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Brexit and the new role of the United Kingdom

25-02-2020, 01:40   1070
Brexit and the new role of the United Kingdom

Photo: Removal of UK flag from the European Council in Brussels, January 31, 2020. Olivier Hoslet/AFP via Getty Images

On 31 January 2020, after a long and tedious three and a half years that had passed since the referendum sent shockwaves all over Europe, the United Kingdom finally completed its official withdrawal from the European Union. However, far from making matters about the future of the continent - and of Britain itself - clear, it has merely confirmed the reality many on the both sides of the English Channel preferred to deny till the very end. Like it or not, Brexit is a fait accompli, though the exact contours of the post-Brexit Europe are not clear yet. 

 

Why Brexit is thoroughly misunderstood 

Ever since the referendum, the undertone of the mainstream analytics on Brexit was that the outcome had been triggered by completely irrational considerations, such as imperial nostalgia, misguided nationalism and jingoism of which the whole Brexit-supporting citizens were often accused. While such motivations were indeed present and naturally, the far-right forces such as Tommy Robinson’s British National Party (BNP) were among the ardent supporters of leaving the European Union, a mere look at their long-term popularity among the Brits, which has never exceeded 4-5%, makes it quite obvious that a significant share of the Leave voters were not driven by xenophobia or aggressive nationalism. However, incessant brandishing of all the Leave camp as right-wing bigots by some of the most influential media and public intellectuals brought nothing but their susceptibility to anti-liberal hysteria and turned into a sort of self-fulfilling prophecy. The indecisive and wobbly position of Theresa May’s government which seemed to be lost in the limbo between the need to pursue negotiations to leave and the deeply seated doubts as to the inevitability of Brexit, did not help, either: it emboldened the hardliners in Brussels who sought to intimidate London into changing its mind and finally brought the country to the verge of the constitutional crisis. As it often happens, the willingness to make reasonable concessions, initially demonstrated by London, only served to rouse European appetites, strengthening the position of the Brexit hardliners and leading to the negotiation stalemate of 2018-2019 which for a time being made the worst fears of the crashing no-deal Brexit seem inevitable. 

Contrary to the catastrophic forecasts, however, Boris Johnson’s decisiveness to finalize Brexit on time, and of course his decisive victory in the December 2019 parliamentary elections which brought him a firm and loyal majority, helped to spur the negotiation process and achieve some tangible results that made it possible for London to officially leave the EU timely and in relative order. Tensions over Irish question which lingered for many months, was suddenly relieved overnight when Prime Ministers Johnson and Varadkar agreed on a formula for the transition period: there will be no customs border between independent Ireland and Northern Ireland, while the latter instead will have one with the “mainland” Britain drawn through the Irish Sea- until at least a publicly expressed will of the Northern Irish population decides otherwise. However, as the clock in London stroke 11 pm on 31 January, and a countdown to the end of the 11-month period of negotiations- and the UK’s Prime Minister has already pledged not to prolong it- the post-Brexit world remains an ocean full of unknowns. 

 

Negotiation: Game of Chess 

To make any reasonable forecasts as to the outcome of the negotiation process, we have to understand the major purposes and motivations of the both sides in a nutshell. And, while striking an optimal trade and cooperation deal is indeed very important for Brussels and London, they also have considerations which in a pessimistic scenario may push them to play a hard line and forgo the benefits of a trade union. For the EU, it is vital that Britain does not reap substantial benefits from its newly-found regulatory independence and thus it demands from Britain compliance with a certain set of EU-wide rules, most importantly those pertaining to state aid limit. It fears, and not without reasonable foundations, that, once freed from the necessity to obey the standards set in Brussels but preserving the benefits of the trade union, London may subsidize its flagship companies to endow them with competitive advantage over the European competitors. Prime Minister Johnson’s statement on this matter has been quite ambiguous- he refused to consent on the regulation harmonization, while asserting that British regulations on state aid are actually even tighter than the European ones and there is nothing to worry about. This position of his sheds light on how current Westminster approaches negotiations: the utmost purpose is to gain as much independence and possible, and definitely not to be bound by the customs union, free movement of people and detailed regulations as to the quality of goods, while keeping trade as free as Brussels is ready to embrace and sustain current levels of cooperation on all the strategic issues. This position is somehow in the middle ground of the British political class, in between of isolationism of UKIP and its likes within the conservatives (notorious European Research Group within the Tory) and liberals who would be happy to ditch Brexit in all but name and whose parliamentary dominance before the latest elections brought the political impasse of 2019. Thus, given that the parties’ visions are not exactly opposite but have a potential for a clash, the negotiation process, as from now, seems to be all but easy. More so, both sides have sufficient arguments which may lead them to think the opponent would have to give in in the end. 

