Lots of people are shocked by the Brexit vote, which saw citizens of the United Kingdom vote to leave the European Union.
I was surprised. I was a Remain supporter. (My parents were born and raised in the UK and all my relatives other than my sister’s family live in England and Wales. I am a British citizen as well as being Canadian.)
I was hoping remain would win because it guarantees access to the huge European market, which is why Britain joined the European Economic Community in 1973. I remember as a child staying with my grandparents in Bexhill, Sussex, and seeing their “Vote Yes” posters in their house and windows. My mother’s side of the family is generally pro-Europe. My father’s family was more mixed, with a healthy degree of skepticism among some.
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But I had very mixed feelings about the outcome. The EU has been pretty clear that it wanted to increase “integration,” which is the term for the bureaucrats in Brussels taking control of formerly national matters to impose EU standards and approaches. To me the vote was a choice between staying tightly bound to the biggest single market Britain sells into, and keeping control of Britain’s destiny and development. I was a reluctant Remain supporter.
So I wasn’t shattered by the result, as I know some of my family is. I see two to five years of economic hardship coming out of this, almost certainly a recession and maybe something close to a crisis, but then probably a much better future in the long term. Britain is a far more outward-looking global citizen than the rest of Europe, is a big believer in trade, and supports science and rationality in policy.
That’s where I see the opportunity for Canada, the U.S., Australia, New Zealand, India, South Africa, Japan, China – anywhere but EU Europe. Being part of the EU meant being part of a big free trade zone, but also being held back from the rest of the world market by the EU’s protectionist policies. Now Britain can get out and make better trade deals with non-EU countries than was possible within the EU.
Yesterday I did a quick hit on the possible impact of the Brexit on CETA – the Canada-EU trade deal. See it and our big package on CETA here. No doubt in the short term the Brexit makes Canada-EU trade improvements much less likely. The last thing Eurocrats, continental politicians or the UK government will be spending their time on in the next few months is a piddly Canada-EU trade deal. (The U.S.-EU trade deal talks are likely dead, as well.)
But Canada does almost as much trade with Britain alone as with the rest of the EU, and if we and the Brits can form a better bilateral deal than we had in CETA, that relationship could grow greatly. Before entering the EEC Canada did lots of agrifood trade with the UK. Some of that withered under European tariffs and trade obstacles. So too did some trade with the Commonwealth subside for the UK when it was taken behind European walls.
Now that can be righted, if the UK and countries like Canada want to grab the opportunity. There’s a lot of antipathy for giant trade deals like CETA and TPP, but bilateral deals don’t tend to be nearly as controversial. If the EU and Britain end up in a trade war, I’d be happy seeing Canadian wine stealing some shelf space from French and German wine.
The reason I’m optimistic about the long term is that England just doesn’t seem to fit the bureaucracy-friendly, anti-trade, manipulative traditions of the EU or some of its members. The EU has always been a bad cultural fit for England, and since the EU seems determined to become an ever-more integrated superstate, the UK probably had to leave at some point, and there would never be a perfect time to go. (Scottish people generally feel differently and will probably try to separate and join the EU, which would be sad but not economically damaging for England and Wales.)
So now is the time to lure the UK back into the English-speaking world, and the broader world economic community. We’re in for a rough patch in the next few years, but in the end, building more trade with Britain might bring more returns than banging our heads endlessly against that imposing EU wall.
