Changing Business for Increasing Globalization - myassignmenthelp

Question: Explain why this is so, and discuss the implications. Answer: Introduction On 23rd June, Thursday 2016, people of Britain decided to leave EU (European Union) and this departure of Britain from the UK is termed as Brexit. The result of Brexit, the value of pound fell at its lowest level and Prime Minister of Britain Cameron resigned from his post. Britain is now busy with the rights of EU citizens, Brexit bill and Irish border. Britain wanted the end of the supremacy of EU over the UK. However, it has impacted some negative impact on the UK and the rest of the world also. Amidst the hullaballoo, the international trade and idea of globalisation have faced the major challenges. In this essay, the post-Brexit impact on globalisation and trade will be evaluated through examples and secondary data sources. This essay aims to highlight the post-Brexit assumptions on globalisation and trade that are questionable state right now. Concept of Brexit on Global Economy In the UK, the Brexit victory brought to the UK the loss of its top position in the AAA credit rating on the June month in 2016. Significantly, the UK had to cut off the interest rate in order to prevent the recession in the UK. The economy of the UK slipped to degrade as the marketers got afraid for trade agreements of EU after the UK would leave the EU. The interest rate was the record low at 0.25% and policy makers feared that disruptive economic fallout might happen (Dhingra et al. 2014). Now, PM Mrs May wants that Britain must leave the EU as it is a single market. It is needed that EU's free movement should be stopped. Not only in the UK, but this also impacted on global economy also. The financial market of macroeconomic can put consequences on sustained rise of US dollars' value as Euro is getting ahead. Manufacturing industry will shine and this may put extra pressure on US economy. It is clear that most of the economic transaction used to happen in the epicentre of EU that is Britain. When this bonding will break, the capital will be shifted to Asian countries and to U.S. This may lower the interest rates and may decrease the currency values in the European nations. EU and U.S are two largest exporters in the world, in case of leaving the UK from EU, value of US dollars will get high (Nousios et al. 2016). This incident may scare the China in increasing value of Yuan. European Central Bank will be at risk to cover the risk of premium in Eurozone (Nunez-Ferrer Rinaldi 2016). Most importantly, Italy will face pressure as each blow of the Brexit will impact on the countries of EU. Global growth of economy has not been meeting the forecast since 2014. Last year this growth was sluggish the most for U.S recession, Brexit and selection of the president of Donald Trump. In the year the growth of world economy was 2.7% and in the last year of 2016, this growth was lowest of 2.7%. However, in case of the UK, the forecast for the economic growth of the UK would be lower; moreover, the UK economic performance was higher than expectation. World Bank expects that the world economic growth will expand by 1.3% by the year 2017 as it was predicted 2.8% before the Brexit occurrence. As stated by Portes Forte (2017), when the UK starts to leave the EU regulation, EU will automatically start to gain customers' confidence and European countries will be flourishing in economic context. In addition, the global economy has been fragile since 2008-2009. Policymakers are providing a few monetary policies and in this situation, Brexit pushed it further in terms of global slowdown of economy and recession. Impact of Brexit on Globalisation Key principles of recent concept of globalisation are included immigration policy and trade. Brexit can play as pullback to the labour movement, trade openness and globalisation. However, supporters of UKs Brexit pointed out the EU's immigration law and that helps to come more refugees. The influx of refugees to a country reduces the job prospects and it plays the role to economic block. UKs Brexit is a protest against the economic model of EU that has been prevalent for past three years. As employment issue is at stake in most of the Eurozone countries, they support the anti-globalisation concept. Brexit impacts on Austria and Freedom Party of Austria creates the boundary on immigration policy (Wadsworth et al. 2016). The Same scenario is seen in case of Donald Trump as he won the election by supporting blue collared white Americans' dream. In this regard, the concept of anti-globalisation sentiment pours into the UK and other European countries. As of now, China has been the most g ainer from globalisation through configuring the perfect set of growth engine. In addition, EU was born from the result of two world wars and it made the single market and one