Immigration and open boarders to other EU nations seems to be a leading reason for UK citizens voting in favor of brexit. And this is backed up by polling where one-third of voters in favor of brexit stated that immigration alone was reason for leaving. The UK was also a little less connected to the EU than other country members, having their own national currency - pound sterling - rather than using EU's Euro. If you look at the maps of voting and the demographics, there is a huge divide among age groups -- young voting to stay and older voting for leave -- as well as in urban versus rural communities.
- What were the advantages to Britain and Europe when Britain was in EU?
Having the UK in the EU helps established the EU as second largest economy in the world (by GDP). With UK being the second largest economy in the EU (behind Germany) the brexit is a blow to their market size. UK was also the third largest country by population, and as a consumer rich country, leave could have detrimental effects on other EU nations.
- Why did the global markets react the way in which they did?
Warren Buffet has a quote: “This imaginary person out there -- Mr. Market -- he's kind of a drunken psycho. Some days he gets very enthused, some days he gets very depressed. And when he get really enthused, you sell to him and if he gets depressed you buy from him. There's no moral taint attached to that.” I think this applies here. BUT with that said there are some legitimate reasons for markets to worry, namely the domino effect it may have across the EU. With the UK breaking off it may lead to other nations, Italy and France, both of which will have a vote (referendum in Italy, presidential vote in France) to effectively decide their status in the EU. If these two countries also voted to leave the EU that would arguably be the end of the EU, with three of the top four economies exiting and others with lowly economies.
- What are the likely long term implications to the global trade and Government policies?
This is impossible to say so soon after and with the UK still in the EU, and not yet knowing the fate of France and Italy. Let's say France and Italy stay in the EU; in this case there is little reason to see how brexit hurts the EU too much. It is still a huge market and will continue to basically work as is. As for the UK it is hard to see how this would be beneficial from a global standpoint; they are leaving the free trade and market of the EU. They will have to renegotiate trade deals with foreign states. There is no way the EU will offer the free trade that comes with being a member, so all the goods and services UK previously exported to EU states will now have a cost associated with it from tariffs (around half of all goods/services). Without the free trade it is reasonable to think that EU members too will look to other member states to fill the trade gaps which the UK used to provide, in turn hurting the UK economy.
The brexit was much debated and we still do not know what the implications will be. However, it is a move towards nationalism that seems to be sweeping throughout the world at the moment. The older generation are the ones who vote and they are feeling a bit nostalgic at the moment. It appears globalization will be slowing down over the next several years, which seems like a move backwards; eventually the world will be open for business