For its part, London is well aware of its status as one of the three biggest European powers and believes (or at least pretends to believe in order to strengthen its negotiation case), that it is simply “too big to discard”. Why it is clear that costs of a hard Brexit would be substantially higher for Britain that for the EU as a whole (according to some assumptions, it may reach -1.5% of annual GDP in the medium term), the suggestion is that Europe would still be hurt badly enough to allow this outcome. A much more solid argument for Brexit optimists is London’s role in European security: the report by Henry Jackson Society, an influential London-based think tank, claims that the UK is poised to remain a pinnacle of the European security order. It remains the only large European NATO member with military spending above 2% of the GDP, and has advantage in the field of cutting-edge military technologies, as well as its readiness to project force outside its own borders. This report argues that in the conditions of growing global instability, increasingly more assertive China and revisionist Russia, as well as uncertainty as to the future of transatlantic partnership, Europe will have no choice but to keep close ties with London to bolster its own security. Finally, the circles close to the current British government share optimistic perspectives on the future of UK’s global trade: they champion establishing free trade agreements with virtually everyone, from the U.S. to China to India to Middle Eastern countries. They argue that Britain’s “natural” foreign trade pattern had long been that of transoceanic and intercontinental links dominating, while inter-European trade has risen in prominence only during the last four or five decades. So, they claim, there is full potential for a one more reversal, and express readiness for a temporary “frictions” in foreign trade arising in this case. İn this circle, the opponents of Brexit who had preached for a second referendum and the mildest exit possible are dubbed “Project Fear”, implying that they were trying to intimidate the British public spreading alarmist forecasts. 

On the other side, several significant factors play for Brussels. First of all, the EU argues, it is unclear whether London would be able to ever restore its global trade channels, given the growing protectionist tendencies and the fact that Britain has long ceased to be the global factory and does not have a particularly vibrant industrial sector but for certain high-tech and rather niche sectors. Indeed, the share of the EU in the British exports, though has been somewhat falling, equaled 44% last year, making it by far the most significant trade partner. Moreover, Brexit has brought the City’s financial industry, which pumps hundreds of billions into the British economy annually, under strain as it is unclear whether the London-headquartered organisations would remain capable of operating in Europe as freely as they do now. This issue alone can be played on by the Brussels bureaucracy, as numerous policy papers already warn London of an imminent threat of companies’ and banks’ migrating to Frankfurt, Dublin, or anywhere else in Europe, in thousands, in case it fails to agree on the EU terms (most often, meaning the customs union London is so strongly willing to escape). The Irish question may also provide a good cause for Brussels to gain more concessions: it has been argued that Northern Ireland’s remaining de-facto part of the customs union provides a ground to demand from London full compliance with European rules, or risk ending up with a crashing exit, unfavourable terms of trade and potential trouble in Ireland. 

