Pro Perspectives 10/18/19

October 18, 2019

UK parliament will vote on a Brexit deal with the EU tomorrow.

Remember, this is a deal based on the 2016 referendum where UK citizens narrowly voted in favor of leaving the EU (52 to 48).  

That gap would have been wider had it not been for a coordinated campaign by global leaders threatening a draconian outcome. 

With that, there was public shame associated with voting for the "unknown" over the "known."  But when left to the privacy of an individual vote, the people chose the unknown outcome as better than the known outcome.

But as we saw with Grexit, Brexit has created leverage. 

Despite the dire warnings for UK citizens, the reality is, everyone loses if the EU (and other world trading partners) were to turn their backs on the UK. 

The EU bluffed that it would play hard ball.  But as we near the finish line, they have agreed to establish free trade — no tariffs, no quotas.  And despite the warning by President Obama (in 2016) that the UK would be put in the "back of the queue" for a bilateral trade agreement, Trump has promised a "big trade deal" by July, following their exit.

With the above in mind, a withdrawal agreement has failed twice already in the House of Commons.  But given the fragility of the global economy, the state of global trade (with U.S. tariff escalations now including Europe), and the fatigue of the long, ugly Brexit path and negotiations, I suspect we get an approval of withdrawal, with the goal of moving on to the next chapter.