Professor of Politics and International Relations, University of Kent
US Columnist, The Financial Times
Visiting Professor, Georgetown University Law Center
As the United Kingdom moves closer to an exit from the European Union, questions remain about how Brexit will influence Britain’s role on the world stage. Speakers discuss the implications of Brexit for the European Union, internal UK politics, and relations with the United States.
MYROW: All right. Thank you, everyone, for coming. Welcome to today’s Council on Foreign Relations meeting on “British Foreign Policy Post-Brexit.” I’m Steve Myrow, and I’ll be presiding over today’s discussion.
We’re lucky enough to have, joining with us via videoconference Matthew Goodwin from the U.K; to my right, Jennifer Hillman from Georgetown University Law Center; and Ed Luce from the Financial Times.
So as I was thinking about this today, coming in, I was thinking it’s really nice for once, with everything going on in the United States, to focus on someone else’s internal problems for a change, and that, as we think about it, that in many ways, we have—we’re now actually 330 days away from exit day, and yet we have absolutely no idea how we’re getting from point A to point B. I like to always tell people that in Washington point A to point B is never a straight line, and that definitely appears to be the case in the U.K.
And what I think we want to focus on today is explore those internal Brexit politics because, while at the Council we’re interested in the foreign policy dynamics and where this is all going after Brexit, in many—you know, as we know, all politics are local, and what happens with the internal Brexit politics is in many ways going to determine what the prospects are for the foreign policy framework.
So let’s start there. In terms of Prime Minister May and the U.K. more broadly, they’re both in a pretty tight spot right now, and just within the last week we’ve had some personal churn in her Cabinet which has made a more even split between Brexiteers and Remainers—or some people refer to them as Remoaners. And so, as I—I’ll start with our man on the ground in the U.K.
Matthew, can you give us a little layout of where the internal politics stand right now and the standoff that May faces in her Cabinet?
GOODWIN: Well, good afternoon, and thank you for inviting me along to the Council.
You may be aware that we’ve actually just had a set of local elections over the last 24 hours, which has given us even more evidence to chew on with regard to Brexit. What we’re seeing in the U.K., I would suggest, is an increasing polarization between pro-remain voters and areas—loosely this relates to the middle class, Millennial graduates, and the more urban big cities, and on the other hand, more socially conservative, working class, smaller towns, but very pro-Brexit.
And it’s worth just saying at the outset that the Conservative Party, over the last 24 hours, has actually done very, very well in pro-Brexit areas of the country that gave at least 60 percent of the vote to leave. And that’s significant in terms of that internal politics question that you asked because I would argue that, on three layers now, the Conservative Party is being pushed increasingly toward a hard Brexit. Within the Parliamentary Party there is now a large number, majority of MPs that view single-market membership as being incompatible with the referendum result. The Conservative Party membership, by the way, only 24 percent of conservative members want to stay within the single market; around the same figure want to stay within a customs union, but the Conservative Party electorate—the most important part you might suggest if we now assume that politics is back in a big way—the vast majority of Conservative Party voters now are fiercely pro-leave—about 70 percent, and that is going to have all kinds of implications on the key events that are coming up over the next year.
We’ve got, obviously, the customs union debate where most conservative voters or members do not want to be in the customs union, but we’ve also got the Council meeting in June, and we’ve got that crunch parliamentary vote in the autumn. So all arrows, in my mind at least, point to the Conservative Party being pushed further to the right on this issue.
MYROW: Ed, do you have anything to add in terms of where we stand on the internal politics, particularly with respect to how you see the standoff over the trade union issue—or the customs union issue this week?
LUCE: Well, Matthew is the person on the ground, so I’ll defer to him in terms of the—well, on everything basically. But you mentioned that it’s hard to get from point A to B in the American system and the British system. This isn’t really point A to B. This isn’t a line; this is a circle. It’s getting back to where we started because there is no consensus on what kind of post-Brexit deal, even with the conservative—even within the Cabinet there isn’t a consensus. Some will not accept customs union, and some will not accept anything less than customs union. And so Theresa May is stuck between a rock and a hard place. She doesn’t have the kind of leadership skills to force those who might be wavering, either on the hard Brexit side of her Cabinet—the Boris Johnson, Michael Gove types—or on the more moderate side of her Cabinet—the Philip Hammond, Amber Rudd—who has just left the Cabinet—types to agree to some kind of compromise.
And so this isn’t traveling in a straight or even a sort of zig-zaggy, diagonal line from point A to B. This is coming right ‘round in a circle. It’s as—it’s as stagnated, I guess. There’s a stalemate—stalemated rather—as you can possibly imagine a parliamentary system being, and it’s very hard to see what’s going to give.
MYROW: So Jennifer, as we are—when we think about Brexit, in many ways the issues that brought us here are immigration and trade, and so with this standoff over the customs, give us a context of what are the scope of problems that—there’s what needs to be addressed, and there’s what they would like to address. What really needs to be addressed?
HILLMAN: Well, obviously, the critical thing on the trade front is what are you going to do about the border between Northern Ireland and Ireland, and that is again, as I would say, I totally agree, coming back full circle.
