You have definitely heard about the titular “British exit” or better known as Brexit.
While it has been here for a quite some time, it is possible to be easily confused by all the jargons. To help you conquer this feat, here is a quick rundown to demystify all jargons commonly used.
While the EU-UK trade relationship is going strong, it is still possible for this partnership to compromise the border on the island of Ireland. This is where the “backstop” jargon comes.The backstop is essentially a level of economic security guaranteed by government, which will come into play regarding the Irish border after Brexit if a larger contract or technological resolution cannot keep it as untroubled as it is today.
The EU suggested the idea of effectively keeping Northern Ireland in essential locations. However, the government itself does not agree to it, believing it would only negatively impact the constitutional integrity of the UK.
This one right here is all about understanding Brexit impact on trading. By essence, customs unions refer to a group of states that have agreed to charge the exact same import taxesas each other. More importantly, the agreement is to enable free trading between these states. Not only do custom unions significantly reduce administrative and financial barriers, but it also greatly improves economic co-operation.
However, this one right presents different advantages and disadvantages in terms of leaving the customs unions. The main advantage, in particular, is that Britain can finally negotiate all free trade deals with no-EU countries. As far as the disadvantage is concerned, trading would mean facing tariffs and other non-tariff limitations. And while the United Kingdom is still capable of trading with EU countries, this could still bump up the cost of goods.
Single market is basically an association of countries trading with each other despite having no tariffs and/or restrictions. It was back in 1993 when the European single market became official. It accounts for at least 25 percent of the global GDP and is, by far, the largest trading partner of Britain. Right now, about 45 percent of exports from the UK belong to the EU; whereas the 50 percent are from the latter.
When talking about access to the single market, it is largely based on countries pledging to the core principle. This principle, in particular, is all about the free movement of capital, goods, people, and services.
European Economic Area
This refers to the area that is responsible for providing free movement of people, as well as capital and services deemed to be within the European single market. When talking about membership, it can only be opened to member states of both the EU and the European Free Trade Association or EFTA.
EFTA, on the other hand, are states considered to be under the umbrella of the European Economic Area Agreement. They are not necessarily members of the EU, but they can definitely participate in the latter’s internal market with ease. But for this participation to be considered valid, EFTA states must able to adopt almost all EU legislations relating to the single market. The only exceptions, however, are laws pertaining to fisheries and agriculture.
European Court of Justice
This is basically EU’s judicial institution and manages disputes between parties. Even more so, it makes sure that the European law is not only properly interpreted but as well as applied accordingly in a similar way in all member states.
According to Brexit experts, the aforementioned can greatly affect and compromise British justice; hence, they are hell-bent in removing the United Kingdom from its hands. But as for those who believe otherwise, this could only mean that the European Court of Justice will be consistent in influencing British laws. These are individuals who believe there is a great need for the UK to keep all trading ties closely with the EU.
World Trade Organisation
A global organisation, the World Trade Organisation is responsible for dealing with rules concerning the trade between countries. The organisation’s agreements are all signed and negotiated by most of the world’s trading countries. And since Britain is a member, it is expected to negotiate different terms – regardless of new or being updated – relating to its membership.
Well, there you have it – some of the common Brexit jargons. As you can see, they may appear difficult to consume, but they are pretty straightforward. As such, make sure to keep them in mind, so you can better understand all that is happening.