Although most of the debate and press coverage on the impending Brexit vote is focused on the European Union, Thursday’s referendum will have effects all over the world. Below is a look at some of the fascinating Brexit conversations that are going on, or are about, elsewhere in the globe.
THE UNITED STATES
The U.S. response to the Brexit involvement has been well-publicized since President Obama, on a visit to London in April, came out strongly in favour of the Remain campaign, stating that a Brexit would push Britain “to the back of the queue” in making post-EU trade deals with the U.S.
Presumptive Democratic presidential nominee Hillary Clinton is in agreement with him, as are the majority of Democratic and establishment Republican lawmakers. Presumptive Republican presidential nominee Donald Trump, however, supports the Exit campaign, having stated: “I think the migration has been a horrible thing for Europe. A lot of that was pushed by the EU. I would say that they're better off without it personally” earlier this month. On Sunday, he has also added “a lot less bureaucracy” as a reason that Britons should consider voting Exit on Thursday.
The possibility of a Brexit can have an important political consequence for the United States: As the closest U.S. ally in Europe, Great Britain is often instrumental in voicing American concerns and interests within the EU. Some analysts indicate that a Brexit would thus be harmful to U.S.-EU cooperation, making the “special relationship” between the U.S. and the U.K. less “special”.
Also part of the American debate is the economic repercussions of a possible Brexit. TIME Money recently reported that “In the lead-up to the Brexit vote, the dollar has gained about 2% against a basket of foreign currencies, after falling around 6% earlier in the year” and argued that a further strengthening of the dollar due to a Brexit would make it “harder for U.S. companies to export their goods abroad.” The possibility of lower interest rates as a consequence of Brexit are also seen as harmful to the US economy in the long run.
Furthermore, CEOs of various U.S. banks and financial institutions with European headquarters in London, including Citibank and JP Morgan Chase, indicated that office relocations and cuts in the number of U.K. jobs would be on the table if the U.K. is no longer a part of the EU after Thursday.
CHINA
China, a country usually reluctant to comment on the internal politics of other nations, has come out strongly against a Brexit. China’s foreign ministry quoted President Xi Jinping as saying: ““China hopes to see a prosperous Europe and a united EU, and hopes Britain, as an important member of the EU, can play an even more positive and constructive role in promoting the deepening development of China-EU ties.”
The stance is not a surprise considering that the UK constitutes a crucial base in the Chinese government’s efforts for the interationalization of the Yuan. Earlier this year, London became the second largest base of the currency in the world following Hong Kong, and China had a trade volume of $78.5 billion with the U.K.last year.
This trend is largely due to what the U.K. government website Gov.uk calls “passporting”, which “allows a financial services firm that runs out of the U.K. to set-up a branch of their firm in another EU country, or sell their services to another EU country on the basis that they’re authorised to do so (and regulated) by the U.K. Companies in countries that don’t have access to the EU Single Market…set-up subsidiaries in the UK so that they can get a passport.”
The website argues correctly that “Access to the EU Single Market has been a significant factor in the U.K. becoming a major global financial centre” as the U.K. has international trade laws that are much more accessible than most other EU companies. Many analysts agree that a Brexit, as it will end the U.K.’s position as a gateway to the EU Single Market, could drive away the growing Chinese (and American, for that matter) capital and business in the country.
INDIA
India, which has also seen a dramatic growth in trade with the United Kingdom in the past decade, is home to a robust debate over whether a Brexit would benefit it. Analysts point out that the U.K. is the home to a reported 800 Indian businesses employing over 110,000 people, as well as to the largest Indian diaspora anywhere.
One of India’s largest business organizations, The Federation of Commerce and Industry (FICCA), came out in February in support of a Remain vote, noting that a Brexit would mean “considerable uncertainty” for Indian businesses and ventures in the U.K. A report by the State Bank of India (SBI), India’s largest commercial bank, however, has stated “though such an exit brings up a lot of uncertainty within Europe, it definitely opens up opportunities for India”.
On the British front, Employment Minister Priti Patel, a Conservative with Indian origins, has been a prominent face of the Exit campaign, arguing that “many members of the Indian diaspora find it deeply unfair that other EU nationals effectively get special treatment…This can and will change if Britain leaves the EU. A vote to leave the EU is a vote to bring back control over immigration policy to the U.K.” Her statements have been opposed by a number of other MPs with Indian origins.
