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THE IMPACT OF THE BREXIT ON BRITISH OVERSEAS TERRITORIES
Cebotari Svetlana, State University of Moldova, Chisinau, Moldova
Budurina-Goreacii Carolina, State University of Moldova, Chisinau, Moldova
E-mail: svetlana.cebotari@mail.ru
Abstract. The exit of Great Britain from the European Union, "Brexit", respectively "British exit", has become one of the most important processes that trouble and concern the European world and not only. The impact of Brexit on British-European relations is considerable. This article aims to highlight the main consequences of Brexit on the British overseas territories.
Key words: impact, Brexit, British overseas territories.
Britain's exit from the European Union, "Brexit", respectively "British exit", is one of the most spectacular and important processes that trouble and concern the European world and beyond [4]. Organizing a referendum on the withdrawal of Britain from the European Union was one of the election promises made in early 2013 by Conservative leader David Cameron. At the time, European community leaders, including the British Prime Minister, were optimistic about the outcome, in the confidence that Britain's citizens would vote to continue on the European path. Held on June 23, 2016, the result of the referendum was 51.9% for exit, the remaining 48.1% voting for remaining in the Union [1]. However, the vote was split between the component countries of the United Kingdom. Thus, England and Wales voted to leave, while Scotland and Northern Ireland voted to remain in the European Union. This result led to the resignation of Prime Minister David Cameron, a supporter of Britain's stay in the European Union, and the appointment of Theresa May as prime minister, with the extremely complex task of negotiating the country's withdrawal from the European Community. During the debate on the referendum, a number of arguments were highlighted regarding the need for Britain to leave the European Union. These arguments can be grouped according to three main considerations: economic, political and security. Regarding the economic aspects, two considerations were particularly highlighted.
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Firstly, the fact that membership of the European Union undermines Britain's relations with emerging markets, namely India or China, with which there is no trade agreement. Leaving the EU would allow a diversification of economic relations.
Secondly, economic policies would no longer depend on Brussels' decisions, so that by lowering taxes on corporations, investments and other incentives, they would maintain and increase jobs, the headquarters of international banks and companies.
Regarding the political aspects, the issues concerned legislative considerations. The large number of laws, directives and decisions coming from Brussels and the European Court of Justice is considered unacceptable. It was considered necessary for the British courts to become sovereign again. Here can be added some aspects related to the attempt at European federalization, categorically rejected by the British who are moving towards decentralization to the regions and to the level of the Scottish Parliament / Parliament in Wales, etc. A second consideration concerns the influence that the United Kingdom should have in the system of international relations. This is a consequence of the imperial idea, in the sense that for about three hundred years the British Empire was a world system of dependent territories - colonies, protectorates and other territories - under the sovereignty of the British Crown and under the administration of the British government. The policy of granting or recognizing significant degrees of self-government of dependent territories, which were favored by the very large size of the empire, led to the use, in the twentieth century, of the notion of British Commonwealth, which largely included dependent territories with a degree of self-government under a more symbolic British sovereignty. In 1931 the term was transformed into a statute and today the Commonwealth includes the former spaces of the British Empire, in a free association of sovereign states [2].
Following this vote, the British Government launched the withdrawal process on 29 March 2017, by activating Article 50 of the Treaty on European Union. Thus, in October 2019, the leaders of the EU 27 and the British side reached a political consensus on the Agreement on the withdrawal of the United Kingdom from the EU. It was subsequently approved by the UK authorities and the EU and entered into force on 1 February 2020 [5].
The British decision to leave the European Union (EU), formalized in the Exit Agreement, opens the door from 2021 to a political and economic experience with global repercussions, involving the remnants of the old British Empire, from Gibraltar to the Falklands and the South Atlantic. It is known that the United Kingdom has 14 overseas territories (BOTs) scattered around the world, 10 of them as part of the decolonization process supported by the United Nations. Only one, Gibraltar, had a voice and a vote in Brexit. The other nine were directly associated with the EU through the Overseas Territories Association Decision adopted in 2013 by the European Council. However, despite the efforts of the representatives of the 14 Overseas Territories (BOTs) in London and other EU members, and of Prime Minister Boris Johnson's promises to give them priority in negotiations with Brussels, the exit agreement concluded on 31 December expressly left the overseas territories. Thus, analyzing the impact of Brexit on overseas territories, it should be noted that they will
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be affected by lack of economic aid or restricting access to their products through export quotas or payment of tariffs. In this scenario, it will be tested as never before for its "modern relationship" with BOT, at least from a commercial and technical point of view, will depend exclusively on London's assistance to compensate for the EU's dominant presence.
Analyzing the effects of Brexit on the economies of the British overseas territories, some negative aspects can be highlighted. In this context, it is worth mentioning the loss of advantages such as: the key provisions of the 2013 SAD for the British Overseas Territories included objectives such as establishing closer economic relations between the BOT and the EU; improving competitiveness and strengthening the resilience of BOTs.
But there have also been pre-Brexit financial instruments whose loss will have direct consequences for BOT. The total EU bilateral funding for all OCTs through the European Development Fund (EDF) in the period 2014-2020 had a budget of EUR 30.5 billion. There were also funds provided by the European Investment Bank (EIB) and funds from the EU's general budget for research, environment, education, innovation and competitiveness. The EU has become one of the key players in the BOT's relationship with the rest of the world. Among other things, a significant volume of foreign trade for most BOTs was with the EU, largely due to the possibility of free access to their exports without payment of tariffs or quotas. Similarly, EU financial support to the UK's overseas territories helps in a number of key areas, including strengthening economic capacity and diversifying the productive matrix, adapting and mitigating climate change and sustainable energy development. Other key elements in the relationship between the EU and the British Overseas Territories concerned the free movement of the populations of these territories in the Schengen area and the institutional relationship with the EU itself, which is very valuable for those territories in international dispute. The benefits of EU membership and the complications of leaving it, have a much greater impact on BOTs. Anguilla, a territory of almost 15,000 inhabitants in the Caribbean, had the sole source of development of the island in support of the EDF. The Virgin Islands, due to their GDP, cannot qualify for loans from other countries and have relied exclusively on EU funds.
