EDITOR’S NOTE: This article was originally published in the Spring 2019 magazine.
From across the pond, Americans typically do not experience the direct impacts of European politics, but the end of the United Kingdom’s partnership with the European Union (EU) is sure to make waves around the world. Brexit is a term that has been in and out of the news since 2016, but Americans typically lack real interest in this seemingly faraway issue. However, the departure of the UK will produce a significant change in the global diplomatic climate. Since the EU focuses intensely on economic, cultural, and political integration in a historically contentious region, this will assuredly make an impact in American citizens’ day-to-day lives.
The UK’s 2016 public referendum on whether or not to part ways with the EU came to a very close and controversial conclusion, with 52 percent of citizens voting “Leave.” Voter turnout for the referendum beat the average US Presidential election by about 10 percent, quantifying British citizens’ apparent engagement with the issue. The Brexit debate is centralized on ideas like nationalism and state sovereignty, stemming from policy concerns about immigration reform, economic regulations, and the authority of the European Parliament. If the rhetoric during the last presidential election in the US proved anything, these are contested issues that people across the globe consider significant. Furthermore, the prospect of yielding any amount of authority and control to a higher institution is something most states, especially powerful ones, are terrified to even consider.
The EU is currently the most developed, structured, and successfully integrated supranational body in existence. Its decisions are statutorily binding to member states, making the EU unique, but also causing concerns within member states about the sacrifice of sovereignty. The UK was late in joining the EU, doing so while it was still the European Coal and Steel Community (ECSC), a fledgling organization with only limited jurisdiction and power. UK citizens and policy makers grew increasingly wary of the drawbacks of regional integration as the ECSC slowly moved towards its goal of supranational governance and officially became the EU in 1993. The Lisbon Treaty of 2009 then further empowered the European Parliament with authority over international trade negotiations, border control, and judicial cooperation in civil and criminal matters. This drove increasing British skepticism, and it simultaneously facilitated what was to come: these concerns came to a head in 2016 with the referendum taking advantage of Article 50 of the treaty, which provided an exit option for member states. This began the slow process of exiting of the EU, which is scheduled to be finalized on March 29th, 2019.
Despite the drawbacks of continued membership, pulling out presents issues that 48 percent of UK voters consider to be the greater detriment. The EU acts as a single negotiating body when it comes to trade agreements; member states have no outside treaties and no exclusive allies. When Brexit finalizes, the UK will suddenly go from having plenty of trade partners and favorable tariffs and customs procedures to having no deals at all. Ideally, the time since the referendum should have been used to establish a set plan for Brexit in terms of renegotiated trade deals and new partnerships. Though options are open to them, such as the European Free Trade Agreement (EFTA), negotiations take time, something that the UK has all but run out of.
Even now, less than a month before Brexit is set to be completed, there is no viable plan in place yet. If a plan is not confirmed by the British parliament, then all customs and immigration mechanisms will come to a screeching halt. Flights will be grounded, ports will be closed, and the island nation will be left with only the food, medicine, and goods that it has within its borders at the the time of the exit. Such a disaster rules out a“No Deal” Brexit for Parliament. Granted, on February 11th of this year, the UK signed on to a bilateral trade agreement with Switzerland in the case that Brexit ends this way. This is still not enough to stop the chaos that British citizens would face. There needs to be some sort of fallback trade network in place ahead of time.
Theresa May, the Prime Minister, has in recent months attempted to pass a contentious plan in parliament. Though it was shot down on January 15th by a parliamentary vote, it would have fulfilled Britain’s settlement requirements and prevented a hard border involving customs checks between Ireland and Northern Ireland until a new agreement can be reached. As it stands, there is no plan B. The parliament could either accept the “No Deal” option, which it will certainly avoid because of the immediate and drastic repercussions, negotiate some sort of limited trade agreement with the EU and its partners, vote to delay Brexit, or hold a second referendum in hopes that citizens have changed their minds.
May’s deal holds promise, even without fully developed trade agreements, and it may yet be passed, facilitating a smoother Brexit. Unfortunately, this would hurt American consumers. The economic integration of Europe and the subsequent lowering of trade barriers has helped global markets thrive, but the reintroduction of some of these barriers would hinder international trade, causing massive economic repercussions for the American public. When the 2016 Brexit referendum concluded, the Dow fell over 600 points. Furthermore, the strength of both the euro and the pound fell, consequently raising the comparative value of the US dollar in global markets, disincentivizing foreign investment. If Britain fully withdraws from the EU, this effect will likely be repeated on a much greater scale. Worse yet, British investment in domestic industry will likely take massive hits, threatening, or at least affecting, about 2 million American jobs. All this economic drama will assuredly dissuade investment in not only the British economy, but in global industry as a whole.
In layman’s terms: Brexit presents significant problems for the global economy. America’s especially close ties with the UK make it particularly susceptible to any economic trouble in the country. The evidence for this is apparent, but the US has done little to fight against the coming effects of Brexit. Even if May’s deal gets passed before March 29th, there is a tremendous amount of work ahead of the British government involving trade negotiations. Switzerland’s trade agreement is a step in the right direction, but it is merely the first step in the journey of a thousand miles.
America, as the global hegemon, has had nearly three years to step in and act as a guiding hand in the Brexit debate. Now, though, Americans can only pray for a UK change of heart or a last-minute agreement with another European trade group and brace for impact. Brexit voters might have seen their decision as a defiant move to protect their national sovereignty, but it was more accurately a vote against globalization and a decisive step towards a widespread and detrimental economic crisis.