A Lonely Road Ahead For Mrs. May
This week, the British parliament began the formal process of approving Britain's exit from the European Union. On Wednesday, the House of Commons voted overwhelmingly for the bill that would enable Prime Minister Theresa May to invoke Article 50 of the Lisbon Treaty and formally begin the process of withdrawing from the Union. Mrs. May hopes to begin the Brexit negotiation process as early as March, with the hope that a new deal can be reached by 2019. While parliamentary approval will be a near certainty, the same cannot be said for much else regarding the UK’s place in the world post-Brexit. Will they become a global economic force once free from pesky EU regulations? Or will the removal from the single market cause more harm than good in the long run?
Mrs. May believes she can steer Britain on the path to the former outcome. In a speech on January 17th, she laid out her vision for what she wants the UK to look like on the other side of the Brexit tunnel:
“I want this United Kingdom to emerge from this period of change stronger, fairer, more united and more outward-looking than ever before. I want us to be a secure, prosperous, tolerant country — a magnet for international talent and a home to the pioneers and innovators who will shape the world ahead. I want us to be a truly Global Britain — the best friend and neighbour to our European partners, but a country that reaches beyond the borders of Europe too. A country that goes out into the world to build relationships with old friends and new allies alike.”
The Prime Minister has quite a bit to work with as she sets out to pursue this goal. Domestically, she is fairly popular. Neither she nor her conservative Tory Party stand to face much opposition from either the Labour Party on the left or the nationalist UK Independence Party on the right, given each party’s poor leadership and internal fractures. In any negotiation, with the EU or otherwise, Mrs. May can tout Britain’s clout as Europe’s second largest economy, a market of 64 million people, and a major NATO power as important bargaining chips. Britain’s geography, language, strong institutions, and global cultural ties have also made it a longstanding center for finance, commerce, and investment.
Mrs. May believes all of this allows her to play a fairly strong hand in negotiating for her ideal Brexit: one in which Britain retains access to the European Economic Area (EEA), the free trade single market of the EU, Norway, Iceland, and Switzerland; while at the same time being exempt from the EEA’s tenet of freedom of movement, allowing Britain to curb the flow of immigrants and refugees coming to its shores. In her speech, she touted Britain's economic and anti-terrorism intelligence strengths in cautioning Europe that presenting her with a bad deal would be “ an act of calamitous self-harm.” She may feel too that her visit to the United States late last month, as the first head of government to visit President Donald Trump, gave her further leverage. She received assurances of a strong partnership and a quick trade deal from President Trump, an enthusiastic Brexit fan. Her hope is to balance her newfound American support against any attempts by the EU to punish Britain in its withdrawal negotiations.
Stuck Between a Trump and a Hard Place
The Prime Minister risks overestimating her position, however. Her partnership with Mr. Trump is borne less out of mutual respect, in the style of Reagan and Thatcher, and more out of Britain’s own necessity to show it still has strong allies in its corner. This does not bode well for Mrs. May in her future dealings with the US. Mr. Trump shows a dangerous disdain for the international order, and seems willing to treat US allies as his underlings. The self-proclaimed deal maker will be keen to show that he puts “America First” in any trade deal with the UK, and may demand some very heavy concessions, including access to Britain’s National Health System for American companies and looser regulations for American agricultural products. This would enrage many British voters, regardless of their stance on Brexit; privatized healthcare and Sunday roast dinners of American hormone treated beef is hardly the future they had in mind.
Already, Mrs. May is losing some political points over Trump. She was criticized both at home and abroad for staying mum on Mr. Trump’s migrant ban, while other world leaders criticized it (she eventually made a statement of disapproval). Her invitation to the President for a state visit has also set off a major political row. The thought of allowing Mr. Trump within “pussy grabbing” distance of Her Majesty Queen Elizabeth II has angered many Britons: a petition calling on the government to cancel the visit has gained 1.8 million signatures, and prompted a debate in Parliament.
Her attempts to bully the EU into a deal also belie Britain’s vulnerability. Faced with a migrant crisis and a rising tide of nationalistic movements, European governments will not be keen to reward Britain’s withdrawal from the Union. European officials have already dismissed any notion that they will allow Mrs. May to cherry pick her way into the EEA while at the same time ignoring its tenet of freedom of movement. A recent Parliament vote against giving EU citizens living in the UK permanent residency will further irk EU governments.
While cooperation on joint security issues such as Russian aggression and terrorism should come easily, a good trade deal will be harder to come by. Even if Mrs. May strikes a deal with the US, Britain will be the weaker party in negotiations due to the simple fact that its firms need the EU more than the other way around. Many of Britain’s aforementioned advantages as a financial and commercial hub become less attractive to international firms without access to the EEA. British companies themselves are starting to get cold feet. More than half of executives at the top British firms have reported negative impacts from Brexit, and as many as 76 percent have already considered relocating. Other European countries are eagerly courting anxious firms to their shores. Companies are also becoming wary of initiating or continuing investments and operations in Britain. The government has already had to coax companies such as Nissan with financial incentives to continue its operations, and may have to do more of the same so as not to risk large scale exoduses and job losses. All of this uncertainty is already taking an economic toll. The pound’s value has been in free-fall since the Brexit vote, and inflation has increased to its highest rate in years. If talks with Europe stall, Britain’s economy will be harmed most.
Brexiteers voted to leave the EU to give Britain more freedom of choice over its own affairs. The bitter irony is that they have rewarded Britain with just the opposite. Faced with an unpredictable demagogue on one side, and a bellicose continent on the other, it will take nothing short of a miracle from Mrs. May and her cabinet to secure the prosperous post-Brexit future she dreams of. She has less than two years to do so.