400,000 UK citizens live in Florida.