Brexit and Transatlantic relations: An American’s view

19 September 2016

Americans generally had become bored with Europe. We are fixated with the rise of China. There were tragic events in Europe that shocked the world — the attacks on Paris’ Charlie Hebdo and Bataclan and Brussels’ Zaventem Airport, the Greek debt and mass migration crises. But whether the Europe we Americans had gotten used to for almost two generations — partner, source and destination of transatlantic trade and investment, continent without borders — would fragment; that the partner with which we had an emotional as well as national security bond would no longer be there as an increasingly strong and unified whole — that was inconceivable.

The future of the Europe Project, the largest positive outcome from the Second World War, is in doubt. The forces of disunity are gaining ground both in the United States and in Europe. In the States, part of the national debate is whether to disengage from the rest of the world and concentrate on our internal needs. No more trade deals. Fewer immigrants. In Europe the sentiment for disengagement is both external — limiting immigration from outside, and internal — from the Eastern half of the EU to the West. There is also an element of exhaustion from what many Europeans clearly see as overreach by bureaucrats in Brussels  — too much regulation, too little local autonomy.

This is a time for extraordinary leadership, but of a positive, even visionary kind. Right now, that seems to be in short supply. In Britain, David Cameron put at hazard his country’s economic and political future, lost, then self-decapitated his government, and finally declared that “Leave” was irreversible. Boris Johnson and the Leave crowd behaved irresponsibly, not understanding or planning for the consequences of what they were doing. The current UK Prime Minister Theresa May repeats the mantra “Brexit means Brexit”, accepting Brexit as an immutable fact without a clear plan for what will replace its membership in the EU.

On the continent, tough talk, rather than the crafting of creative solutions, was the order of the day, although some of that has eased. It was understandable for Angela Merkel and François Holland to opt for that path, with Britain unmoored but not yet definitively severing its European ties, and with nationalist, nativist parties in member states seeing opportunity in Brexit, not appreciating the potential for calamity. Bruised, Europe’s most prominent leaders do not seem to be identifying positive options. They certainly have not concentrated on a rescue mission for the Europe Project, beyond making an example of the UK to try to reduce the amount of oxygen that sustains insurrectionists within the remaining EU member states. A plan for a coordinated EU military force is not an effective response to resolving Brexit in a way that maintains European economic integration and assures economic growth.

Nor is there clarity from Washington. As with Syria, so it is with Brexit. Would American involvement help or hinder finding a solution? It is complicated. How could the United States intervene? Isn’t this really Europe’s business? What course should be taken? Inaction or engagement?

“The question whether it is possible and worthwhile [to preserve] the union of the [European] States must be speedily decided some way or other. Those who are indifferent to the preservation would do well to look forward to the consequences of its extinction.” Good advice for London, Brussels, Berlin, Paris, and Dublin today. The quotation is entirely apt, but not current. It is from a letter from James Madison to James Monroe written in April 1787 (with the obvious addition of the words “European” before “States”). It is advice that should have been heeded by Boris Johnson and his former colleagues in past months, but looking forward it is even more relevant today for those surveying the wreckage and facing the challenges left by the British vote on June 23rd of this year.

One good lesson to take away

Representative government does not mean abdication of personal principles by elected officials, putting to referendums the most complex questions of national direction. That is what government elections are for. Where was the mother of all parliaments in all this? Three-quarters of the UK parliament members were said to be for remaining in the EU. Why were they absent without leave? If they actually believed in their principles, why can’t they take a more constructive path now in their approach to Europe, even as businesses engage in contingency planning to move their future investments to anyplace but England? Are the British Parliament and the European Council really going to abdicate their responsibility for Britain’s future relationship with Europe in favour of a long, drawn-out discussion by civil servants of whether poultry and tens of thousands of other goods and services are still going to be traded freely across the English Channel, along with a myriad of other non-trade related questions? That is where drift takes Britain and the EU as centrifugal forces continue to tug at Europe.

What is needed is a clear grasp by all concerned of the central objective past the current muddle. It must be a vision of a reformed, reinvigorated European Union. This will require as a top priority addressing the very real needs of those caught out by globalisation and technological change. This is a precondition for moving forward, but it not a substitute for sensible, rules-based global integration — not least to be found in proceeding with renewed dedication towards a strong positive conclusion to the Transatlantic Trade and Investment Partnership (TTIP). The new international trade agreements are not the enemies of those hurt by the forces of irresistible change; they are companion pieces to necessary domestic policies.

What can Washington do?

President Obama should offer to all of Europe — the EU of 28 (counting Britain in) — suspension of all tariffs, on a “ready when you are” basis. It could be rejected as American meddling in a European squabble. But the national interests of both Europe and the United States require a change in the current direction of European dissolution. Can the US help change the terms of debate? Just possibly. At least there could be a more enlightened discourse among leaders over what the future of Europe should be.

Yes, I would like the negotiation of TTIP with all of its complexity to move forward, but there has to be a European partner on the other side of the table from the United States to accomplish that. And yes, anything done on trade should be accompanied by a vision for domestic policy reforms that restore the promise of a brighter, more broadly shared economic future both in the United States and in Europe. This is a time for positive action and resolve. History should not write that leaders stood by as the European Project began to dissolve.

Alan Wm. Wolff is Chairman of the National Foreign Trade Council.