June 23, 2016, London, United Kingdom
“Remain, of course!,” my English legal scholar friend Carol explained her vote that day to my German friend Ben as we gathered for my birthday dinner at Hutong restaurant in the upper floor of the spectacular 95-story skyscraper known as The Shard, the tallest building within the 28 member states of the European Union (EU). Carol and I had known each other for nearly two decades, and we also toasted that evening to her recent appointment as department head of the law faculty.
Since I arrived in London that morning from Geneva, I was bombarded by the numerous pronouncements one way or the other about the “Brexit” vote to “Remain” or “Leave.” It was the topic of polite and serious conversations throughout my professional meetings that day with several British companies. They were all exporters to the EU and beyond, and were rather nervous about the negative implications of being shut out of the European single market as well as retaining talented European employees in the country.
As I went from London City Airport to the West End and about town, the multi-cultural mix of Black Cab and Uber drivers were also very opinionated, with a vocal Englishman proclaiming his vote to leave due to democratic, immigration and budget concerns — while African, Romanian and South Asian drivers all expressed their anxieties about whether they could or still wanted to work in the UK if it were to leave the EU.
By dinner time, the political rhetoric was reaching its end game as the polls were closing and early indications were that the voting would be very tight with the Remain camp likely to pull ahead. Moreover, the financial markets on the eve of the vote were banking on the pound rising and the U.K. staying intact in the EU which it joined in 1973, and last voted to stay in 1975 by a 67% margin.
The sunrise the next morning on Friday, June 24 flooded my hotel room in Shoreditch around 5am, so I turned on the TV and saw the British media had just made their call based on a 52% to 48% margin — the UK had voted to leave the EU, the first time a major member state has done so! The stunning result sent shockwaves across Europe and far beyond the English Channel, unsettling Asian markets that were open before the traders in the City of London had arrived at their desks. Soon after, political and financial chaos ensued as Prime Minister David Cameron announced his resignation and the pound dramatically lost its value… and this was just the early and blinding hours of Brexit.
Among the first interactions I had were with my global MBA classmates who hours before were sending birthday wishes in a WhatsApp chat group. The discussion quickly shifted to a lively and sometimes humorous debate over the implications of #Brexit or #Regrexit which also started trending.
Was it time to buy pounds that were losing their value and weight rapidly? Would German or French become the prominent languages of the EU after English loses its champion? And ominously, was this a sign of anti-globalization sentiment on the rise and that Donald Trump — who coincidentally or purposely was in Scotland at his golf resort and supported Brexit — might be the next major populist and political uprising in the U.S. elections in the fall?
The day before the Brexit vote, I was visiting my former colleagues at the World Trade Organization (WTO) in Geneva, and also stayed with my Swiss friend Matthias who previously worked as a trade negotiator for the European Free Trade Association (EFTA) comprised of non-EU members Iceland, Liechtenstein, Norway and Switzerland. As a trade specialist, I realized that the UK would soon face great difficulty in unraveling exiting rules AND launching new trade agreements with many key trading partners after four decades of aligning its trade policies with the EU. Outside the EU, the UK stands to lose its negotiating leverage and face many regulatory complexities going solo while trying to obtain and digest trade preferences a la carte.
There was much talk after Brexit about whether the UK could still gain access to the EU single market — the world’s largest, or lose its financial “passporting” and other rights as it was reluctant to accept the EU’s four fundamental principles including free movement of labor in addition to removing barriers to goods, services and capital. Some observers suggested the UK’s best hope would be for Norway or Swiss-style deals (as members of EFTA and not of the EU) which allows them access to the EU single market while having little to no political say on the other freedoms of movement. Or, the UK might find itself forced out of the EU single market in the initial period as a deterrent to other countries considering a similar path, and in the “back of the queue” when it comes to trade deals with major trading partners like the United States, as President Obama had warned prior to the Brexit vote.
The political, economic and social turmoil has yet to abate as much uncertainty remains in the near term and years ahead, including when and how exit negotiations with the EU will proceed once the UK invokes Article 50 of the Lisbon Treaty allowing it up to two years to withdraw from the EU. The UK is facing internal as well as external crises as civil war has erupted within the ruling Conservative and opposition Labor parties — coupled with the threat of sovereign breakup as Scotland and Northern Ireland supported remaining as opposed to England and Wales who favored leaving. The UK’s “Independence Day” ironically could result in another Scottish referendum of independence and the reunification of Ireland, while making England a smaller and less influential country.
Birthdays are often a time for reflection for me, and apparently for the EU on this pivotal day forward given its monumental and divisive decision to leave the EU. Time will tell whether this decision was a very bad one for the UK, the EU and global cooperation overall, or if these British isles can manage to persevere and punch above their weight just as they have extended their influence over many generations across the world.
As I looked upon the gleaming city of London from the glassy Shard tower upon turning another year… it struck me that age, wealth and the public mood are ever shifting and a reflection of the veritable present, and not necessarily of an established past or an impulsive future.
Time is both a savior and enemy, always moving forward with precision and uncertainty. In the face of this unpredictability, perhaps the best advice to heed is to “Keep Calm and Carry On.”