The whole world is eager to know the result of Brexit poll on Thursday. The result could have far economic consequences for the EU and the rest of the world. The greater consequences are more subtle, gradual, and global.
Brexit would be the postwar of decades against global integration. This consensus is boosting protectionism and anti-immigrant world-wide. The uncertainties would slow down global growth clouded by aging populations and inefficient productivity.
Although the supporters on Brexit say EU integration improves the incomes only for elites, every skilled worker is also a consumer and, therefore, benefits the whole British economy by making products better and cheaper to compete in the world market.
As for the immigration policy, it’s probably a plus as well. EU immigrants to Britain are better educated and diligent compared to UK-born workers, and immigrants normally pay more in taxes than they receive in benefits, according to The Center for Economic Performance at the London School of Economics.
However, there are real costs. Gradually closing the borders will chip away Britain’s long-term growth path. Also, if there is no serious short-term negative impacts from Brexit, it might energize anti-EU politicians in other countries, such as France and the Netherlands who have benefited the fear of the public about immigration.
As for the impacts on the U.S., there could be a stagnation in the process of a trading deal. The deal is in the process with all of Europe known as the Transatlantic Trade and Investment Partnership. Brexit would lead to launching a separate treaty between the U.K. and the America. England is America’s seventh top trading partner in the year to date, adding up to 3.1 percent of total trade.
On the other hand, The International Money Fund forecasted that in the worst case, Brexit could cut growth by up to 5.6 percent in the sort-term economic growth.