BREXIT – An Israeli perspective

By Garry Shaw

Money markets crashed as if some disaster had occurred. But what was seen by the unexpected “Leave the EU” vote is the beginning collapse of the EU, an unelected world of bureaucrats who regulate and control the lives of people in Europe.

At the moment the Brits were voting, I was having lunch with a group of Dutch men and women. They expressed their disgust about what is happening in their country and how the decision of their government is controlled by the gnomes of Brussels. They were adamant that their country would be better off away from the EU decision-makers who, they felt, were endangering the social fabric and security of their country over a wrong-headed immigration policy, a policy in chaos with the continuing wave of migrants washing on the shores of Europe from the Middle East and Africa. Many are finding their way to the Netherlands. They are frustrated with the feeling of losing control their country. Nationalism is being revived due to the utter failure of Europe to deal with the dual threats of the migrant crisis and the explosion of Islamic terror.

People are fearful and want out. This was clearly seen in the Brexit vote.

The economy and jobs are vitally important issues as Brits ponder their future outside of the EU. They can be reassured. Norway and Switzerland are two countries who have successful economies and are outside the European Union.

Britain is the second largest economic engine in Europe after Germany. It is an almost three trillion dollar powerhouse. It is hardly a weak horse as is Greece.

The biggest card played by the “Leave” campaigners was that Britain can regain its sovereignty and independence of decision-making and begin to control its own destiny. This confidence is essential at such a crucial time.

Britain will now be able to make free-trade deals with massive trading blocs such as America, China and India, something it was unable to do as part of the restrictions of EU membership. This will be a powerful kick starter to the British economy and jobs. Let’s be honest, Britain-made goods admired and required within Europe will still be in demand by nations within the EU.

Britain can follow the Swiss example. China has a trade agreement with wealthy Switzerland, a country that is European but outside the EU. China does not have a free-trade agreement with the EU. Like Israel, Britain should look eastward.

Israel, a non-EU country, has an Israel-EU Associate Agreement in force since June 2000. It began with services and the free movement of capital. It didn’t take long for this agreement to expand to include the free trade of industrial and later agricultural products. More recently the demand for Israeli technology led to Israel being invited into the Horizon 2020 program of research and innovation in 2014. This has led to a thirty two billion Euro trade in goods between the EU and Israel at the end of 2015.

Outside of Europe, Israel’s trade volume with the United States reached thirty eight billion dollars by the end of 2014.

China did not establish diplomatic relations with Israel until 1992. Trade was almost non-existent at that time, barely fifty million dollars. It has leapt in the last decade to reach over ten billion dollars by 2013, and growing fast. Today, Chinese businessman and government officials are constantly visiting Israel in search of partnerships and future trade agreements.

This is the rosy picture that can be Britain’s as it recaptures its independence of action. Surely, British entrepreneurs and innovators are as talented as ours – well, almost.

As for crashing markets, buy shares in British banks and industry, or buy more of your favorite stocks. You’ll make money when the markets bounce back.

Barry Shaw is the Senior Associate for Public Diplomacy at the Israel Institute for Strategic Affairs.