The Brexit clock and Asia

The Brexit clock and Asia

Britain has pulled the Brexit trigger but will it score a bullseye for prosperous sovereignty or commit economic suicide by leaving the European Union? In either case, as Prime Minister Theresa May declared last week after invoking Article 50 of the Lisbon Treaty: "This is a historic moment from which there can be no turning back."

While some maintain that Article 50 is vague because it does not say whether a decision to leave can be revoked afterward, the UK government has made up its mind. The country will officially leave the EU no later than March 2019, unless all 27 countries in the union agree to an extension. If not, EU treaties will cease to apply to the UK after that.

"We are in the post-Brexit world, I suppose. All kinds of surprises can be expected and I think there will be some uncertainty around the two-year timeframe in which various negotiations can be concluded," says Gary Seib, Asia Pacific chair at the international law firm Baker McKenzie.

"There is a tall order around the Brexit negotiations and then ... with trade agreement negotiations. Will they be with blocs? Will they be bilateral? We hear different expectations being expressed almost daily but I would think, from a British point of view, that ultimately there will be a strong incentive to try to work with blocs and try to make the arrangements as uniform as possible. But that might be easier said than done."

Most of the focus post-Brexit will be on what kind of trade arrangement Britain can secure with the remaining EU members. Will it be multilateral or a series of bilateral deals? As for the United States, London can take heart from President Donald Trump's preference for bilateral deals, but in any case trade pacts take years to finalise.

Closer to home, how will Britain approach Asean? Southeast Asia has achieved economic integration to some degree but an EU-style single market is not on the cards. In that case, it is safe to assume that the UK will choose to negotiate with Asean member countries individually.

"Will there be an Asean arrangement? That remains to be seen but in terms of countries, if one is to follow the money, where will the priorities be? I expect for the UK it will be Europe, possibly the US, possibly China, but then Britain has also identified opportunities outside of the primary trading channels," says Mr Seib.

According to the Asean Secretariat, bilateral trade between the EU and Asean in 2015 amounted to US$227.64 billion -- around 10% of Asean's total trade -- including exports worth $127.6 billion. The EU is Asean's third largest trading partner after China and Japan and ahead of the US and South Korea.

The UK did not make the top 10 but Asean is the country's eighth-biggest export market, worth $17.4 billion in 2015, more than twice the value of UK shipments to India. More than 3,000 British businesses now operate in the region.

The diplomatic relationship between the UK and Asean is quite a meaningful one. Under the premiership of David Cameron, the country signed a number of agreements such as the Vietnam-UK Strategic Partnership and the Treaty of Amity and Association with Asean. It became a strategic partner of Indonesia and also reestablished diplomatic relations with Laos. The UK was the prime mover behind the move to lift EU trade sanctions against Myanmar in 2013. Suffice to say, the role of the UK in Asean goes beyond commerce. An Oxford Analytica report last year described the UK as "vital to the EU's political, diplomatic and humanitarian aims in the region".

This is where Brexit could bite, as Britain is a major financial supporter for EU development missions in this part of the world. The UK Department for International Development (DFID) has provided $146 million in 2016-17 to help fund 25 EU development projects for Southeast Asia -- 18 in Myanmar and the rest in Cambodia, Laos, Myanmar, the Philippines and Indonesia. What will be the fate of these missions in the post-Brexit era?

So while trade negotiations may dominate the post-Brexit world, we need to take a closer look at other areas where the economic and social well-being of people around the world could be affected if the UK-EU relationship changes.

Should Asean's priority be the EU or UK? Trade statistics suggest it may be wiser to stick with the EU for now. Individual countries will have to fend for themselves.

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