What does Brexit mean for the Gulf?

Published July 14th, 2016 - 09:54 GMT
There will be obviously many important ramifications for the Brexit decision. But how will it affect GCC-UK relations? (Twitter)
There will be obviously many important ramifications for the Brexit decision. But how will it affect GCC-UK relations? (Twitter)

London is abuzz with speculation about effects of the UK's decision to leave the European Union (Brexit), but the choice this week of Theresa May to become Britain's next prime minister starting Wednesday (13 July) has injected some calm and quiet into those discussions.

Ms. May is the current home secretary and was a Brexit opponent, but will now be in charge of negotiating the terms of Britain's departure from the EU. She quashed speculations about a second referendum, indicating that "Brexit means Brexit."
On June 23, Britons voted, by a 52 percent to 48 percent margin, to leave the EU, after 43 years of uneasy membership. The vote surprised many and chaos ensued as political leaders from both camps summarily dropped out, including Prime Minister Cameron, former London Mayor Boris Johnson, and right-wing leader Nigel Farage.

Prime Minister David Cameron had unleashed a torrent of anxiety and trepidation when he announced his sudden resignation following the Brexit referendum on June 23, suggesting that choosing his successor could take months, and declined to trigger Article 50 of the EU treaty.

Despite the fact that actual exit could take years, markets reacted dramatically. As did ordinary citizens. Referendum results indicated voters in London, Scotland, and Northern Ireland had chosen to remain in the EU. Young people in particular felt that their choices were being limited by the vote, because Brexit would reduce their opportunities in traveling, residing and working in other EU countries. Under EU single market rules, Britons enjoy national treatment in all EU countries, as do British exports of goods and services.

On the other hand, statements by Philip Hammond, the current foreign secretary and May's close ally, have restored some realism. Hammond has stressed the difficulties of leaving the European Union, saying that a Brexit agreement could take a long time: "If a future treaty between the UK and the EU-27 is deemed to be a mixed competence, it will have to be ratified by 27 national parliaments. I think I am right in saying the shortest time in which that has been done in any EU treaty is just under four years, and that is after taking into account the time it has taken to negotiate," Hammond told Parliament on Tuesday (July 12).

Hammond also pointed out that negotiating trade agreements with other countries may be difficult: "Until we have served an Article 50 notice, we remain a full, participating member of the EU and our ability to negotiate new trade agreements is restricted by the continued application of EU law until we have negotiated our exit from the EU," Hammond told British MPs. "We have to tread a careful path having any preliminary negotiations but remain on the right side of our international obligations," Hammond said.

There will be obviously many important ramifications for the Brexit decision. But how will it affect GCC-UK relations? Could Britain regain its role in the region, which declined gradually after it left the region in 1971, and especially after it joined the EU in 1973?
Since coming to power in 2010, Conservatives have expressed muted frustration that EU policies toward the GCC and other regions did not always take into full consideration Britain's interests and historical relations with those regions. As such, Brexit could mean a more active foreign policy; Britain would be able to pursue its "Gulf Initiative," which it adopted in 2010, but never fully implemented. It could also more aggressively pursue its "Gulf Strategy," it adopted in November 2015, with important economic, political and security implications for the region.

Depending on the terms yet to be negotiated with the EU, Britain would probably seek to cement new and old partnerships with the GCC and other regions and countries. There were reports this week that the UK was already in "preliminary" trade talks with India, and was discussing possible post-Brexit deals with China, South Korea, Japan, and of course the United States. While FTAs are now far off, other trade deals are possible with the GCC and other partners.

Similarly, Brexit could energize British presence in the region and lead to greater GCC-UK security and political cooperation. There is currently limited coordination with the EU on those matters and EU influence in the region is waning dramatically, despite Europe's great interest in fighting terrorism and stemming the flow of refugees from the region. Brexit could marginalize the EU further, as the UK has been among the most active EU members pushing for greater EU regional engagement.

By Abdel Aziz Aluwaisheg

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