In this, the 400th year since William Shakespeare’s death, the United Kingdom faces an existential question: To be or not to be “European.” When Britons vote in June on whether to remain in the European Union, making the right choice will require them to cut through the hyperbole on both sides of the debate and consider carefully what “Brexit” would really mean for their country.

The main issues that will shape the decision relate to trade relations, regulation and the budget; foreign policy and security; and domestic policies such as welfare and immigration. Then there are questions about the substantive and emotional benefits and baggage that attend EU membership, with all of its rules, regulations and bureaucrats. The choice is stark, but the questions at issue are not all black and white.

The U.K. is deeply connected by trade to the rest of the EU, which accounts for the largest share of Britain’s total global exports and imports, each amounting to about 30 percent of British GDP. Brexit would therefore have significant consequences for trade flows not just between the U.K. and the EU, but also in the rest of the world. What those consequences would be depends on the terms and timing of new trade agreements.

When the EU’s predecessor, the European Economic Community, was created in 1957, it linked just six countries (Belgium, France, Germany, Italy, Luxembourg and the Netherlands). Given high tariffs at the time, the EEC brought substantial gains. Today, the EU has 28 members and is the world’s largest market, but tariffs generally are much lower.

The truth is that it is impossible at this point to know how post-Brexit U.K.-EU trade relations would shake out. After all, there is no real precedent — Greenland’s departure from the EEC can hardly be considered a comparable situation — and negotiating the details of the withdrawal alone could take up to two years. During that time, the pound would be more volatile, trade flows may be diverted or delayed, and some investment in British trade-related industries would be put on hold.

Britain might emerge from such a process in a situation resembling that of Norway: a member of the European Economic Area that pays most of the regular costs of EU membership to retain most of the same trade privileges. Or it might be like Switzerland, relying on bilateral trade agreements, as it pays to be part of the single market in goods but not services. Another possibility would be to go it alone in the World Trade Organization. Or Britain could create an entirely new model for itself. In any case, new trade agreements with non-EU countries would be inevitable.

The U.K. would also pay special attention to maintaining the City of London’s role as a global financial center — a status that a Switzerland-type arrangement could undermine, as U.K. trade in financial services with the single market would plummet. And paying to retain trade preferences could expose Britain to future changes in EU policy. For example, if the EU used future financial subsidies to support highly indebted periphery countries, the U.K. budget could also be affected. In short, in the event of Brexit, the U.K. may face some very difficult decisions on trade.

But trade is just the beginning. The Brexit referendum will also have political repercussions, particularly if the Conservative Party splits over the issue — a distinct possibility, regardless of the outcome. What would that mean for future U.K. economic policy? How would it affect the strength of the U.K. economy or Britain’s defense budget?

On security and foreign policy, the British have not been much impeded by the ponderous EU. While the EU imposed sanctions on Syria, the U.K.’s parliament voted against any military involvement there.

The U.K. intelligence service is, by all accounts, far ahead of most of its EU counterparts and works closely with the United States. In a Brexit scenario, the U.K.’s intelligence ties with the U.S. would probably become even stronger, regardless of any new limitations on its access to intelligence from some EU member countries.

The one area where the situation is not quite so tangled, at least from the British perspective, is the euro, which the U.K. never joined. (I advised Prime Minister Margaret Thatcher not to join the eurozone’s predecessor, the Economic and Monetary Union.) This was the right call, as it enabled the U.K. to retain full monetary-policy authority, and thus the ability to use the exchange rate to absorb shocks when domestic booms and busts do not synchronize with those in the rest of Europe.

From the EU’s perspective, losing the U.K. could be a serious blow, forcing the EU to provide less for its members at a higher cost. By making it easier for other countries to insist on their own special exceptions — for example, to the deficit and debt “requirements” established in the Maastricht Treaty — Brexit could pose serious problems for the EU’s evolution. Already, EU members — especially the eurozone countries — have been avoiding concrete action to resolve their interdependent economic, social, banking, debt and currency crises.

While both proponents and opponents of Brexit exaggerate their case, a review of the facts suggests that saying no to Brexit would be the better option for the U.K. as well. If it does not like how the EU — and the European Commission — evolves, it can attempt to renegotiate its membership terms, as Prime Minister David Cameron did in February, or it can exit.

But if the U.K. exits now, its options become severely limited. In particular, future changes to its relationship with the EU, especially a future re-entry, if desirable, would be difficult to negotiate (perhaps especially given European leaders’ desire to deter other member states from following the U.K.’s example). Indeed, it could entail worse terms than Cameron has secured for his country should it remain in the EU.

Michael J. Boskin, a professor of economics at Stanford University and senior fellow at the Hoover Institution, was chairman of George H. W. Bush’s Council of Economic Advisers from 1989 to 1993. © Project Syndicate, 2016

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