Brexit Is Finally Done, but U.K. Ambitions Already Seems Outdated
LONDON – It took eleven grueling months for UK and European Union negotiators to work out the terms of a post-Brexit trade deal. However, in many ways, the deal is already four and a half years out of date.
The world has changed radically since June 2016, when a slim majority of the people in Britain voted to leave the European Union, tempted by the argument that the country would thrive by shedding the bureaucratic shackles of Brussels.
In those days, the vision of an agile, independent UK – free to develop profitable next generation industries like artificial intelligence, and to sign their own trade deals with the US, China and others – was a tempting selling point. The Brexit buccaneers promised to create a “global Great Britain”.
That was before the rise of President Trump and other populist leaders who erected trade and immigration barriers, and countries that turned inward. It was before the coronavirus pandemic exposed the weaknesses of far-flung supply chains, sparked calls to bring strategic industries back home and drive globalism into retreat.
On the fearful dawn of 2021, buccaneers went out of style. The world is now dominated by three gigantic economic blocs – the United States, China and the European Union. Britain has finalized its divorce from one of them, leaving it in isolation at a time when moving forward seems more dangerous than it used to be.
“The entire Global Britain model does not reflect the more protectionist, nationalist world we live in,” said Thomas Wright, director of the Center for the United States and Europe at the Brookings Institution. “Becoming a global free trader in 2016 is a bit like becoming a communist in 1989. It’s bad timing.”
As Prime Minister Boris Johnson is leading Britain into a post-Brexit future, he also risks being politically out of step.
The Brexit deal with the European Union comes about the moment President-elect Joseph R. Biden Jr. replaces Mr. Trump’s “America First” creed with the message of repairing alliances and working together on issues such as global health and address climate change.
While the deal turns away tariffs and quotas on goods crossing the English Channel, it is essentially about disentangling neighbors who have been deeply integrated over four decades. This alienation, analysts say, will weaken ties between the two sides in other areas such as security and diplomacy.
“Biden wants alliances, multilateralism and cooperation, and Brexit runs completely against that,” said Mujtaba Rahman, an analyst at the Eurasia Group, a political risk consultancy. “Brexit is entering a more difficult political context in which it runs against the grain.”
Mr Trump welcomed Britain’s drive to separate from the European Union. As a reward, he promised to negotiate a trade deal with Mr. Johnson, which he personally cultivated. But Mr Biden was against Brexit and has ruled out negotiating new trade deals until the United States has improved its own competitive position. That nullifies one of the main selling points of Brexit.
Mr Johnson has pointed out other ways that Britain can work with the United States. It is increasing military spending to strengthen NATO and to host a United Nations climate change summit next year that will provide Mr Biden with a platform to re-engage the United States in the climate change challenge.
Britain has also competed as an advocate of democratic values in places like Hong Kong that stand alongside the United States. But in a less hospitable world, it may not find many allies for this type of work.
“Who are the obvious partners for you?” Mr. Wright said. “Four years ago you could have said Brazil, but Brazil is now run by Bolsonaro,” he added, referring to populist President Jair Bolsonaro.
There are also limits to how muscular a partner Great Britain can be in confronting autocratic states like China and Russia. The changing relationship with China illustrates his diminished stature.
Britain once hoped that its free agent status would enable it to develop a thriving business relationship with Beijing that was not encumbered by the baggage of the European Union or the United States. However, under pressure from Trump on the role of Chinese telecommunications giant Huawei in 5G networks, Britain has largely given up its cultivation of China, in line with the more antagonistic position of the United States.
In contrast, the European Union has continued to negotiate a landmark investment treaty with China, a goal of Germans who want greater control over the Chinese activities of their companies. Last minute objections from aides against Mr Biden keep Europeans thinking, but Germany’s desire to close the deal before the end of the year confirms its more confident position.
In 2016, Brexit was welcomed by three different factions in British politics, said Matthias Matthijs, professor of international political economy at Johns Hopkins University: right-wing anti-immigration figures like Nigel Farage; Orthodox free traders in the Conservative Party; and some on the left, who hoped the move would free money to subsidize factory jobs in the industrial north of the country, and definitely viewed the European Union as a banking corporation Britain was way out of.
“It’s not clear that signing this EU trade agreement will give them more freedom to do so,” Matthijs said of the subsidies, noting that the UK had agreed to respect restrictions on how much state aid it spends on industry can.
The paradox is that Britain is leaving the European Union at a time when its two largest economies, Germany and France, are adopting some of the principles of industrial policy that inspired Brexit.
The pandemic has forced Brussels to rethink the policies it once shunned – initially in the form of a $ 913 billion coronavirus bailout – to align with Brexiteers’ ideas like Dominic Cummings, former chief advisor to Mr. Johnson, bring it closer. He was the architect of a plan to use public money to “balance out” the economically disadvantaged north of Great Britain with its more prosperous south.
Breaking away from the pressures of Brussels had been one of the biggest attractions of Brexit. Instead, the UK is facing a much larger competitor who, like the UK itself, appears to be eager to transform its economies with digital and “green” technology – and more open to using state aid.
Another irony of Brexit is that, alienated from Mr Trump’s one-sided policies, Europe has started to reproduce some of the languages used by Brexiteers in 2016. President Emmanuel Macron of France and others have spoken of the need for “European sovereignty” in the face of a less reliable United States. Mr Johnson made regaining British sovereignty the leitmotif of his negotiations with Brussels.
Britain still has undeniable advantages as it embarks on a new course. Despite the destruction caused by the pandemic, the economy is flexible and resilient, at least when compared to those on the European continent. It was the first western country to approve a viral vaccine while the European Union has been bogged down by the need for its members to contract.
Mr Matthijs predicted that the UK economy would return faster than Germany or France after the pandemic, which Brexiters would attribute to the freedom they would have gained by shaking off Brussels.
Britain’s independence also gives him the opportunity to be experimental in his relations with other countries. Mr Wright said, for example, that the Biden administration might be interested in negotiating a different kind of economic understanding with Britain than an old-fashioned free trade agreement.
“You are well positioned to be the guinea pig for this,” he said.
Britain, after all, has only negotiated one deal unique in the annals of trade diplomacy – one that divides partners rather than bringing them together. The ability to achieve this is a hopeful sign of the ability to reshape, according to analysts.
“The world in June 2016, however, is not the world today,” Wright said. “They know that too, deep down.”