How Brexit will affect the Caribbean

By W. Andy Knight
By W. Andy Knight

On 23 June 2016, the British people voted in favour of leaving the European Union (EU). The referendum vote was a close one – 52 per cent  to 48 per cent. A recent poll in the United Kingdom has indicated that there has been some buyer’s remorse. About seven per cent of those who voted in favour of exiting the EU (the leavers) expressed in that poll that they now regret the way they voted. But it might be too late to reverse the referendum result.

Already, the 27 member states of the EU (28 minus Britain) have indicated that they would like the UK to immediately trigger the divorce proceeding by activating Article 50 of the Lisbon Treaty, which gives member states the explicit legal right to leave the EU. Why? Clearly, the Brexit referendum outcome has caused major uncertainty in the global market. It is wreaking havoc not only with the British Sterling but also with the Euro. And, it has the potential to cause a domino effect across the EU as right wing and xenophobic forces in several EU countries now feel embolden to push their governments to bring forward a  similar referendum aimed at getting their countries to leave the EU.


So we have to assume that despite calls for a second referendum to reverse the Brexit decision, the new British Prime Minister will have no choice but to respect the outcome of the Brexit vote and lead his or her country out of the EU. The process of extricating the UK might take about two years. And there is no question that Britain’s exit from the EU  will have major negative implications for the Caribbean. Here I explore at least six possible negative implications.

First, the economic partnership between the EU and the Anglo-Caribbean could be seriously undermined, primarily because that relationship has historically been built largely through the efforts of the U.K. So, for example, it is logical to expect that preferential deals by the EU, with respect to trade and commercial interests which the UK was able to negotiate on behalf of the Caribbean, will now have to be revisited by the EU. Although, the EU may retain those preferential treatments, there is no guarantee that this will be the case. Most of the 27 remaining member-countries of the EU really have very little in the way of a relationship with the English-speaking Caribbean. So not having Britain present in Brussels to argue on their behalf might work to the detriment of the Caribbean countries, should those trade and commercial preferential deals be renegotiated.

Second, the Economic Partnership Agreements (EPAs), negotiated between the African, Caribbean and Pacific (ACP) countries/regions and the EU will have to be renegotiated once Britain leaves the EU. The EPAs are development-focused trade agreements that gives countries in the ACP an advantage in the Economic Partnership with the EU. They are technically reciprocal trade arrangements, but they are asymmetric in the sense that the EU, as a single regional bloc,  allows the ACP countries full duty free and quota free market access to the EU,  while the 49 ACP countries commit to opening up only 80 per cent of  their markets to the EU. It is highly doubtful, now with Britain out of the way, that the EU would want to continue its asymmetric relationship.

      Third, many of the trade deals that were worked out between CARIFORUM (a sub-group of the ACP that comprises the 15 Caribbean Community states, along with the Dominican Republic) and the EU including  Britain (as a member of the EU) would also have to be renegotiated once Britain exits the EU. The EU is CARIFORUM’s second largest trade partner, after the US. In 2015 that partnership had conducted $1.1 trillion worth of trade. While the remaining members of the EU might like to maintain this trade relationship with CARIFORUM, technically the trade arrangements would have to be revised to exclude Britain.

Fourth, the European financial and development assistance fund to which Britain had contributed, will be significantly reduced, once Britain leaves the EU. That fund is the main source of concessionary grant funding for the Caribbean region. It helps to stimulate economic development, social and human development, regional cooperation and integration in the Caribbean (as well as in Africa and the Pacific). Unless Britain develops a similar fund specifically for the Caribbean region, once it leaves the EU arrangement, then one can expect that economic development, social and human development and regional cooperation and integration efforts in the Caribbean region could suffer a setback.

Fifth, for those countries in the Caribbean whose tourism industry is heavily dependent on British tourists, one can expect some tailing off in this sector., I see the Brexit outcome resulting in potential problems for the tourist industry in Barbados. One of the first signs that the Brexit result has revealed is the downward slide of the Sterling. On Black Friday, the day after the referendum vote, the pound fell to its lowest level in 30 years. All signs so far indicate that the UK’s divorce from the EU will weaken the pound against the US dollar, and this can have a significant impact on the willingness of Brits to take holidays in places like Barbados. Also, there are several British people who invest in vacation properties throughout the Caribbean. In Barbados, in particular, British nationals are an important source of real estate foreign direct investment. Should these Brits be faced with a weakened Sterling, it is very likely that we will see a sharp decline in this kind of real estate investment.

Finally, one of my biggest concerns, with respect to the negative fallout of the Brexit result on the Caribbean, has more to do with Caribbean immigrants living in Britain, or Caribbean people wanting to migrate to the UK in order to reunite with their family members living in the diaspora. The “Leave” campaign and its leadership, Boris Johnson, Michael Gove, and Nigel Farage, utilize fear of immigrants to convince Brits to say no to the EU. The bigoted and xenophobic rhetoric spewed during the referendum campaign seems to be targeted at all immigrants to Britain, even those who have lived there for a generation or two. The Far-Right voices of intolerance and racism in the UK could drown out the more progressive and middle of the road voices. If that happens, one can expect an increase in xenoracist attacks on people for the Caribbean who are living in, or visiting, the U.K.


In my opinion, Brexit is a colossal mistake For Britain. It is a mistake that will most likely have negative implications for the Caribbean. But it can also be used as teachable moment for the Caribbean and its leaders. This critical juncture could very well provide the impetus for CARICOM States to shed it over-reliance on Britain and think seriously about forging a future path for the region based on self reliance and assertiveness in a globalized world that is exhibiting contradictory forces of fragmentation and integration. For small, vulnerable states, like those in the Caribbean the best hope for survival is to pool resources and talent in order to navigate successfully the turbulent waters of change.


  1. Andy Knight is Professor of International Relations at the University of Alberta. A former Governor of the International Development Research Centre, Professor Knight recently completed a three year secondment as Director of the Institute of International Relations at the St Augustine campus, The University of the West Indies (UWI).