Brexit is the UK's Donald Trump

Photo credit: Davide D'Amico via Visualhunt / CC BY-SA
The world is shocked and appalled that Donald Trump has become a major party candidate for President of the United States. It is like watching a train wreck in slow motion, but Trumpism isn't confined to the US. On Thursday, the UK will vote for or against their own Donald Trump, known as Brexit.

Brexit, more affectionately known as the United Kingdom European Union membership referendum of 2016 could potentially separate the UK from the European Union (except that it wouldn't).

Like Trumpism, the pro-Brexit camp is fueled by nationalism, xenophobia, bad economics and promises that it won't be able to keep.

The biggest misconception about the referendum is that it will remove the UK from the EU. It won't. Brexit is a non-binding referendum that is not supported by the current government or the official opposition. Both parties have some issues with the EU, but do not officially support leaving it. The only party that fully supports the UKs departure from the EU is UKIP.

It is quite likely that the first thing that will happen in the event of a yes vote is a dive in global stock markets, but Britain's would take the biggest plunge and the pound would lose considerable value. The second thing that would probably happen would be an election.

So, in addition to passing the referendum the British people would need to elect a majority UKIP government. Any other government could, and likely would stall, debate, form exploratory committees, hold additional referendums and drag the process out until it went away. They could also simply not act on the referendum at all, especially if it passes by a narrow margin.

However, a majority UKIP government could proceed directly to the European Parliament to begin negotiations on a Brexit. This would work something like a divorce where things like property and compensation were discussed. The process could take several years and during that time, UKIP would need to remain in power.

Having obtained the terms for separation, the UK could then officially leave the European Union and begin the process of patching up diplomatic wounds and negotiating new trade deals. This process too could take many years. The UK would not be in a strong bargaining position and the EU, the United States, China and others wouldn't be in any particular hurry to get a deal in place.

That is the political reality of an actual British pullout from the EU. The economic reality is much uglier. In fact it has already begun. Investment in the UK has slowed, the pound has lost some value, and British stocks are lacklustre because investors wait to see what happens. Investors and business people hate uncertainty and that is what they are looking at at the moment. An independent UK is simply not as attractive as a UK with easy access to European markets.

A yes vote on the referendum would increase that uncertainty exponentially and investment dollars (foreign and domestic) would steer clear of the UK until the uncertainty is resolved. In the case of a yes vote, that means that the economy wouldn't pick up until the Brexit idea is officially abandoned or until new trade deals are in place. Either of those things could take a decade or more.

Ironically, the sovereignty that the pro-Brexit camp seeks to defend could be badly damaged by a departure from the EU. As John Oliver explains in the video below, the UK would have to renegotiate all of its trade deals from a weakened position. That could result in being forced to accept very unnatractive terms and conditions including many of the EU rules that UKIP and others are currently upset about.

So, to return to the start. On Thursday, British citizens will have the opportunity to vote for or against Donald Trump (Brexit). The rest of the world knows that no giant wall is going to be built between the UK and Europe and the world certainly knows that Europe isn't going to pay for it. What remains to be seen is whether or not Britons are so crazed with xenophobia that they will economically and politically shoot themselves in the foot, while accomplishing nothing more than badly injuring their foot.

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