BREXIT, EU, JAI AND BIMSTEC-

IMPACT ON GLOBAL TRADE

PRESENTED BY:
DHRUV RAJPAL
COL.RAJAT SONDHI
AYUSH
PRASHANT
BREXIT
DEFINITION
• Brexit is an abbreviation for "British exit" referring to the UK's decision in a June 23, 2016 referendum to
leave the European Union (EU). The vote's result defied expectations and roiled global markets, causing the
British pound to fall to its lowest level against the dollar in 30 years. Prime Minister David Cameron, who
called the referendum and campaigned for Britain to remain in the EU, resigned the following month. Home
Secretary Theresa May replaced him as leader of the Conservative party and as Prime Minister. Following a
snap election on June 8, 2017, she remains Prime Minister. The Conservatives have lost their outright
majority in Parliament, though, and with it – May's critics argue – a mandate for a "hard Brexit" in which
Britain leaves the EU's single market and customs union. (Alternatives are known as "soft Brexit.")
NORTHEN IRISH BORDER
• For decades during the second half of the 20th century, violence between Protestants and Catholics marred
Northern Ireland, and the border between the British country and the Republic of Ireland to the south was
militarized. The 1998 Good Friday Agreement turned the border almost invisible, except for speed limit
signs, which switch from miles per hour in the north to kilometers per hour in the south.
• Both British and EU negotiators worry about the consequences of reinstating border controls, as Britain may
have to do in order to end freedom of movement from the EU. The Dec. 8, 2017 agreement reiterated the
UK's commitment to "the avoidance of a hard border, including any physical infrastructure or related checks
and controls." It also stressed "the integrity of [the UK's] internal market and Northern Ireland's place within
it, as the United Kingdom leaves the European Union's Internal Market and Customs Union."
IMPACT OF BREXIT ON BILATERAL UK
RELATIONS
• May presented the election as a chance for the Conservatives to solidify their mandate and strengthen their
negotiating position with Brussels. Having lost their majority, that position appears weaker. It remains
uncertain whether the new government will be able to stick to the Brexit goals it laid out in its manifesto:
cutting annual net immigration to the tens of thousands – from 248,000 in 2016 – and pursuing a "hard
Brexit," that is, leaving the EU's single market and customs union.
INTERNATIONAL AGREEMENTS
• The Financial Times said that there were approximately 759 international agreements, spanning 168 non-EU
countries, that the UK would no longer be a party to upon leaving the EU.[321] This figure does not include
World Trade Organization or United Nations opt-in accords, and excludes "narrow agreements", which may
also have to be renegotiated
• At first there was little hint that May's team had backed off its commitment to a hard Brexit, but an August
2016 position paper indicated that the UK would seek a close customs relationship with the EU.
FINANCIAL SETTLEMENT
• The "Brexit bill," or financial settlement the UK owes Brussels following its withdrawal, has been a major
point of contention for both sides. During the campaign, "Leave" supporters often cited the money that
British taxpayers pay into EU coffers, though the figure they used was inflated. A large financial settlement
would therefore rankle many Brexit supporters, some of whom believe the UK should refuse to pay anything.
EUROPEAN UNION(EU)
Background
• Countries agreed to participate as one unit in the global economy.
• It was formed in 1997 with 12 member countries.
• EU is currently a group of 28 member countries out of which 19 countries accept euro as their official
currency.
• It’s objective being freedom in movement of goods,services,people and money.
• Elimination of custom barriers,establish more efficient market place and creation of economic wealth.
• European central bank had to struggle with high sovereign debt for Portugal,Ireland,spain and Greece.
• Financial bailouts for fiscal prosperity was given to European countries in 2009.
• UK had a referendum to determine to remain a part of EU,voted to leave the EU in June 2016.
• The euro has mainted a competitive value against the US dollar €1: 1.13$.
• One of the worlds largest place for FDI.
INDIA AND EU: TRADE AND INVESTMENT
PARTNERS
• INDIA is currently the fastest growing economy.
• EU is india’s largest trading partner accounting for €85 billion in 2017.
• India is ahead of china(11.4%) and US(9.5%) by having a 13.5% of trade with EU.
• Trade between india and eu has almost doubled in the last decade.
• Eu’s share in foreign investment inflows to india has more than doubled from 8% to 18% in the last decade.
• EU FDI stocks in india accounted to €73 billion in 2016.
• Indian companies have invested over €50 billion in Europe since the year 2000.
BIMSTEC
Background
• The Bay of Bengal initiative for multi-sectoral technical and economic cooperation is a regional organization
comprising 7 member states lying in the adjacent areas of bay of Bengal.
• This sub-reigonal organization formed on 6th June 1997 through the Bengal decleration.
• It constitutes 7 member states: 5 from south asia including Bangladesh,Bhutan,india,nepal,srilanka and 2
from southeast asia Myanmar and Thailand.
• Initially,the economic bloc was formed with the acronym ‘BIST-EC’(Bangladesh,india,srilanka,Thailand
economic cooperation.
• Following inclusion of Myanmar on 22nd December 1997 during a special ministrial meeting in bangladesh,
BIMSTEC was formed.
OBJECTIVE
• Objective of building an alliance was to harness shared and accelerated growth through mutual cooperation
in different areas of common interests.
• BIMSTEC is a sector driven cooperative organization.
• Started with 6 sectors including trade,technology,energy,transport,it expanded to embrace 9 more sectors.
JAPAN-AMERICA-INDIA PARTNERSHIP(JAI)
Definition
• Using initials of each of the three nations,Prime Minister narendra modi coined the term “JAI” (Japan-
America-India), which in the Hindi means success or victory.
• The prime minister asked the members of the group to set up a mechanism to deny entry and safe havens to
fugitive economic offenders. He urged the the Financial Action Task Force to take action on the matter. It
would lead to timely and comprehensive exchange of information between the competent authorities and
financial intelligence units.
• Asia-Africa Growth Corridor – Counter to the Chinese OBOR
Two countries of JAI Partnership – India and Japan are working together on a game-changing Asia-Africa
Growth Corridor (AAGC) which is seen as a counter to China’s One Belt and One Road Initiative (OBOR)
initiative. China is so rattled by this plan that one of its leading news agencies called it a ‘division plan’.
CONCLUSION
• In most of his foreign visits, Prime Minister Narendra Modi brings back significant achievements to the
nation. But this first-ever meeting of the ‘JAI Trilateral’ at G-20 Summit and the official beginning of this
trilateral is a paradigm shift in India’s foreign policy vision. The future cooperation between India, Japan and
USA will further the cause of mutual prosperity and peace. Interestingly, their present engagements with
each other as explained above lays a strong base for the development of futuristic new partnerships.