Export Potential of Turkey and MENA Countries after Brexit
In the aftermath of the Great Recession in 2008-09, the European economies were dramatically affected. The UK (United Kingdom) economy could not completely recover, and loss of employment soared. The unemployment rate increased from 5.26 percent in 2007 to around 8.04 in 2011, which is a remarkable change for a developed economy like the UK. Afterward, British citizens started to accuse migrant workers from the EU countries of stealing their jobs. At this point, it should be noted that, in the 2010s, an annual average of more than 100 thousand EU citizens migrated to the UK for work. Along with these developments, in 2013, David Cameron—the Conservative Prime Minister of the coalition government from 2010 to 2015—promised a referendum on leaving the European Union if his party wins the election in 2015. When the Conservative Party won the election in 2015 and took office with no coalition partners, the referendum was held on 23 June 2016, which resulted in 51.9 percent of the votes in favor of leaving the EU.
After the referendum and following the negotiation period with the EU, the UK officially left the European Union, a process known as “Brexit”, on 31 January 2020. The name “Brexit” comes from the combination of two words: Britain and exit. Note that Britain–referring to Great Britain–and the UK are used interchangeably in the Brexit literature, however, there is a difference between these two specifications. Britain encompasses the geographical areas of England, Scotland and Wales, whereas The UK includes Northern Ireland in addition to Britain. There is also the term British Isles, which refers to all the areas belonging to the UK and the Republic of Ireland.
Following the exit, many countries have stressed the possible impacts the exit would have on their economies. Even if the UK and the EU sign a free trade agreement that abolishes taxes or customs duties, the trade volume will be affected negatively. That is because the EU countries will be required from now on to do some extra paperwork to be able to import from or export to the UK. For some goods, exporters will need to get some special licenses and certificates. Before Brexit, international trade between the EU and the UK had been like a domestic trade without any bureaucracy, which has come to an end. Also, the free trade agreement does not prevent either side from imposing tariffs on imported goods in the future. In addition, labor mobility will be limited because of the visa requirements for the citizens traveling between the EU and the UK. Therefore, the coming period poses many threats to the relations between European and British economies.