At the same time, several issues internal for Britain and European Union, may exert a strong impact on the ultimate outcome of negotiations. On one hand, Scottish and Irish questions add up tension to the British politics. The SNP government in Edinburgh has not forgone the ultimate goal of gaining independence after the lost referendum in 2014, and has recently called London to allow a second referendum, since strong pro-European tendencies in Scotland have made the idea of seceding from Britain more popular (support levels are shows to surpass 50% at times). Westminster refuses to hold any referendum at least until the deal with Brussels is struck and the contours of future relationship with Europe are clear. However, if the pessimistic hard Brexit scenario happens, a surge in support for independence will be hardly escapable. London reacted very nervously to comments made recently by Donald Tusk, the recent President of the European Commission, who claimed Scotland “would be welcomed in the EU should it opt for independent existence”, and called them irresponsible. The positive dynamics in Ireland shouldn’t be taken for granted, either: Leo Varadkar’s government has lost the recent elections, while the future government will be most probably formed with participation of Sinn Fein, the Irish nationalistic party that aims at ultimate reunification of the whole Ireland. There is a very sensitive issue of Gibraltar, which due its tiny size and dependence from adjacent Spain for most basic necessities will be extremely vulnerable in case of in case of failure to strike a comprehensive deal. Madrid which has never completely withdrawn its claim over Gibraltar, insists that the current status-quo may be preserved only if this territory remains part of the EU, while PM Johnson has repeatedly excluded this opportunity, claiming that the whole of Britain is to leave. 

On the EU side, the negotiation process will almost certainly be complicated by diverging interests of various member states since their level of engagement with Britain differs a lot. Scandinavian countries and some Eastern European member states (Poland, Baltic states etc.) will be likely supportive of a mild approach since they have traditionally been on a friendly footing with London, while EU leaders- France and Germany, and maybe Italy, would like to take a harder stance in order to emphasize their political weight and also send warning signals to lesser member states who may want to leave the Union at some time in future, that divorce is a painstaking and self-defeating choice. However, there are grounds to suggest that after a period of tactical instransigence and raising stakes, the sides will eventually come to some middle ground (of course, unless Britain is indeed poised to avoid any forms of customs cooperation and introduce a full-fledged visa regime, which, bearing in mind the Irish question, would resemble a shot in her own leg). Demanding unilateral concessions, while it may seem attractive, will most certainly bring the process into a deadlock and, instead of strengthening Europe, will alienate many smaller member states where British speculations about “Brussels dictatorship” may then find a welcome audience and trigger active Euroscepticism. Moreover, turning the long-term ally and partner into one more source of uncertainty is hardly a recommended choice in the era of exponentially growing global uncertainty. The first months of Boris Johnson’s premiership have proved him to be much more rational and capable of compromise than many believed him to be, due to his bullyish image and taste for pompous and assertive proclamations. 

 

What will become of Britain and EU?

The most intriguing issue about Brexit right now is about the long-term change that it will bring to both United Kingdom and European project.  Many politicians and commentators in Britain claimed it to be the most significant event in British history since the World War II; the political crisis that unfolded due to Brexit was definitely the gravest one after 1945. But what vision of future do the Brexiters haveiso. Prophesies were made of the once-great Kingdom turning into “Little England”, a third-rate power with declining socioeconomic picture and weak capacity to influence anyone bar the closest partners. To refute this dystopic version of the future, the Conservatives had to offer something different, a refreshing vision which could clearly justify Brexit and make it look beneficial in the long term. Thus, the notion of “global Britain” was born. While the discourse of the Brexit campaign was primarily about “restoring independence” and “taking back control”, it had little positive appeal per se, and it had to be made. 

In 2019, the aforementioned Henry Jackson Society issued a series of programmatic pieces that argued for a tectonic shift in the British perception of itself. Having undertaken a thorough comparative analysis of the eight major global powers on parameters ranging from military prowess and outreach to economic weight to cultural prestige, the Society’s analysts established that the UK is still the second most powerful nation on aggregate- though admitting that London has been “lazy” in its foreign affairs as of late. The Center calls London to pursue a foreign policy based on values and interests and- although not claiming it explicitly- shows the EU as devoid of global idea and willingness to defend its values against the growing assertiveness of non-Western powers; it also recalls the classic British attitude to Europe- not allowing any big continental power get too dominant and play on the controversies between them.  

