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Impact of Brexit transitional period on regional stability, development

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According to many observers, it is the adjustment of interests as well as the balance of rights and obligations that made the UK withdraw from the union. AFP

Impact of Brexit transitional period on regional stability, development

With the conclusion of the Brexit withdrawal agreement earlier this year, the UK has entered an 11-month transition period. However, the ensuing Covid-19 pandemic outbreak, anti-globalisation movement and booming populism catalyse changes in international relations, especially the complicated history of Northern Ireland “Troubles”, generally referring to the roughly 30-year period of violence and political upheaval in Ireland that spanned from the late 1960s to the late 1990s, remains an implicit problem. Such a situation has made all parties concerned to doubt whether the negotiation in the transition period could be concluded by the end of this year as scheduled, although it is much hoped that the UK and EU together are able to make it.

Faced with massive difficulties and so many details to be worked out, the UK is unlikely to make a turnaround against Brexit. Either way, the mid- and long impact of Brexit on Europe and the international community in general, especially on trade with the rest of the world, deserves some attention.

To begin with, Brexit, a major setback for the EU process, exerts an impact on the EU and the European continent both in the current and over the long run. At present, the EU is striving to adapt to a new round of global changes against the backdrop of Brexit and pandemic outbreak on the one hand, and proposing more realistic new growth ideas to increase the union cohesion on the other. The union’s joint “reunion” process still enjoys inherent motivations, and the prospects are promising despite grave challenges.

Second, the UK’s desire for growth is mainly accountable for the Brexit process. Since joining the European community in the 1970s, the UK, with different legal system, governance concept, industry and economic structure in comparison with other major European countries, has often complained about budgets and other issues. Also, the evolution of the international environment, the rise of emerging economies, and the impact of immigration issues have increasingly highlighted the domestic political drive of Brexit. Eventually, according to many observers, it is the adjustment of interests as well as the balance of rights and obligations that made the UK withdraw from the union.

Third, Brexit negotiations during the transition period show that the international relations and governance can be adversely affected against the backdrop of post-Cold War globalisation, changes in technology, trade and investment, digital and technological gaps, widening wealth gap, and tremendous changes in world economy. Therefore, all parties including the EU have been strengthening their adaptation to those “new normal”. In an international governance environment, however, where human society is still mainly based on the sovereign state system, slogans and long views alone are far from being enough for tackling urgent or near-urgent challenges in international and regional cooperation. Practical measures are indispensable, and the ability to respond in unity to crises and solve problems should be strengthened.

Fourth, the general trend of global and regional cooperation will not change. The EU and the UK, to some extent, has been synchronising with each other by Brexiting and engaging at the same time, and some specific negotiations on the implementation of the withdrawal agreement are the perfect examples. Also, Britain, Northern Ireland and the Republic of Ireland have always been committed to maintaining traditional connections and cooperation.

Brexit is a rare example of a major adjustment in globalisation, and the uncertainty it brings is extensive. The new relationship between the UK and EU as well as the UK and the Republic of Ireland will inevitably bring both opportunities and challenges to Sino-EU, Sino-UK relations when it comes to cooperation in the fields of economic growth, trade and investment.

Due to the uncertainty of Brexit and relevant rules, Chinese enterprises and business community have actively adjusted themselves to the new “situation”, and it is truly hoped that all parties in Europe can continue to resolve the issue among themselves through dialogue and consultation, maintain regional peace and stability, and continue to strengthen communication and pragmatic cooperation with emerging economies.

China and Europe have enjoyed long partnership in investment and trade, and the bilateral relations have generally developed well despite Brexit and pandemics. According to China Customs statistics, the EU maintained the position of China’s largest trading partner last year, with trade volume reaching 4.86 trillion yuan ($687 billion), an increase of eight per cent. The leaders of the two sides have both emphasised the significance of strengthening solidarity, safeguarding multilateralism, supporting the leading role of the World Health Organisation in the global multilateral anti-pandemic efforts, and jointly responding to the pandemic challenge.

Sino-UK and Sino-Ireland have boasted stable bilateral relations. In the first 10 months of last year, Sino-UK trade in goods reached $71.14 billion, an increase of nearly eight per cent year-on-year. The cumulative Renminbi (RMB) clearing volume of London exceeded 40 trillion yuan, making the metropolis the second-largest offshore RMB clearing centre and the largest RMB offshore foreign exchange trading centre in the world. Also, the third-party market cooperation agreement has opened up new channels for Sino-UK Belt and Road Initiative cooperation. The two-way investment between China and the Republic of Ireland has reached $2 billion, and the total annual trade volume has hit nearly $15 billion.

To sum up, in spite of Brexit, which has brought new challenges both in and outside of EU, the UK and EU are both so far coming closer to emerging economies. China and the EU are strengthening joint responses to new issues raised by the current situation. The opportunities for the development of bilateral relations still outweigh the challenges.

Yet how the transition period of Brexit plays out is still being closely watched, with many countries in Asia hoping will move smoothly. The Chinese government actively promotes cooperation with the EU, the UK and the Republic of Ireland, share anti-pandemic methods to resolve difficulties, restore economic exchanges and mutual learning under the guidance of building a community of shared future for mankind.

All sides have obvious common interests for the continuous European stability and prosperity. As long as all parties concerned work together to build an international relationship of mutual respect, fairness and justice, and win-win cooperation, the brighter prospects are surely there in store.

Yue Xiaoyong is the former Chinese ambassador to Ireland, and a senior researcher at and director of Global Study Center of the National Academy of Development, Renmin University of China.

CHINA DAILY/ASIA NEWS NETWORK

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