Brexit is one of the most debated geopolitical issues of our time. More than two years after the referendum that resulted in the decision to leave the EU, it is still unclear what the parting conditions will be like. With such high degree of uncertainty, it is difficult to foresee how things will eventually unfold, but one thing is certain: Brexit will have a sensible impact on the UK in the years to come.
Britain’s geopolitics & history
The history and the foreign policy of the United Kingdom have been deeply marked by its geographic position. As an island off the European coasts, not far from France, it was isolated enough to be sufficiently repaired from foreign threats but close enough to be obliged to care about the Continent’s affairs. Since William the Conqueror’s in 1066, no invader managed to land on the British soil. After a long process marked by turmoil and civil war, a unified kingdom of Great Britain was established in the early 18th century. Thanks to its favourable position protracted towards the Atlantic Ocean, it managed to consolidate and expand its colonial territories. Combined with its rich coal deposits and with an institutional system favouring capitalism and technological innovation, this allowed Britain to spark the industrial revolution. Gradually, Britain strengthened its fleet and turned into the world’s leading naval power. The Royal Navy became the cornerstone of its national security and the vehicle of its imperial expansion: its supremacy allowed Britain to impede any invasion from the mainland, but at the same time enabled it to extend its influence overseas and dominate maritime trade. Back then it acted as the “balancer” of European politics: when any given power became too powerful and started threatening its national security, Britain backed a coalition to counter its rise; sometimes intervening directly as it did during the Napoleonic Wars. At the height of its power in the second-half of the 19th century, the British Empire ruled over one quarter of the world and was the first power of its time.
But America’s rise and two World Wars determined its decline. After 1945, Britain gradually lost its immense colonial empire and its industry was disrupted by foreign competition. To ensure its security it joined NATO, the trans-Atlantic military Alliance supported by the US to contain the Soviet Union. On the political and economic level, Britain was initially cautious towards the European Integration project, and preferred to promote its own multilateral institutions like the Commonwealth and the European Free Trade Association. Yet, in 1973 it decided to join the European Economic Community, the predecessor of the EU. Nevertheless, its relations with the EU have always been turbulent; as It opposed several integration initiatives and succeeded in getting exemptions on several issues. In 1984 it obtained a reduction of its transfers to the EU budget after protesting for being a “net contributor”, meaning that the sum of money it was giving to the Union was superior to the funds it received for the implementation of the latter’s policies. In 1992, the UK did not join the Exchange Rate Mechanism and Protocol n. 15 annexed to the 2007 Lisbon Treaty exempts it from any obligation to ultimately adopt the Euro. Protocol n. 19 affirms that normally Britain does not participate to the provisions of the Schengen agreement that abolishes borders controls, a treaty initially established outside the EU legislation but integrated into it in 1997. Similarly, Protocol n. 21 states that the UK is not bound by the EU’s legislation in the context of the Area of freedom, security and justice; unless an exception is agreed by both parties. Finally, Protocol n. 30 affirms that courts cannot judge upon the adherence of the British legislation to the EU Charter of Fundamental Rights, which the 2007 Lisbon Treaty recognizes as having the same legal value of the Treaty itself.
Then, amid a global rise of populist forces opposed to greater social and economic integration, the Brexit referendum took place in 2016. After a long and heated campaign, the vote resulted in the victory of those advocating for leaving the EU. Since then, following the procedure established in Art. 50 of the Lisbon Treaty, the UK has been involved in complex negotiations with the Union to define the terms of Brexit. As of today, the Parliament rejected the plan backed by May’s government for three times; and with a common agreement between the UK and the European Council the negotiation period has been extended up to October 31st 2019, even though PM May vowed to leave as soon as possible. In this context, many voices call for a second referendum or even to simply cancel Brexit, and the future of the UK and even its tenure as a unified state are being questioned.
The challenges of Brexit
The first set of problems related to Brexit is economic in nature. Since before the referendum, it has been widely debated how the UK would perform out of the Union; with opposing and often contradicting opinions coming from the two sides. Determining its impact is still complicated, as the final terms of Brexit remain unclear; yet, a few points seem to be generally accepted. First, leaving the EU will damage Britain’s economic growth. This does not imply a contraction of the GDP, but only that it will probably grow at a slower pace. In terms of jobs market, some sectors are likely to be damaged by losing access to the common market, while those mostly exposed to competition from other EU members are likely to benefit from Brexit. The service sectors is particularly important in this regard: it is a major driver of job creation and innovation, meaning that Brexit could damage it by reducing the inflow of qualified workers from the continent. In regards to public finances, leaving the Union surely means not having to pay contributions to its budget, but estimates indicate that any saving would be offset with a GDP contraction of just 1% compared to the non-Brexit scenario; and the balance would be negative if the loss were greater. Departing would also mean losing EU funds to universities, farming and regional development. A positive aspect of Brexit could be the reduction of regulations deriving from EU legislation, but in some cases regulation and standardization is beneficial. Moreover, those British companies wishing to continue trading with the EU will have to comply with its regulations, with the difference that Britain will no longer have any voice in determining them. All in all, most analyses expect Brexit to have a negative impact on the economy of the UK; even though there are some who disagree. But again, determining its real effects is extremely complicated and a fully accurate forecast is simply impossible, especially as long as the final terms of Brexit are unknown.
Another major point of discussion is the future of Scotland and Northern Ireland. In 2016, two-thirds of Scots voted in favour of remaining in the EU. Scotland has close and expanding trade ties with continental Europe, and its local government is keener of accepting immigration as a mean to balance its aging population. Until now, it seems that Brexit has not increased much the support for Scottish independence, but much depends on the final terms of the agreement: if its terms were contrary to Scotland’s economic interests, then the pro-independence side would surely gain strength and could win in the case of a new independence referendum, an option which is already being discussed. For what concerns Northern Ireland, Brexit could threaten the equilibrium established by the 1998 “Good Friday” peace deal. The region receives considerable funding from the EU, and most importantly Britain’s exit from the Union could translate in the reintroduction of a “hard” border between Northern Ireland and the rest of the island; with considerable economic and social problems. A potential solution is the so-called “Irish backstop”, meaning allowing the area to remain in the EU common market and custom union until a definitive settlement is reached. Yet, there are fears that Brexit could end up reviving violent conflict in the area after more than 20 years.
As seen, it is nearly impossible to determine how Britain will look like after it leaves the EU. Surely, while it can abandon the Union, it cannot escape geography: it will remain a European country and will have to work together with its partners on the Continent on common issues such as trade & finance, terrorism, transnational crime and more. But this means that while it would recover part of the sovereignty it ceded to the EU when it decided to join, in practice it will still have to comply with many European legislation without being able to influence it any longer. Of course, the UK can try balancing the negative effects by creating deeper ties with other partners like the United States; but as long as the wave of protectionism initiated by Trump continues, it will be difficult for the UK to reach an advantageous deal. Yet, there is another theoretical solution: as the Arctic ice cap melts, the Northern Sea Route becomes a viable trade course for trade with Asia and its huge markets like China and Japan; thus opening new opportunities for the UK. The exploitation of the Arctic’s resources is also an option to boost the British economy. However, this process is still in its early stages and it will take decades to fully develop the Arctic’s potential, without forgetting the dangers for its delicate environment.
To conclude, it is hard to anticipate what the impact of Brexit will be. Many supporters consider it as the only way to restore Britain’s sovereignty and pursue its national interest in full autonomy, but geography makes it impossible for the UK to simply isolate itself from the continent. Therefore, it will need to find a new equilibrium for the post-Brexit period, but this will be a long and complex task that might even threaten its unity as a state.