Navigating a Potential “Brexit”

David Cameron, Prime Minister of the United Kingdom, included in his Conservative Party manifesto - released in April 2015 - a proposed referendum to decide whether the UK should remain in the European Union. After his party’s victory in May, Cameron started a renegotiation campaign to fix what he sees as wrong with the EU before the referendum, which is scheduled for 2017.

Britain’s mere contemplation of exiting the EU--referred to by some as the “Brexit”--reflects growing nationalism within Europe, especially at a time when the region is being inundated by immigrants. Indeed, one of the main motivations for many Eurosceptics is a hope that threatening to leave will force the EU to curb immigration to the EU, which would not only appease the nationalists but also help curb Europe’s growing refugee crisis.

The “Brexit” debate reached a fever pitch during the European Council meeting in Brussels on October 15-16. At the Council, the leaders of the other EU member nations requested that Cameron submit a concise list of demands by November, which he has yet to release.

In the meantime, two campaigns called "Britain Stronger in Europe" and "Vote Leave" have already emerged to advocate for remaining in the EU and secessionism, respectively. The former campaign argues that membership in the EU allows the UK to avoid exporter tariffs and bureaucratic red tape in trade deals with other member nations. However, Vote Leave argues leaving the EU would allow Britain to reallocate funds to invest more heavily in scientific research and new industrial development. The campaign also argues that the UK has little influence within the EU and that leaving would permit the nation to take stronger positions on issues such as free trade as a member of other international institutions.

A British withdrawal from the EU would require the UK to reestablish economic and trade relationships with the EU in a different capacity. If Britain were to the leave the EU, the country would be faced with a variety of options. The UK could join the European Economic Area alongside Norway, Iceland and Liechtenstein (all but one of the other EFTA countries that aren’t members of the EU), devise a free-trade agreement with the EU like the customs union with Turkey, or rely on WTO-facilitated access to the European market.

Despite a growing movement for EU secessionism, many in the UK still cite the benefits of the EU membership. Since joining the EU, Britain’s economy and trade have grown exponentially. The Centre for European Reform, a London-based think tank, determined that Britain’s trade with the rest of the EU is 55 percent greater than it would have been had the UK not been a member of the EU. Britain’s interconnectedness and economic reliance on the other EU nations is therefore one of the main obstacles facing the Eurosceptics.

Tensions between Britain and the EU are not new. In 1955, when the European Economic Community, the precursor to the EU, was formed, Britain was not included. Instead, it created the European Free-Trade Association with six smaller European countries and was only admitted into the EU thirteen years later, in 1973. Now, the Brexit threatens to alter what it means to be British and rattle one of the most established international bodies in the world.