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“Brexit” is a shorthand word combining two words — ”Britain” and “exit” —for the United Kingdom leaving the European Union.

The Brexit vote was conducted in 2013, when then United Kingdom (UK) Prime Minister David Cameron was looking ahead to his re-election. He did not want to lose too many voters to an anti-European Union political party. So he promised, if re-elected, to hold a referendum on whether Britain would stay in the European Union (EU) or not. He said that the referendum would have just have two options — in or out and that it would be binding.

When Cameron made that promise, he and his advisers believed it would be a relatively low-risk ploy to deal with a short-term political problem. It turned out to be a gross miscalculation. The June 23, 2016 referendum to leave won 51.89%. 

While it is still not entirely clear why the British voted for Brexit, three possibilities have been advanced: the UK never fully accepted the legitimacy of European control over British institutions, the EU’s liberal views on migration, and what is seen as EU’s burdensome economic regulations. 

On January 31, 2020, after nearly four tumultuous years (https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-7960#fullreport), the UK departed from the EU. Now the UK and the EU begin a transition period until December 31, 2020, to negotiate new agreements on trade, security, and other areas. If no deals are reached, then the UK will leave without any such deals. 

Some experts say that a no-deal Brexit would cause economic chaos by eliminating trade agreements and imposing tariffs, customs checks and other barriers between the UK and the EU, its biggest trading partner. The EU counted for 54% of Britain’s imports and 43% of its exports in 2016. About a third of Britain’s food comes from the EU. 

In pre-Brexit moves, nearly 100 companies have already relocated from Britain to the Netherlands or set up offices there to be within the EU due to the UK’s planned departure from the bloc. Another 325 companies worried about losing access to the European market are considering such a move. The businesses are in finance, information technology, media, advertising, life sciences and health. These jobs and money are unlikely to return. 

European Commission President Ursula von der Leyen dismissed any UK idea of a loose trade deal with the EU. She let the UK know that access to the EU would require the UK to abide by the EU’s standards. I foresee difficult negotiations ahead for the UK. 

Stay tuned.