Wed | Aug 16, 2017

Byron Blake | Brexit, Jamaica and the Caribbean

Published:Sunday | July 3, 2016 | 7:21 AMByron Blake
Byron Blake
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Brexit has cut the United Kingdom adrift, becalmed on the Wide Sargasso Sea. 

There is no land border and no way back to the European Union (EU). There can be no negotiating away of that four per cent majority Leave vote. There is no likelihood of a second referendum.

There is neither the political will nor social cohesion, both of which would have to be present in large doses to secure a change.

The immediate response to the bombshell has been widespread panic. This has been fuelled by the unexpected nature of the result, even though the polls had been indicating the strong possibility. Let me confess that I thought logic and good sense would have carried the day.

The second response is fear – fear of the unknown fuelled by the absence of any strategy or precedent. No country has ever withdrawn from the EU or, indeed, any such deep, complex and intertwined integration arrangement.

The pound sterling and other currencies, together with capital markets around the globe, have taken flight to safety, even as a significant portion of the population has had its wealth diminished with prospects for further loss. At the same time, xenophobia and racism have taken wings to unleash insecurity and reduce safety for large segments of the population.

Senior British political leaders, including Prime Minister David Cameron, Opposition Leader Jeremy Corbyn and the leader of the Brexit movement, Boris Johnson, as well as senior public servants, including the top British official in the European Commission, have either given up or are under pressure to give up their positions. Long-standing fault lines in the UK such as those between England and Scotland and England and Northern Ireland, as well as in other countries in the EU, have opened wide and new lines of divisions between the young and more educated vs older, less educated voters; and high technology-driven centres like London vs rural areas are emerging.

These are recipes for continued confusion in the UK. The ‘official’ responses out of the other 27 members of the Union have done nothing to reduce the confusion across the borders as they could hardly be more discordant.

Rational thinkers and analysts would consider these responses irrational, given that the objective conditions of the UK relations with the EU have not changed, and, in all probability, will not change for the next three years. The rules for withdrawal from the EU are clearly set out in Article 50 of the Lisbon Treaty. They involve two stages.

In Stage One, the country intending to withdraw shall not, may or will give official notification to the European Commission within 12 months of its decision to withdraw. Given the state of unpreparedness in the UK, the probability is that it will utilise the maximum time.

The second stage involves a two-year period of negotiations towards an agreed future arrangement. Again, given the range of issues and the complexity of the negotiations, the full period, possibly with some flexibility, is likely to be used.

The current arrangements, including any commitments of the UK to the European Development Fund, remain in place until the new paradigm is put in place in some three years.

It is worth reminding readers that political, social, and economic action in an emotionally charged environment seldom follows logic. The social, political and economic turbulence unleashed has already had negative consequences in the UK, EU and beyond. The medium- to longterm impact will depend on how long the panic continues.

REGIONAL IMPLICATIONS

What do the present and long-term developments imply for Jamaica and the Caribbean?

There will be change when the new arrangements come into being. The Caribbean will have little, if any, influence on UK-EU negotiations. It, however, must prepare to negotiate a new arrangement for trade, economic and technical cooperation with the UK.

The region has the benefit of knowing the time frame in which the negotiations must be completed if there is not to be a gap or break in economic and trade relations. The UK is highly unlikely to commence negotiations with any country or group until it has officially notified its intention to withdraw from the EU. It will then enter a period of two years of intense negotiations not only with the EU but with almost every major country and economic grouping around the globe. Its guiding principle will be “the UK’s economic and security interests”.

It will establish for itself a hierarchy of negotiations.

A key issue for Jamaica and, indeed, CARICOM, small as they are, must be to get themselves on the priority list. In this regard, there might be some guidance in what happened 43 years ago when Britain decided to join the European Economic Community (EEC).

The UK and, to some extent, the EEC were interested in the market preferences the UK enjoyed in the Commonwealth. They were also interested in secure long-term access at preferential prices to key commodities such as sugar, petroleum, rum, rice, bananas, cocoa and fish. The world was in a period of high and rising commodity prices.

Commodities of priority interest to the EEC were available in significant qualities in the Caribbean and Africa, especially in Nigeria and the Gold/Ivory Coasts, Mauritius and Fiji where the British had influence. The Caribbean recognised its importance but also knew that whether as individual countries or as a region, it would not have the standing to drive a hard bargain with the UK and, more so, the EEC. Further, the region’s position could be undermined by the various imperial powers in Europe seeking to divide and conquer.

The Caribbean made the strategic decision to:

I. Unify itself so its parts could not be exploited (the formation of the Caribbean Common Market); and

II. Make common cause with the countries in Africa and the Pacific so that individual weakness could not be exploited. They took the initiative to stimulate the formation of the African, Caribbean and Pacific Group for joint negotiations. The result was the historic Lome Convention, which included the sugar, banana and rum protocols, as well as structured arrangements for financial and technical assistance.

Jamaica and the Caribbean must now begin to identify their strengths and weaknesses, as well as potential alliances, and begin to prepare for negotiations in just over one year. It’s not a long time.

NEGATIVE IMPACT ON JA

In the more immediate term, Jamaica will be negatively impacted by the economic and social fallout of the panic. The extent will depend on the depth and persistence of the likely recession in the UK and possibly elsewhere. In respect of the UK, it will be felt mainly through remittances and pension flows, tourism and other services, in particular cultural services and future migration.

Where and how can Jamaica and the Caribbean mitigate these impacts? There is hardly any opportunity in the situation of tourists and remittances flows from the UK, which depend on people’s perceptions about their current and future wealth. These decisions are deeply personal.

There are opportunities for action in terms of the relatively competitiveness of the UK for tourists from third countries. The actions must, however, be directed internally to enhancing our product offerings and to promotion in third-country markets.

The most obvious area for product enhancement is in security. This must be addressed within each country and through regional cooperation. It is time to revisit and enhance the regional security system that operated for Cricket World Cup 2007. A peaceful environment might be the single most important attraction for tourists in a hostile and insecure world.

Pension and value maintenance of the savings of Caribbean pensioners in the UK and those who have returned or contemplating return are areas for innovative thinking by Caribbean policymakers. Can the region develop, for example, a mechanism for uniform implementation in all member states that would allow persons earning pensions in foreign currency to hold such funds in a foreign currency of their choice?

In terms of impact on other service areas, Jamaica, in particular, should seek to negotiate with the UK more predictable and less costly visa arrangements.

Ambassador Byron W. Blake is former assistant secretary general of CARICOM. Email feedback to columns@gleanerjm.com.