Thus, it views Brexit as a blessing which could help Britain unleash its full potential. They call for raising the share of military spending to 3% of the annual GDP, necessary for boosting the military capacity, develop a National Strategy for the next 10 years to make foreign and defense policy smarter and more coordinated, and improve the quality of public service. More concrete proposals include standing firmly up to Russia in Eastern Europe (Ukraine is particularly emphasized), play a greater role in resolving conflicts in the Middle East, the traditional zone of British interests and know-how, and creating the European Defense Unit, which is supposed to bolster NATO’s capacity on its Eastern flank but would have stricter membership rules (failure to allocate a certain share of the GDP to defense would trigger suspending membership rights). This is a fairly ambitious plan, which actually aroused suspicions that Brexit had initially been a project of those still nostalgic for the Empire and “white man’s burden”. But, given that the Society and its ideas are closely linked with PM Johnson, and the global penchant for theatrical populism almost everywhere, of course it has a significant element of exaggeration. However, one can hardly doubt that probably the best way to make any good of Brexit for London is to improve global presence- of course within the limits of the national economic capacity which are not as huge as the report’s authors would like it to be. The proposed immigration bill has recently fallen under close scrutiny, as it is very ambitious about bringing the top global talent into Britain while at the same time refusing entry to the holders of low- and medium-skilled professions some of which experience chronic demand for labour; this plan has already sacred many big companies afraid of losing the ability to operate at current capacities if new rules are approved. After all, Britain, as most European countries, has an ageing society highly reliant on publicly funded care, which makes the intake of migrants in relatively unskilled jobs inescapable. Moreover, Conservatives owe their victory to the traditionally Labour-voting post-industrial North which has been promised massive public investment and recuperation programme that would require huge amounts of public money. The Johnson’s government will have to sail between the Scylla and Charybdis to stick to its electoral programme and running an ambitious foreign policy, and their success in doing so will bear a direct impact on the Kingdom’s destiny, including the issue of Scotland, the status of a great power Britain still enjoys (with some reservations) and the trustworthiness of the Tories, the most successful political party in European history.

And what about Europe? It would be a gross exaggeration to pronounce the death of European dream- indeed, in some countries Brexit has seemingly made commitment to the EU stronger. But potential risks have definitely increased: if Britain manages to minimize its losses and fulfill most of the Brexit promises, the Eurosceptic parties such as Le Front National, Lega Nord, AfD etc., will acquire a huge argument for leaving the EU, which may get really popular.  And however seducing may it seem for Brussels to try to “punish” London by refusing concessions and preferences, this is likely to alienate some member states and thus will require a lot of top-down decision-making, which would empower Eurosceptics even more. The fact is that Brussels, if it wants to become a truly global power in the political and military sense, will have to take some tough decisions- most probably expelling some of the members unwilling to submit to the central strategy and being ready to run an unconventional foreign policy, maybe even ditching the post-war alliance with U.S. The contours of the latter perspective got much more clear with President Trump in the White House; it is rather symptomatic that close to Britain’s ultimate exit, France’s President Macron started to openly endorse rapprochement with Russia and flirt with the prospect of raising anti-Russian sanctions. Traditional ties between Paris and Moscow may grow much stronger once London is out, and the biggest intrigue will now be Germany’s role- whether it will choose to balance Paris and remain committed to the Atlanticist foreign policy, as it has been doing under Chancellor Merkel, or to bandwagon and thus sealing Europe’s eastward shift. This latter scenario will most probably alienate Eastern European countries, mostly pro-American and greatly suspicious of Russia. The very survival of the EU in its current frontiers will then become much more than a rhetorical question. And of course, the social impact of Brexit, which is still impossible to predict, will have a huge bearing on the global development in the 21st century. In the worst case, if Britain restores a visa regime with Europe, reverting the dynamics of people’s movement, a wave of isolationist nationalism may spread further, shattering the dreams of the future without borders and conflicts.