political union of 28 countries to make an integration of strong economic and social condition. Globalisation was observed from the western political leaders perspectives; however, individuals now understand the true impact of it (Irwin, 2016). Major borders of the European countries are closed now and all the countries who are economically developed believe in protectionism (Mendez-Parra et al. 2016). Most of the Europeans now believe that globalisation has given the advantages to the elite class, not the common people. The common people think that they should not pay if the banks fall and the people want the security of nations economy. Globalisation curbs the freedom of the people of their own country and employment posts are not created. Global market economy most of the time alters with the political decisions and the governments should imply the flexible globalised economy. Common people are saying no' to the globalised economy as voters are throwing legitimate grievances to the economic system. The negative steps of growing realisation make one thing clear that in globalisation most of the times advantages go to the corporations, wealthy families and educated workers as they can access the capital easily (Wright, 201 6). The maximum population of nations face issue for stagnant wages, staggering debt and job losses. Income of the people lowers as the globalisation embraces the country and free trade alleviates this. EU's ability would now be checked as EU could stop the illegal migration from North Africa and the Middle East. UK's departure from EU will eventually make the EU to inward look of their procedures and regulations and it would be more defensive in case of globalisation. Impact of Brexit on Trade and Financial Services As opined by McCombie Thirlwall (2016), Britain thought itself to more of a contributor than the receiver in the EU. The UK gave 350 million pounds to the EU in each week and they wanted to expense the same in improving the country. European Union is taken for the world's largest trading zone and breaking relation to the EU may result to the hamper of international trade for the UK. Britain now needs to make other trade agreements of its own. In the previous occasion, RU made the trade agreement on behalf of the country involved in the agreement. EU made them a vow to sign the treaty as the country needs to make a fair trade following all rules and regulations (Wallstreetsurvivor.com, 2016). Now, breaking the relationship, The UK will not follow these rules. However, in case of the UK, investors will consider the UK as less attractive place to business as they will not be following fair trade agreement (Economics, 2016). As economic condition of Europe is now unstable and it would m ake the UK as a less preferred place to trade with as unfair trade agreement may occur. The UK cannot decide on tariffs which they levy on importing as before it was judged by EU and it was uniform for all countries. Now, the UK needs to apply tariffs which are set by the WTO. Under the EU, The UK had to follow common commercial policy as it would not allow the UK to negotiate over trade agreements. Now, the UK will be able to do the trade agreements with other people. The UK was the founder member of EFTA and the UK could join it as the UK was one of the largest exporters (Express.co.uk, 2017). EU treaties give the provision to make a treaty to the non-EU countries. In case of other members of the EU, Britain could make trade agreement and cooperation will be observed. EU also will not breach the treaty and EU will not influence the members to do so. Conclusion The global market has been facing the issue of market debt, the economic downturn and private sector debt. In this scenario, Brexit creates the historical reappraisal of risks in the political scenario. For European countries, Britain will face a potential loss in financial contexts. Britain has been facing issues in legal agreements of EU in making a trade. However, now Britain will be able to make trade with Asian countries. Some argued that the UK may lose the power in the global market as the non-fair agreement may impact on business. In globalisation context, Brexit creates has made impact on it as common people understood the globalisation brings a little sign on countries economy. Reference List Colantone, I. Stanig, P., (2016). Globalisation and Brexit.VoxEU, 1(1), 32-40 Control Risk (2017). Retrieved 4 September 2017, from https://www.controlrisks.com/en/our-thinking/analysis/the-global-implications-of-brexit Dhingra, S., Ottaviano, G., Sampson, T. Van Reenen, J., (2016). The impact of Brexit on foreign investment in the UK.BREXIT 2016, 1(1), 24. Economics, C., (2016). The economic impact of Brexit.study commissioned by Woodford Investment Management. 3(3), 23-30 Foster, A. 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