A particular case is the Falkland Islands. The greatest impact of Brexit for BOTs is generally eminently economic in nature, but in the case of the Falkland Islands the implications of the British abandonment of the integrated European space are deeper. Thus, in the Falklands, we can assume the existence of two possible consequences related to Brexit: one economic and the other political. It is estimated that almost 80% of total exports of the islands (fish, meat and other agricultural products), which amounts to 300 million dollars per year, were destined for the EU for its tariff benefits: almost 75% of the islands' GDP depended on access to the European market. Of this total, fisheries accounted for 41% of GDP and, of this percentage, 94% were exported to the EU. Moreover, the island fishing industry benefits from various provisions of the SAD, such as the definition of the concept of originating products. The fishing industry, by selling fishing licenses for a period of 25 years, in flagrant contradiction
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with United Nations resolutions, has used the fleets of other countries, especially Spain, for the exploitation of fishing.
Without the benefits of the SAD, which allows registered fleets or the flag of a Member State of the Union to operate in BOT industries, it would be almost impossible for Falkland to export its products to the European market. The island government suggested to the British Parliament that "any major change that would lead to less beneficial access to imports / exports could be catastrophic for the economy and population of the Falkland Islands".
The effects of Brexit on the islands are already visible. As of January 1, 2021, the island's exports are subject to World Trade Organization (WTO) tariffs. According to WTO provisions, the islands can only trade between 6% and 18% for fish products and 42% for meat. These restrictions represent a drop of more than £ 10 million for the Falkland Islands' economy "a catastrophic economic blow", as defined by the illegitimate island government. In turn, the Falkland Islands are left out of the European Economic Development Fund (EDF), aid to encourage the financial and social growth of overseas countries and territories, where the islands have received EUR 5.9 million in budget support. This has contributed to the "Las Islas Plan, 20142018", with the aim of diversifying the economy, in particular in relation to reducing dependence on the fishing industry.
Brexit also has an impact on the political dimension. On political issues, the biggest concern of the illegitimate British government in the islands is that Brexit would remove the obligations of other Member States to recognize and accept that the overseas territories are part of the United Kingdom and could consequently lose support from the rest of Europe and that this generates greater support for Argentina in the sovereignty dispute. Since the beginning of the Brexit process, British influence and the support of its former European partners have diminished considerably. In this context we could bring the following examples:
- the loss of the British judge at the International Court of Justice (the first time in history when a permanent member of the UN Security Council does not have a magistrate at the Court in The Hague).
- the lack of support from European countries throughout the Consultative Opinion process before the International Court of Justice conducted by the Republic of Mauritius in relation to British actions on the Chagos Archipelago.
- the veto power granted by Brussels to Spain in any decision concerning Gibraltar, while negotiating an agreement with the United Kingdom.
As former British Foreign Secretary William Hague said: "We risk losing the guaranteed solidarity of 28 nations in terms of British sovereignty over the Falklands, including those with strong ties to Latin America, such as Spain and Italy". Brexit reveals a new range of possibilities for the Falklands issue, with as yet unknown consequences in trade and diplomacy, which could allow new opportunities for Argentina to finally resolve the sovereignty dispute. The EU is the main destination for island exports. With the imposition of tariff barriers or quotas for its products, the Latin American market is offered as an attractive possibility. But access to them
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requires Argentina's consent, given the sovereignty dispute and regional support for the national position.
The aspect of sovereignty is more sensitive. Until now, European countries have shyly followed the British position, as the islands were recognized as the overseas territory of the United Kingdom in the Treaty of Lisbon. After Brexit, this support could weaken, as there would be no such obligation under the European Constitutional Pact. EU Foreign Affairs and Security Policy spokesman Peter Stano announced that there would be no change in the recognition of British sovereignty over overseas territories. In other words, the same position will be maintained - only for the EU as a bloc: the non-declaration of sovereignty controversies while they exist unresolved. In any case, both outside and inside the EU, the UK continues to an important influence on the international arena, and the situation requires an accurate assessment. Argentina's central and inalienable goal is to regain the exercise of the sovereignty of the Falkland Islands: this implies a strategic dimension that conditions any decision
[3].
Conclusions
The EU has repeatedly emphasized its support for a regulated withdrawal of the United Kingdom from the Union. It has reached an agreement to withdraw from the United Kingdom to ensure that there will continue to be cooperation on various issues to the benefit of both parties. Brexit is a consequence of some of Britain's internal realities, but also a consequence of imperfections in the functioning of the European Union. Based on the situation created, it is worth mentioning that the European project is a reality that must exist because this reality offers political, social and economic opportunities.
References:
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2. Chiriac M. BREXITUL, intre necesitate §i oportunitate. - URL: https:// revista.unap.ro/index.php/revista/article/view/356
3. Los llamados Territorios de Ultramar Británicos ante el Brexit. - URL: https:// www.embajadaabierta.org/post/los-llamados-territorios-de-ultramar-brit%C3% Alnicos-ante-el-brexit?
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