Brexit Means a Three-Tier Europe
by
Wikimedia Commons

Prime Minister Boris Johnson’s resounding win in last week’s United Kingdom elections is the rough equivalent of winning the U.S. presidency by a margin of 10 percent. That’s a landslide by anyone’s measure.

Johnson campaigned on the slogan of “Get Brexit Done,” adding a few expensive promises to seduce wavering constituencies. Johnson’s win is the biggest for the Conservative Party since 1987, when Margaret Thatcher led that party to its third consecutive general election victory. It’s also the worst defeat the Labour Party has suffered since 1935.

Many pundits are rushing to claim that Johnson’s win should teach the Democrats not to nominate a far-left fringe candidate such as Elizabeth Warren or Bernie Sanders. Others point to the UK election result as proof positive that President Trump will be reelected next year. They are all reading too much into the UK result because there is no U.S. issue comparable to Brexit, which has dominated UK politics for over three years.

Johnson plans to get the newly elected Parliament to quickly endorse the Brexit deal he’s negotiated, enabling the UK to exit the EU at the end of January. He will do that, but that’s far from the end of the matter. Both domestically and with the remaining EU members, Johnson faces great difficulties that will make it very rough going for him in 2020.

Domestically, Johnson has to face the fact that under his deal with the EU, Northern Ireland will effectively be split from the Irish Republic even though there will be no “hard border” between them. Irish republicanism (small “r”) is still a strong force demanding unification of the two. But that may be the least of Johnson’s problems.

Nicola Sturgeon, leader of the Scottish National Party, is already asking – on the basis of the 2016 and 2019 Scottish votes in favor of remaining in the EU – for a second Scottish independence referendum. In the last one, held in 2014, Scots defeated independence by 55 percent to 45 percent. Sturgeon wants another referendum but won’t get permission for it from Johnson’s Parliament. She will continue to oppose Johnson’s political moves and can be a significant obstacle to them.

That’s not the half of it.

When Brexit occurs in January, there will be an interim period of 11 months in which the UK will remain in the EU customs union and in which the EU and UK are supposed to work out a trade deal. French President Emmanuel Macron said last Friday, “If Boris Johnson wants a very ambitious trade deal, there has to be very ambitious regulatory convergence. Be my guest.”

Such an “ambitious regulatory convergence” would mean that UK exports had to conform to EU regulatory standards, the freedom from which is one of the principal differences between real and phony independence from the EU. That’s because regulatory convergence also ties the UK’s hands in making other trade deals outside the EU. Those trading partners, too, would have to include compliance of imports and exports with EU regulations.

That would effectively bar any UK trade deal with the U.S.

Former German Defense Minister Ursula von der Leyen, who is now the president of the EU Commission, is already urging that period for negotiating a trade deal to be extended for an indeterminate time, leaving the UK under the EU’s jurisdiction on trade. Johnson will get a good trade deal from the EU, but it may take much longer than he expects.

And he may not get one at all. If, as he says, Johnson refuses any extension of the negotiation deadline, the EU may be unwilling or incapable of reaching internal agreement on the terms. The EU’s agreements with any outside entity have to be agreed on unanimously. That means if no agreement is made by June or July, there may not be time to get all the members in line. Thus, Johnson may yet get the “no deal” Brexit he clearly wants, and that will free the UK from the EU’s shackles suddenly.

There is considerable motivation for the EU to make a deal. In 2018, 45 percent of UK exports were to the EU, and 53 percent of its imports were from the EU. Neither side can afford a major disruption of those trade volumes.

Forecasting the demands of Macron and von der Leyen, President Trump has promised a quick trade deal between the U.S. and the UK, presumably to be negotiated in the 11-month period between January and the end of the EU negotiation period in December 2020. That and the huge volume of UK–EU trade will give Johnson a great deal of leverage in his EU talks.

Beyond trade, it is becoming very clear that Brexit will produce a three-tier Europe: a stronger UK and a two-tier much-weakened EU, which, in turn, means a weakened NATO.

Bolstered by greater trade with the U.S. and offsetting, in all likelihood, a reduction in EU trade, the UK’s independence will make the UK richer and even more dependent on the U.S. for defense than it already is. The historic “special relationship” between the U.S. and the UK will grow stronger, assuming that Trump is reelected, because the EU, always reluctant to support U.S. foreign policy, has retarded that relationship significantly (as did former President Obama).

There has, for decades, already been a two-tier EU. The richer nations, France and Germany, have caused EU polices to follow the path of appeasement of Iran, Russia, and China. Franco-German support for the Obama-negotiated nuclear weapons deal with Iran is undiminished. Germany’s dedication to making Europe dependent on Russian natural gas (demonstrated by the two “Nordstream” pipelines) is strident.

Trump’s threatened tariff of 100 percent on French wine and cheese will increase the strain on France’s economy.

The poorer EU nations — Italy, Greece, and others — have been a drain on EU financial resources for decades, and that drain will only increase.

There is also a Franco-German rivalry in EU politics. Merkel wants to expand the EU to include Baltic nations, but Macron vetoed an attempt to do that earlier this year. Nevertheless, the two will continue to build the EU’s power, and their nations’ power within it, at the expense of NATO.

While the U.S. and UK rebuild their “special relationship,” France and Germany will continue to deconstruct NATO. Macron said recently that NATO was “brain dead,” which, unfortunately, is close to the truth because, in large part, of the policies he, Merkel, and their predecessors have pursued.

For the U.S., the coming three-tier Europe will present complexities. We can and should do everything we can to strengthen our special relationship with the UK in trade, defense, and political policy. Germany and France will do what they can to frustrate that, but Trump’s tariffs on French wine and cheese will pressure the French to tone down their obstruction.

Germany is highly dependent on auto exports to the U.S. In 2018, that amounted to about 690,000 cars worth $31 billion. Trump has threatened tariffs on European car imports but has never put them in place.

The president should think about putting a tariff on German cars on a sliding scale that would vary with their investment in their own defense. If, for example, there were a 25-percent tariff on German cars and the tariff were reduced by 5 percent for every half-percent increase in German defense spending (measured against GDP), that might change their minds.

If Trump is reelected, he should undertake an examination of the NATO treaty. It needs to be modified to increase our allies’ defense burden. Those who refuse should fall outside our Article 5 obligation to defend them. The mere suggestion of renegotiating that treaty might be enough to wake up the deadbeats of NATO, even among the poorer second tier of the EU.

We need a stronger NATO, one that can make the Article 5 commitment to mutual defense respected again by the aggressor nations. If Trump is reelected, that should be one of his top priorities.

o
Sign Up to receive Our Latest Updates! Register

Be a Free Market Loving Patriot. Subscribe Today!