As the UK is still waking up to a radically changed political, social and economic outlook, we asked Prof. Leif Johan Eliasson for his take on the Brexit referendum. The author of America’s Perceptions of Europe (Palgrave Macmillan 2010) offers a sobering perspective on transatlantic relations in the face of populism, regionalism, and domino effects.
Barack Obama emphasized that Brexit would put UK ‘back of the queue’ for trade talks; how do you see the transatlantic relationship between the UK and the US developing in the face of the Brexit vote?
The future of the US-UK relationship depends on several domestic developments in the US. Whether we see a Clinton or a Trump presidency they will be beholden to certain constituents (demographic and interest-based), which have large anti-trade memberships. For the Democrats it is labor unions, which have never seen a trade agreement they like, and who carry an outsized influence in the party due to their ability to mobilize members and blue-collar workers. The latter, irrespective of union membership, are increasingly skeptical of globalization and free trade, which they blame for lack of wage increases and a depressed labor market . One must remember that the US has the lowest labor participation rate in 38 years, and the unemployment figure is low because a substantial percentage of the working age population has ceased looking for work, and thus no longer count as unemployed. Young democrats favor free trade and see globalization as a benefit, but this is at odds with the aging party leadership. The blue-collar anti-trade sentiments permeate the Republican Party as well, and Trump supporters are overwhelmingly found among those lacking a college degree and/or older Caucasians (over 55). While the party is traditionally in favor of free trade, the leadership also finds itself at odds with its grassroots, working class, southern supporters, who are increasingly isolationist, and like their Democratic peers, blame globalization, and thus trade, for their plight. Until the domestic labor situation improves – given the added impediments and repercussions stemming from Brexit that may take several years – there will be little appetite for another trade deal, irrespective of partner. One should also not forget that the Office of the US Trade Representative is one of the smallest, and most over-worked government departments, and dealing with a partner who lacks the basic trade negotiating skills after not having negotiated a single trade deal in over 40 years, is not a very enticing task for an overstretched office. Thus, the UK will find itself having to wait several years, at best.
Within hours of the result being announced, a second breakup started; Scotland has re-initiated an independence referendum from the UK to stay in the EU, Northern Ireland is discussing the same idea, and a (more informal) petition among Londoners to lobby for an independent London city-state reached over 100.000 signatures within a day. Is this the beginning of a Europe of regions?
I do not believe it will be, technically and legally. Due to the situation in Spain (Catalonia, the Basque region), and to a certain extent in Belgium, Scotland will have to find a path to independence before applying for EU membership. The internal EU emphasis on regions has grown over the past decades, and that may continue, partly as an outlet for various forms of nationalism, and partly due to better marketing of regions. However, fears of the ‘snowball effect’ (as emphasized several times by Spanish leaders) will prevent Scotland from being allowed to apply for EU membership.
The EU referendum campaigns made it painfully clear that populism is on the rise in Europe as much as in the US, with Donald Trump’s recent success. How can we understand, and combat, the spread of populism across the West?
Those most affected by the lack of social mobility and stagnant wages (those without a college degree, often the lower and middle class) blame globalization and immigration for unfair competition, outsourcing, and lack of opportunities; this despite the benefits of affordable goods and services that result from global supply chains, comparative advantage, and technological advances. Yet what most politicians fail to realize (especially in the US and UK, and to a certain extent in Spain, Italy, and Portugal), is that the inability to restructure domestic education and training to meet the demands of global competition is fuel for the opposition. The longer we postpone massive investments in retraining, apprenticeships, university access (critical thinking skills is key to being adaptive and mobile in the new economy, as emphasized by the CEOs of leading technology and service companies), the more the populist message becomes. It is appealing to those desperate for a scapegoat, and the like of Johnson and Trump provide the message very well. Facts take a backseat to myths, distortions, lies, and wishful thinking; it is not only the ‘easy way out’ in the eyes of the recipient, it becomes the truth. A much greater investment in people is needed, along with responsibilities and requirements on recipients (i.e. the Danish or Dutch model). However, for a number of domestic institutional and social reasons I am not very optimistic that this will occur in any of the countries mentioned above.
Unlike many European states, the UK, like the US, has a ‘first-past-the-post’ electoral system. In her response to Brexit Caroline Lucas (MP for Brighton) advocates proportional voting as a way of truly ‘handing back control’ to the people. Do you agree?
Americans are also very familiar with the down-side of the present system, as it means that in presidential elections only 10-12 states really matter, the rest are a foregone conclusion as to which party candidate will prevail. Yet people by and large accept the system, and it protects the two large parties from a third or fourth party competitor. The British voted down reforming the election system in 2011, and I doubt there is much appetite to either repeat a referendum in the near future, or for parliament to address this issue since the Brexit vote was held according to one-person-one-vote.
Brexiters are hoping for a Domino effect, leading to other states breaking away from the EU. How would you evaluate this scenario?
If the post-Brexit economic situation in Britain deteriorates I believe it will take some wind out of the sails of the French and Dutch anti-EU parties. Citizens who pay support these parties will see think twice if British house prices fall, unemployment rises, and savings erode. One must aglow remember that the internal British divide on the EU has simmered for over three decades, thus making for a different situation than in France, the Netherlands, or the Czech Republic. Look at euro-skeptic Sweden and Denmark, polls show overwhelming support for remaining in the EU due to the economic benefits, and many young people across Europe have personally seen, or experience on a daily basis, the benefits of the internal market and freedom of movement. So, in the near future I do not see the potential for a domino effect.