Europe
is in shock as Britain pulled out of the European Union in what is now termed
as “Brexit”[1].
The EU is a union of 28 countries formed straight after the conclusion of the 2nd
World War.
Britain is important to EU
because it is its second largest economy and the world’s fifth largest economy.
Thus her exit is now raising fears among European Union leaders that a domino
effect could follow suit. Questions are now being asked if the EU will survive
the Brexit. There are evidences on the ground indicating that “Nationalists” in
various countries are now pushing for their country’s exit from the EU. Yet one
could argue that this is abit premature given Britain and the EU have not
yet seen the full extent of the outcome of Brexit. Already almost 3 million
Britons have petition the government to revoke this decision. This looks likely
to force an urgent parliament sitting to address these developments.
More
importantly for UK, Britain’s decision to leave EU is already raising questions
of independence for Scotland and other UK countries. Each of these UK countries are already left with a
difficult task of deciding their own future – whether to stay with EU or break-away
and rejoin Britain to maintain United Kingdom. So Britain’s exit could quickly
lead to other important developments that could re-shape Europe’s future now
and into the future.
While
the pro-EU are in tears; the eurosceptics who have longed seen the union as
repressive and wants their country to choose their own destiny are revering in
their victory[2].
Under EU all the member countries are to comply to its laws which unfortunately
may not necessarily be in the best interest of all the member states. The
recent attack in Belgium and France orchestrated by the Islamic fundamentals or
extremist groups however have only added to the eurosceptics’ arsenal. More and
more people in Europe have demanded that their own government take a tougher
stance against migration. Britain’s exit is eurosecptics’s finest hour and
their call for protecting national borders is echoing through the corridors of
Europe.
The
Brexit is sure to create a ripple effect across the world. Already the value of
stocks on the stock markets including the Pounds has seen a significant drop. For
the Pacific the result is sure to hit our shores much sooner than we expected.
PNG and the Pacific
In
2007 EU concluded an Interim Partnership between PNG and Fiji which was
ratified by the EU and PNG Parliament in 2001 and Fiji in 2014. This paved the way
for its eventual implementation.
The EU is currently negotiating a comprehensive Economic
Partnership Agreement with all fourteen countries of the region (Cook Islands,
Fiji, Kiribati, the Marshall Islands, Micronesia, Nauru, Niue, Palau, Papua New
Guinea, Samoa, the Solomon Islands, Tonga, Tuvalu and Vanuatu). The
comprehensive agreement would cover trade in goods, trade in services,
development co-operation and trade-related issues like food health and safety
issues, technical barriers to trade, agriculture, sustainable development and competition[3].
The
Brexit case looks certain to put a halt on this negotiation. Right now the main
focus will be on forging a way forward post Brexit. Britain for its part is
going to have to negotiate an exit strategy with EU in light of its decision. Given
its status; the pull out of Britain in the EU no doubt will mean a substantial
lessening in financial support to EU. In addition most parts of Europe are
still struggling economically and may not be able to step up to fill in the
void left by Britain. This could potentially mean a renegotiation of the terms
of the EPA. The interim Agreement provides PNG duty free access into Britain
and European Markets – right now a much needed entry into the international
market. A renegotiation may well turn this around and could affect PNG’s
economy – more specifically its foreign reserves[4].
This will spell disaster for PNG given its current economic condition where problems
in the foreign reserves have forced the government to seek financial
arrangement with other countries.
EU like set-up in the
Pacific?
The
decision by Britain to hold a referendum to decide its future in the EU has
brought to the forefront this important question of whether the Pacific could
emulate a similar set-up. There is merit for such a set-up to facilitate trade
and labour migration – an issue that has recently gained recognition. There is
also a need to establish a common security policy to address terrorism, illegal
fishing, trans-national crimes, human smuggling and protecting borders. Most
Pacific Island nations have a small military to protect its borders or EEZ. For
the MSG it needs a common voice to address “West Papua’s” push for independence
against Indonesia. Unlike Europe the Pacific are too small and have limited
resources to be able to stand up individually to negotiate trade and security
issues. Through such a set-up big and powerful Pacific Island Countries like
PNG can be able to support a bail-out system to bail-out economically depressed
countries of the region.
Adding
on this like the EU Pacific Islands under this set-up could explore the option
of introducing one common currency. However, as we have seen with the Greek
crisis such an option is not viable at present in the Pacific which is prone to
global market shocks.
Nevertheless,
in a region where tourism and trade (both raw materials and labour) is
important having a common currency will ease payments for trade and reduce
transaction costs to boost tourism.
In
addition, scattered by the Pacific Ocean most countries of the Pacific are
often prone to isolationism. This means that internally most island nations especially
those of the MSG have suffered from poor governance which has often contributed
to political instability. An EU like set-up will ensure that all nations
conform to a unified law that will minimize such turbulence. This will further
curb the emergence or rise of dictatorship as the unified parliament can
over-ride the decision of a national parliament on the grounds of human rights
or democracy in general.
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