As anyone who has glanced at the news or stock market knows, Britain has voted for Brexit, or to leave the European Union. Simon Kennedy, Bloomberg’s London Bureau Chief, has described the referendum on Brexit as “perhaps the biggest foreign policy error by a sitting Prime Minister in the modern era” in part because it will reduce trade links between the UK and its primary trading partner, Europe. Ian Bremmer, president and founder of the political-risk consultancy Eurasia Group, said, “Make no question that the UK is going to go through a significant recession, starting now.” Several economists have also forecasted that Britain would go from steady economic growth to recession, though perhaps the safer term would be “economic stagnation”.
The next step for the UK is to trigger the Treaty on the European Union’s Article 50, which lays out how a member may officially leave. Once David Cameron’s successor as Prime Minister officially notifies Brussels of Britain’s intent to withdraw, an agreement must be made about the future UK-EU relationship within two years. This deal would address Britain’s access to the common market and what EU policies, including on immigration, the UK must follow in exchange. The UK would not technically be allowed to participate in these internal discussions and must either accept or reject what the EU offers. Because Britain would likely need an agreement that includes services and investment protection, final agreement requires consent from all remaining 27 EU members’ national legislatures. So any one country who thinks Britain is receiving a lax deal can veto it. The entire procedure is purposely designed to make exiting the EU difficult and unappealing.
In places like France and Italy, populist parties are nipping at the politicians’ heels, so there is a massive political incentive to tighten the screws on Britain and deter other “exits”, even if it does not make economic sense. Thus, as my previous article argued, the future agreement is unlikely to let the UK escape EU policies (which the Brits will no longer be able to influence), and yesterday Britain exchanged real sovereignty for an imaginary kind.
After settling a final agreement with the EU, Britain should ideally use its newfound freedom to negotiate free trade deals globally, including with China and the United States. Britain is unique where a populist movement actually wants more free trade deals, not fewer. However, if Brexit leads to a new wave of nationalism, creating trade deals would become more difficult, both globally and in Europe. There’s already anti-free-trade-deal sentiment in the US, as Trump and Sanders have exploited. Nevertheless, Nigel Farage, leader of UKIP (UK Independence Party) said, “I hope this is the first step towards a Europe of sovereign nation states trading together, neighbors together, friends together, but without flags, anthems, or useless unelected presidents.” Yet this hope ignores how nationalism’s return to Europe and disintegration of the EU would lead to protectionism, not free trade. Without common EU regulations, protectionists can use regulations to protect local companies, at the expense of British exporters. In the end, knocking down the EU as Farage wants would mean fewer friendly neighbors willing to trade. Ironically, Britain’s best hope to trade freely across Europe is for the EU to survive.
As the British—sorry, I meant English (especially those over 55, since millennials overwhelmingly supported “remain”)—seek to escape multinational Europe, new questions have emerged about how the other nations in the multinational United Kingdom, namely Scotland and Northern Ireland, will react. First Minister of Scotland Nicola Sturgeon has already promised that a new independence referendum is “on the table” since England dragged her nation out of the EU (Scotland voted to remain in the EU by 62% to 38%). The Economist and others have argued that Scotland would not vote for independence because it still doesn’t make economic sense. However, as the Brexit vote has shown, economic sense doesn’t always matter, and analyzing the political risk is vital. The outcome of an “IndyRef 2.0” will depend on what deal the UK and EU strike. If pro-Brexit voters successfully push for a loose EU relationship that offers freedom from EU immigration policies but doesn’t offer access to the EU markets, an independent Scotland becomes more likely. The English cannot easily tell the Scots to keep the multinational UK together after Brexiters escaped the multinational EU.
David Cameron will be remembered as a disastrous Prime Minister who failed to keep his party together and may ultimately share substantial blame for not keeping the kingdom united. Yet the British and European elites in general have failed miserably for not thoroughly educating voters about the EU (or making the EU understandable and responsive). In Britain after the votes had been counted, the second-most common Google search including “EU” was, “What is the EU?” As my last article about Brexit noted, polls showed roughly 40% of Brits did not know that they could elect members to the European Parliament in Brussels. This lack of knowledge is the elites’ fault.
In his Time column today, Bremmer explains that the Brexit result was the voters’ way to “throw the bums out”, come what may. He asks, “Do political and business leaders understand the growing demand for change?” Though my suggestion is basic, perhaps the grievances Bremmer sees can be addressed most effectively through politicians, the media, and voters teaching and listening to each other more. From my years teaching community college courses in Mississippi, I learned that educating my students required constant listening. Simply lecturing from an ivory tower did not work. Certain ideas seemed obvious to me, but once I realized they were not obvious to my students I had to go back and explain my logic in greater detail. Likewise, they explained to me the issues they were passionate about. Even if we never came to an agreement, we could hopefully come to a civil understanding. Replicating this formula on a national level is difficult (especially when we’d rather watch ESPN Sports Center than hear our opponents’ opinions), but it is worthwhile.
Mark Melton is the Deputy Editor for Providence. He earned his Master’s degree in International Relations from the University of St. Andrews in Scotland and focuses on civil conflict and European politics.
Photo Credit: In London’s Tubes. By Jose Manuel Mota, via Flickr.