Using this passage below to answer the two questions in the attached image.Brexit and the EU "Brexit" is a shorthand term that combines the words "Britain" and "exit" and refers to the process of the United Kingdom leaving the EU.76 The following section discusses how Brexit works and how it affects the EU and Canada. What Is Brexit? In 2016, by way of referendum, the United Kingdom voted to leave the EU. After the UK triggered Article 50 of the Lisbon Treaty, which sets out how an EU country may voluntarily leave the union, the European Commission and the UK started the arduous task of negotiating how to undo decades of integration. In October 2019, the EU and the UK approved a revised withdrawal agreement and a political declaration on future EU - UK relations. The Withdrawal Agreement is limited in scope, covering only a 12-month transition period during which the UK and the EU will negotiate a new trade relationship, how much money the UK owes the EU for leaving, and what happens to UK citizens living in the EU and EU citizens living in the UK. It also sets out a method of avoiding the return of a physical Northern Ireland border. The UK Parliament ratified the Withdrawal Agreement. The transition period allows the UK and the EU to renegotiate thousands of regulations that govern trade, investment, security, immigration, and other matters that are currently imbedded in the EU framework. During the transition period, all EU laws would still apply, which will allow businesses and governments to adjust to the legislative, economic, and social changes that the exit will bring once the new legislative and regulatory changes are implemented. However, the UK may also depart without a deal at the end of the transition period ending in December 2020, which would mean leaving without formal arrangements in place for the future relationship between the EU and the UK and immediate termination of the application of all EU regulations as they concern the UK. A no-deal Brexit could lead to significant disruptions: ? border checks could be reintroduced, ? transport and trade between the UK and the EU could be severely affected, ? adults may not be able to drive in EU countries without a special driving permit, and ? it could cost more money for British residents travelling in the EU to use a cell phone in EU countries. [2020) Emond Montgomery Publications. All Rights Reserved. Chapter 4 The European Union and Other Regional Trade Arrangements 11 9 Business Implications of Brexit There are over 80,000 pages of agreements between the EU and the UK. Untangling and renegotiating these agreements is a costly and uncertain process and affects businesses in countless ways. This section highlights some business implications of Brexit. Business thrives when the legislative framework is favourable and stable. Businesses are still unsure what Brexit will mean for market access, the availability of migrant labour, and product regulation. This uncertainty has caused a reduction in investment and employment growth because businesses are reluctant to expand.77 The UK's own long-term economic assessment illustrates a decrease in GDP in the event of a deal or no-deal Brexit scenario.78 Almost half of all the UK's overseas investment comes from the EU, as does a similar proportion of its export revenues. Brexit invariably affects both the long- and short-term business and investment decisions of UK-based foreign companies. Many companies, such as Panasonic, Honda, Discovery Channel, Sony, and others, are moving their European headquarters from the UK to mainland Europe to minimize the potential disruption Brexit may cause to their operations in the EU.79 Upon leaving the EU, the UK would no longer benefit from the single market and would have to renegotiate new trade and investment agreements with the EU. Should the UK exit the EU without a transition period, it will trade on the MFN basis under WTO laws. This will mean millions of tariffs and other duties will apply to UK products entering the EU. Additionally, the UK, as part of the EU, benefits from the EU's free trade agreements worldwide. Upon leaving the EU, if the UK wishes to continue trading on a preferential basis with countries like Canada, Japan, and Chile, it will have to negotiate its own free trade agreements with these partners. UK businesses will likely lose the advantage afforded by the preferential trading terms of the EU's existing trade agreements, and UK products will likely be less competitive abroad. Reasons for Brexit There are numerous complex reasons behind the UK's decision to leave the EU. The integration process within the EU has had both positive and negative impacts on people in the EU and the UK. The positive features are often taken for granted, while the negative aspects are highlighted and produce a strong, visceral reaction in many EU citizens. For instance, the benefits of open borders when they travel and of being able to enjoy cheap cell phone services within the EU are seen as a simple convenience. Others may have seen the market integration and increase in competition eliminate their jobs and lay the blame at the feet of the EU. The negative aspects of long- and short-term migration into the UK, Eurozone instability, and inefficiencies due to the organizational structure of the EU are among the chief reasons cited for supporting Brexit. Many Brexiteers feel that the UK is better suited to tailor laws and regulations that address modern problems on their own rather than in a multilateral setting that cedes a lot of their sovereignty to the EU. The inability of the EU institutions to address political debate and transparently address the trade-offs that exist in working together also led to growing discontent in the UK and other EU member states. Despite economic growth and development and improved security and environmental protection, there is a rise of populist and protectionist trends in the EU. The continued success of the EU will depend on its institutional ability to change and address the concerns of the member states.

Forwarded What are the reasons for Brexit? 23:49 Forwarded What problems may UK export businesses face I. The future? 23.19 //