The pessimism of the commentariat over the UK's referendum decision to exit the EU has been vastly overdone.

However, Brexit has highlighted the fragility of the grand EU experiment. A Eurozone that includes countries of greatly varying economic health coupled with an EU customs and legal system that has largely ceded sovereignty to Brussels is a model with flaws that urgently needs addressing.

And of course, Brexit may never come to pass.

The UK's entry into the then EEC in 1972 was seen as a major betrayal of NZ interests, but has been beneficial in the long-term. While the UK is still a significant trading partner, our trade is now diversified and NZ has been at the leading edge in forging free trade agreements (FTAs).


There is no reason why the UK should not thrive outside the EU structure. And as former trade negotiator Charles Finny has noted, while the EU is a major market for UK exporters, the reverse also applies. There is at least a strong possibility that an FTA arrangement will be included as part of the exit negotiations.

In the words of one experienced senior diplomat, the longer-term reality is that the immediate emotional response by the EU - for the UK to get out as quickly as possible - will soon be replaced by self-interest. "The UK and EU will do a deal. It won't be perfect, but nor will they cut off each other's noses to spite their faces."

Stan Gregec, chief executive of the Tauranga Chamber of Commerce, was holidaying in Europe when Brexit was announced. Mr Gregec, a former trade official, said the reaction was shock, coupled with a feeling Europe would continue on its path of integration.

"But the EU will need to modify its current course to take the wider population with it," he said. "There are many pockets of dissatisfaction, which will need to be addressed more responsively from the pro-Europe elites to contain the prospect of others following Britain's lead."

It is already clear there will be no rush to the exit by the UK. Prime Minister David Cameron, by resigning immediately, has handed the ticking bomb to Boris Johnson, who is in no rush to trigger Article 50.

And, as many have noted, the referendum is technically non-binding. Noted constitutional lawyer Geoffrey Robertson, QC has pointed out that the UK parliament must vote to repeal the 1972 European Communities Act and pass a new act before the country can leave the EU.

"There's no force whatsoever in the referendum result. It's entirely for MPs to decide."