In a piece for India Times, Didar Singh reminds that a large number of analysts point out that, similar to the case with the U.S. and China, Indian businesses make use of “passporting”, and Indian companies and economic interests would suffer in the long run form a Brexit. On a visit to London last November, Indian PM NarendraModi, Singh says, also “echoed this view”.
THE MIDDLE EAST
The Middle East has featured prominently, if indirectly, in the Brexit debate, with both sides intensely accusing the opposing side of risking an influx of immigrants and refugees (and Muslim extremists) to the country.
Prime Minister Cameron has stated that “If those (EU migration) controls weren't in place there would be nothing to stop thousands of people crossing the Channel overnight and arriving in Kent…and claiming asylum,”.Where Cameron was blamed for fear-mongering, the Exit campaign drew accusations of utilizing hateful and racist rhetoric when it used campaign posters saying “Turkey (population 76 million) is joining the EU. Vote Leave, take back control.” And pro-Exit defense minister Penny Mordaunt defended the tactic saying that this (extremely unlikely, as Cameron later noted) accession would leave the U.K. “vulnerable to millions of terrorists, gangsters and 12 million more guns”. The strong anti-immigration rhetoric from both sides means that whatever the outcome of the vote, the EU will not only have to revise its policies regarding immigrants and refugees from the MENA region but also its accession policies.
On the international politics side of things, in an expert comment for The Chatham House, Jane Kinninmont argues that “British policy towards the MENA region is largely independent of the EU, so would not be radically reshaped by a Brexit – but the opportunities to work on peace, rule of law or human rights would diminish.” She points out that Britain would lose influence especially over the Israeli-Palestinian conflict, where “once the EU has reached a common position, then Britain’s influence would be minimal”. The Middle East Eye reported that a right-wing, pro-settlement Israeli group called Regavim has recently come out in support of the Exit campaign in a “mock video of a masked Palestinian militant purportedly from the Hamas-ruled Gaza Strip urging UK citizens to remain in the European Union because it supports the Palestinians.”
In a piece for Al Jazeera, Martin Jay quotes two senior French admirals in saying a Brexit would lead to a “A new EU with less staff, power and activities will be the order of the day – with the first thing to be scrapped being the deluded foreign policy dossier, including the EU army”, with Gulf countries potentially reaping the political benefits. Other analysts point out the reallocation of capital that could result from a Brexit could also benefit Gulf states, and disagree on whether the sizeable real-estate investment in the U.K. from these states would be affected.
Analysts also argue, however, that an exit from the European Union could allow the U.K. to sign separate trade treaties with countries like Morocco, where the possibility of an EU deal is at a deadlock due to the conflict in Western Sahara, and Tunisia, whose efforts to expand exports of commodities such as olive oil to the EU are countered by EU-member producers such as Greece and Spain.
AFRICA
The debate regarding the possibility of a Brexit and Africa is focused on EU’s Common Agricultural Policy (CAP). Under CAP, the European Union subsidizes European farmers, making it much harder for African agricultural producers to compete in British and European markets. Several analysts point out to the U.K.’s opposition to CAP in its current form, indicating that a Brexit and a subsequent removal of CAP subsidies might spell the opening of British markets to African producers.
Gitura Mwaura, writing for the Rwandan daily The New Times, however, argues “…I am doubtful of the presumption Brexit would lead Africa to “equitable trading agreements with the UK”. If Brexit came to be, my bet would be Britain would have to compete with the EU, with UK not likely able to unilaterally remove farming subsidies.” Uzo Mazu of Borderlex points out that even if a Brexit led to increased appetite in the UK for African trade, “Africa might have to wait in line, after the US, China, Japan, Brazil and India, to name a few.”
Other analysts point out the grievances in African Commonwealth states regarding what is seen as preferential treatment of EU migrant workers over applicants from the Commonwealth, and point out that a Brexit might strengthen the prospects of easier migration to the UK from the Commonwealth.
Reuters Africa reported on Monday, however, that “(The South African Rand) buoyed along with other emerging market currencies by lessening fears of Britain voting to leave the European Union.”