Hi, A recent business issue that occurred is the

Hi,
my name is Festus Junior. I’m a business & management student currently in
my final year. The aim of this presentation is to give the reader an insight on
the potential negative effect Brexit could have on the United Kingdom (hereinafter
known as the UK) and our economy. I do understand that Brexit is broad topic,
so I have decided to expatiate and analyse the negative impact it would have on
the trade segment. In this case I have also implemented the trade issue between Tesco and Unilever to
reinforce the importance of the agreement.

23rd
of June 2016 was the day the United Kingdom voted to leave the European Union,
with more than 50 % of the population voting to leave the EU. The government
was predominately for the remain battle. Notwithstanding, it enabled senior
individuals from the committee to battle for the leave side, giving them the
chance to impact individuals from the general population. According to
researcher (K. Swales) this idea to leave the European Union was not primarily
due to the demographics but rather due to matters of identity.

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The
trade aspect is quite vital as it has a significant impact on economic growth.
In the study of (Noguer and Siscart, 2005) it was suggested that “Even if
geography affects income through non-trade channels, a geographically
constructed instrument can still constitute a valid instrument for trade as long
as the empirical equation is properly specified to control for all possible
links between geography and income”. Research has indicated that companies are
worried that Brexit will have a knock-on effect on trade. The UK has huge
trading partnerships with powerful members of the EU such as Germany and
France, this is reinforced in (Appendix A. A recent business issue that
occurred is the trading relationship between the UK and Ireland. “The UK has a
£7bn surplus in trade with Ireland; £25.7bn, or 5pc, of UK exports go to
Ireland.” (thetelegraph.2017). If the agreement isn’t made the UK economy would
take a financial loss.

The
quantitative trade model can be utilized to compute the degree in which the
UK’s exchange and expectations for everyday comforts will be influenced by
Brexit. Quantitative trade model incorporates the manner by which exchange
influences the consumer, the firm and specialists; giving mapping from exchange
information to welfare. The model gives measurements on the adjustments in
genuine wage under various arrangements utilizing information from exchange
volumes and potential exchange hindrances. It empowers exchange both middle of
the road input and the last yield for merchandise and enterprises. Quantitative
trade anticipates the impacts of Brexit on the UK’s exchange with the EU and
the rest.

“Despite the promise that cross-border trade will be unaffected, Irish beef
exporters remain concerned that the UK might yet seek to enforce different food
safety and animal health rules to those of the EU.” (FT.com,2017) Although
Theresa may has suggested that the cross border trade will not be, the
exporters are not fully convinced. In addition, there are a various measure of
reasons why exchange expenses may increase after Brexit, reasons such as,
higher tax obstructions between the UK and the EU and higher non-duty
boundaries to exchange that are emerging from various directions, border controls,
between the UK and the EU. A recent article form the guardian suggested that if
Brexit occurs, the UK will need a new trade deal with the European Union
(Milmo, 2016). This clearly indicates the importance of Brexit, regardless if
the current business issue between the UK and Ireland gets sorted, will there
be another drastic turn? (Emmerson, Johnson and Mitchell, 2016) suggested that the
UK would have less to offer nations in connection to access to its own market.
Nonetheless, so there is a probability that with the UK being a solitary nation
they will have less trouble achieving bargains.

 

A
similar situation that occurred was the dispute between Tesco and Unilever. Although
Tesco and Unilever recently came to an agreement on their price dispute, Brexit
caused a scare within the company. As the pound faced a downturn Unilever
wanted Tesco to pay more for the products. Both parties benefited from this
dispute however it caused more damage than gain. Tesco profited from this
potential divider as it enabled them to construct new associations with
potential providers who might be less expensive. The risk of this is can be
exceptionally costly to change providers, so keeping in mind the end goal to do
as such Tesco need to ensure they are in the money related position to do as
such. Tesco took a loss during this dispute, this reinforces the negative
impact Brexit has on companies and how it is a business issue. Tesco is one of
the top leading competitors in its sector, but yet could not meet the expense
of stocking Unilever’s items should they increase their costs as they require
however much deals as could be expected because of the economic challenges.

 

 

Finally
it is realized that the future of Europe and the EU still stays dubious about
what will happen post-Brexit. It’s advised that they make fundamental move that
will profit the two gatherings over the long haul. It will also be a smart
thought to think about the SWOT analyses (See Appendix B) as it will enable
them to see whether if the choice to leave is correct or wrong in light of a
reasonable examination.

In
conclusion, the primary objective of this presentation was to distinguish any
financial impacts actuated by BrexIt in both the U.K and inside Europe. This
presentation signifies that in spite of the fact that the UK might be more
grounded when it is out of the EU there are still a few constraints, similarly
with the EU. As said above, Brexit has much more serious impacts on the UK
economy that it has in Europe. To embody, foreign direct investments is vital
to a nations monetary development and can likewise help to a nations existing
specialized process. Furthermore, it can likewise enhance the nation’s
intensity in the residential condition and diminish the rate of unemployment.