Saturday, June 25, 2016

Brexit and Immigration: a Non-European View

For the non-European student in a UK school, visa has always been somewhat of a bureaucratic hurdle.  Getting the student visa to start is already an issue, but what is worse is that by the time the student is ready to graduate with a prestigious degree from a elite British school, getting a work visa to stay and work is next to impossible.  By the time the author finished his Master's degree at the LSE in 2012, foreign students are no longer even entitled to the one-year post-graduate visa, instead facing the prospect of getting kicked out of the country immediately after getting the diploma.

For this dire situation, many non-European students have made their complaints clear.  They believe that they are valued less than their European counterparts in same degree programs and with the same skill sets, because Europeans are entitled to work in the UK naturally (so the cost to potential employers for hiring is consequently lower) and they are more valuable to a UK economy that is so dependent on trade with fellow EU countries on the Continent.  As much as a UK education is valued in many non-European countries, the inability to stay easily in the UK for work takes away the appeal of UK as an emigration destination.

Today, perhaps, is the beginning of change for these long-disgruntled non-European students in the UK.  As the British people made the electoral decision to oust themselves from the EU, UK-EU relations is bound to deteriorate, with bilateral economic relations suffering in the process.  Europeans, in the very near future, may no longer enjoy automatic right to work in the UK, and trade with the EU may decrease in significance to the overall British economy.  Non-Europeans in Britain, to their discreet joy, may finally be able to see the day when they receive equal treatment as Europeans.

"But wait a minute," one might argue, "if the Brexit campaign was partly about UK being able to stem the flow of migrants, wouldn't non-European migrants suffer just as much as those that came through the Continent?"  Yes, but if Europeans and non-Europeans in Britain face harsher immigration policies in the future at equal standing, non-Europeans may actually have a few comparative advantages they can exploit.  One is the fact that prospect of tougher commercial terms with the EU make it more urgent for Britain to look for alternative trade partners outside Europe.  Non-Europeans in Britain will play a pivotal role.

And secondly, non-Europeans, both skilled and unskilled, may be able to perform, at much cheaper labor costs, jobs that Britons have been incapable or unwilling to perform.  Both will mean that even with fewer overall immigration quotas, non-Europeans may take a much bigger share than they do today.  Moreover, Britain, with half of immigrant population already non-European, may not even notice any changes to the non-European community, unless they specifically compare to the potential exodus of Continentals going home.  The "constant" non-European presence, then, may not induce further anti-immigration backlash.

To take the argument one step further, it could very much be conceivable that Britain may actually remain more friendly to non-European migration than the EU.  The rise of far-right political parties on the Continent in response to the ongoing refugee crisis will continue to pressure EU to clamp down on non-European immigration.  The UK, by virtue of not being on the frontlines of the refugee onslaught, may escape similar radicalization of immigration policy, instead adopting a much more flexible policy in accordance with needs for a multinational workforce to handle international clientele in trade and finance.

"But wouldn't the very status of the UK as an international finance and commercial center be at risk due to Brexit?" one might further speculate.  Such argument is based on the false assumption that the UK's primary competitive advantage is a tight connection with the Continent.  This assumption ignores the fact that many non-European students in the UK cannot even enter the Continent today without separate visa, and non-European businessmen park their money money in the City without any intention of doing business on the Continent.  They did not come to the UK because of the EU.

Instead they went to the UK because of its superior legal structure, first-class education system, low taxation, and institutional transparencies.  These competitive advantages of the UK will not change because of Brexit.  And as emerging markets continue to develop, the UK is bound to benefit even more from these competitive advantages.  And as the share of non-Europeans going and contributing to the British economy goes up in proportion at the expense of the Continental Europeans, non-Europeans in the UK will see their individual values go up significantly.

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