image caption: Gurmukh Singh OBE

United Kingdom Dis-United Over Brexit

    The two-party system in UK politics is breaking down. The Prime Minister and his cabinet are heading towards a clash with the Parliament and both main political parties have serious internal divisions. Another Brexit referendum will not bring the country together.

Another serious consequence is that regional divisions in the United Kingdom between Scotland, Northern Ireland, England and even Wales, are increasing. This is the situation as the United Kingdom, now bitterly divided, is heading towards a no-deal Brexit and, possibly, a constitutional crisis. As loyal citizens, British Sikhs are very much concerned. This week, we look at some related political and trade facts.

Firstly, the border between Northern (British) Ireland and the independent country of Ireland is a real problem which cannot be resolved without having what is called a &ldquohard border&rdquo between the two parts of the island of Ireland &ndash the norther part which is in the UK and the southern part, the country of Ireland, which is in the EU. Once the UK leaves the EU, that means having physical customs and immigration checks at the border between the two parts of Ireland.

Such a hard border will go against the spirit of the Good Friday Agreement which brought the two Irish parts closer. It was a major political development in the Northern Ireland peace process of the 1990s. It allowed for free flow of traffic, people, goods and services between the northern and southern parts of Ireland. If a hard border is re-imposed then Northern Ireland which is part of the UK, can return to the armed conflict between the Protestants (pro UK) and the Catholics (pro one Irish nation).

As for impact on trade, in 2017, other EU countries sold more to the UK than they bought from the UK. A quick Google search shows that the EU accounts for 44% of UK exports and 53% imports. UK exports of goods and services to the EU were worth £274 billion and imports to the UK from the rest of the EU were worth £341 billion. So, EU benefits from trade with the UK by £67 billion. Germany benefits most by £25 billion. UK benefits most from trade with southern Ireland by over £12 billion. The EU as a trading block is the largest UK trading partner. America is largest trading partner country outside the EU accounting for just under a fifth of UK exports and just over 10% of imports in 2017. However, UK trade with countries outside the EU has been increasing in recent years, especially with the rise of China and India as major trading nations.

After Brexit, future trading of UK with EU countries will continue of course but it will be according to World Trade Organisation rules as for the rest of the world. This will mean higher tariffs (customs duties) on some goods.

Leaving the EU without a deal will cause problems for the EU as well as the UK until things are sorted out. However, it must be remembered that UK cannot enter into firm trade deals with other countries without first leaving the EU.

Whether one of the main perceived causes for Brexit, the issue of immigration, will be resolved, remains to be seen.

Gurmukh Singh OBE