The Beginning of the End of Britain’s Brexit Fantasy

Maybe the worst part of the Brexit boondoggle is that the “better” trade deals the U.K. wanted were probably never going to happen.

By Michael Hirsh, a senior correspondent and deputy news editor at Foreign Policy, and Keith Johnson, a senior staff writer at Foreign Policy.
A man protests against Brexit outside the Houses of Parliament in London on July 5. (Dan Kitwood/Getty Images)
A man protests against Brexit outside the Houses of Parliament in London on July 5. (Dan Kitwood/Getty Images)

Her failure complete, Theresa May sat shaking her head grimly at her nemesis, Labour leader Jeremy Corbyn, but on some level the British prime minister must have known that every epithet Corbyn hurled at her after Tuesday’s decisive vote was true.

The overwhelming rebuke of her Brexit plan was a “catastrophic” defeat, the worst for any U.K. government since the 1920s. And the Tories’ overall handling of the Brexit boondoggle they had unwittingly set in motion nearly three years before did amount to “sheer incompetence,” as Corbyn said.

Perhaps the bleakest bit of news to come out of the drama in Parliament was that, for the United Kingdom, this is still only the beginning of its Brexit reckoning. And there can be no easy end to—nor even any clear way out of—an existential crisis that, as May earlier warned, could lead to a national breakup if Northern Ireland and Scotland go their own way and align with the European Union.

Moreover, Britain suddenly finds itself very much alone on the world stage. As of April 1, as things currently stand (and there’s no plan B in the wings), the U.K. will no longer be in the European Union, with everything that entails. Not least is the loss of frictionless and duty-free trade with nearly half a billion souls. And no one is rushing to save Britain by offering better trade terms, least of all its old “special” ally, the United States.

One of the earliest dreams of the Brexiteers was that a departure from all the entanglements of the European Union would allow London to negotiate better deals with Washington and other major trade partners. But that isn’t likely to happen anytime soon, especially under U.S. President Donald Trump.

“It’s very hard to see a clear path to a [free trade agreement] with the U.S. or any other third country for at least a decade,” said Michael Leigh, the former director-general for enlargement for the European Commission. All of Britain’s prospective trade partners—whether the United States, Australia, India, or others—have opening trade demands that are impossible for Britain to swallow.

Trump, who has been a Brexit cheerleader from the start—he was elected only a few months after the Brexit referendum and incongruously cheered the result during a visit to one of his Scottish golf courses—has made a brutally hard process even harder every step of the way for May. Last fall, Trump blindsided May by calling her proposed pullout agreement “a great deal for the EU,” then cast doubt on whether he could negotiate with her at all, in part because May’s pact would have required a 21-month transition period.

“Trump has made clear any trade deal will be America First,” Leigh said. “And the [U.S. trade representative] will definitely raise with the U.K. all the issues that came up in TTIP”—the Transatlantic Trade and Investment Partnership begun under former President Barack Obama that Trump has abandoned, as he has other multilateral trade efforts. Leigh rattled off all the contentious items that dogged talks before—among them phytosanitary regulations, chlorinated chicken, hormones in beef, U.S. health care providers’ access to Britain’s National Health Service, and others. “All those issues will be back on the table.”

More to the point, while standing alone, the U.K. is not a priority for anyone. For example, Leigh noted, Australia and New Zealand are currently in talks on trade deals with the European Union and making it a priority over any hypothetical talks with Britain. A market of 450 million outweighs one of 65 million.

Asia offers little solace. India wants more visas, an impossible ask for Brexit Britain. And according to Harold James, a political economist at Princeton University, a new pact with the hard-line government in China, which has felt under siege due to Trump’s tariff war, also will be “very very difficult at the moment. The trade deals are just not there.”

Perhaps just as important, however the Brexit drama ultimately plays out: Britain has cost itself a huge amount of credibility—with the EU, with the United States, and around the world, analysts said. And having negotiated May down to a meager deal that left London with little say over its future in a post-Brexit EU—only to see her go down in flames over that—Brussels may not be as eager to have Britain in any longer.

“In some ways the Europeans have already prepared for life without the U.K.,” James said. European parliamentary elections are coming up in May, and Brussels is leery of adding more numbers to the anti-EU coalitions on the left and right on the continent. Even if London decides to hold another referendum on Brexit—one option for a post-May government—the other major European partners will be skeptical.

“There is quite a lot of suspicion about a new referendum,” James said. “If there’s one more, then why not another one? And another one?”

The enduring lesson, James and other trade experts say, is that it’s quite difficult—if not impossible—to walk away from a giant trading bloc like the EU. “Geography is a very stubborn thing, and the U.K. is just a few miles from the French coast,” said Mauro Guillén, a trade expert at the University of Pennsylvania’s Wharton School of Business. “For the last 50 years, the U.K. has been close to Europe, and Europe is the largest market in the world.”

As a member of the World Trade Organization, Britain should be able to maintain open trade with other WTO members (though London will likely face challenges to the certification of its post-Brexit tariff plans). Even so, the future strength of key British industries such as banking and airlines—and their access around the world—has been called into question, Guillén said. Airlines such as Easyjet that will have non-European majority owners are scrambling to win permission to keep flying around Europe, for example.

All in all, Britain’s self-imposed nightmare will serve as a cautionary tale to anti-EU parties across the continent.

“What it’s going to push now is people critical of the EU to transform it from within,” said James, pointing to recent efforts by far-right Italian Deputy Prime Minister Matteo Salvini to form a Euroskeptic alliance inside the union with the leader of Poland’s ruling party, Jaroslaw Kaczynski.

“Both sides are going to say no, no, no—don’t do what Britain did.”

Michael Hirsh is a senior correspondent and deputy news editor at Foreign Policy. Twitter: @michaelphirsh

Keith Johnson is a senior staff writer at Foreign Policy. Twitter: @KFJ_FP

Tags: Brexit, EU