And just to, again, get a sense of context, I mean, when we think about it, OK, the U.K is the world’s fifth largest economy, but within the EU, the second largest economy, 16 percent of the GDP of the European Union is in the U.K., and very importantly for the trade issues, 42 percent of all of the U.K.’s exports of goods and services are going to the EU. So the trading relationship between the EU and the U.K. is really what is at the heart and soul of sort of this debate and what it means.
And the problem for Theresa May has all along been what do you do about that border between Ireland and Northern Ireland because once you Brexit, you’ve got Ireland that will remain a member of the European Union, and you’ve got Northern Ireland that is now going to be not in the European Union. And under the treaties of the European Union, you must have a border that judges goods moving across an EU to non-EU border, meaning you have to have a way to put on tariffs, you have to have a way to control the movement of persons and services, and more importantly for the U.K., all of the regulatory issues that go along with the movement of a good.
So the question becomes how do you put a border between Ireland and Northern Ireland without completely upsetting the peace accords that came about after the result of the end of—as they call it—the troubles. And this is really the heart and soul of the problem. It is 310 miles of border, if you look at all the crags and crannies between Northern Ireland and Ireland, with more than 400 crossing points, and nobody has been able to figure out how to get around that.
So what’s on the table right now, the European Union put forward a withdraw proposal, which was their text, their proposal for a way to fix it, which effectively creates a border along the Irish Sea, meaning treat Northern Ireland and Ireland as sort of one area and allow the free flow of goods across that border, which is complete anathema to Theresa May and particularly to the members of the DUP that are now part of her governing coalition. They cannot live with the idea that you would separate Northern Ireland from the main part of the U.K.
So what Theresa May has put on the table initially was this idea of a customs partnership where somehow the U.K. would collect all the tariffs on behalf of the EU and would do all the clearance of the goods on behalf of the U.K., and then ultimately pass that along. That failed this week in her Cabinet, did not get support.
The second option that they are looking at is what they call a customs facilitation approach where we’re supposed to use, you know, high tech—you know, everybody is going to have the equivalent of an E-ZPass system in their car, and we’re going to just measure all these goods, et cetera, through technology, and yet, everyone in Brussels is basically saying this will not work.
So we’re still at this very difficult place where the actual language that’s on the table is for this division along the Irish Sea, and everything that has been done in the U.K. Cabinet has just not got sufficient support. And we’re going to come right back around to the ability to solve the Ireland-Northern Ireland problem is what could take Brexit down, if you will.
LUCE: And just to sort of give a sense of the hopelessness right now of that picture, the second customs fudge that you described—maximum facility, maxfac (sp), which is—doesn’t have—doesn’t command support, is now known as clusterfac (sp). (Laughter.) It’s not a solution.
MYROW: So we—I think it’s very easy in these situations to talk about what’s not going to work, but something has to be done. So, Ed, what—in terms of a fudge—talk about what a fudge looks like here. How do they get past this Gordian knot?
LUCE: Well, I’ll—in a minute—defer to Matthew, but to give my tuppence—on that subject—but to give my tuppence worth, look, we’ve got to see May coming up with a form of words that is less than Norway but more than Canada, and to explain, Norway is part of the single European market, which is unacceptable to the Boris Johnsons, et cetera. Canada is—just got a bilateral trade deal with the European Union, which is unacceptable to the Remainers. She has got to have a fudge in between that includes de facto customs union to get through her Cabinet. If she gets it through the Cabinet, it’s then got to get through Parliament. But it also—most importantly—has to pass the European Union.
I mean, there—we’re talking about negotiations going on here. There are no negotiations, essentially, between Britain and Europe happening. All the negotiations are inside Britain; and not just inside Britain, they are inside London; they’re not just inside London, they’re inside the Conservative Party between people who don’t like each other, who don’t trust each other, who think Theresa May is the worst leader possible except for all the others. That’s the kind of climate we’re talking about here.
Matthew, I think, though, can give a more authoritative answer to that question.
MYROW: And to that point, Matthew—
LUCE: And indeed Jennifer.
MYROW: —let’s talk about May for a second because it sounds like no one really loves May, no one wants this job—at least until after exit day—so how safe is she between—you know, over the next 330 days? But give us a sense of her range of maneuverability and if—you know, let’s talk about this continuity. If she was to go, Jacob Rees-Mogg—is he a real possibility?
GOODWIN: Well, I think, according to all reports of the Cabinet meeting on Wednesday, which was, of course, when the infamous moment happened where our new home secretary, who replaced Amber Rudd, Sajid Javid, effectively cast the vote against Theresa May’s customs partnership model, thereby giving the room over, in effect, to the Eurosceptics.
According to all reports, Theresa May was—and I quote—“visibly shocked” that she had lost the room. That moment may yet come to be seen as perhaps more significant than we even appreciate it is now. We may be seeing the beginnings of a stronger Eurosceptic turn, perhaps within the Cabinet. We’ve seen Jacob Rees-Mogg and the ERG group, which is 60 strong, beginning to mobilize very vocally around this argument that there cannot be any form of a customs union that would jeopardize what Brexit is really about.
So, look, I describe Theresa May as, you know—do you remember those “Die Hard” films where at one point Bruce Willis would grab somebody who had already been shot, and he would hold that person up as—(laughter, inaudible)—he’d run across and save his life. Theresa May is that body that is being dragged along—(laughter)—and, (in floating ?) up the bad political capital from Brexit, you know, and inevitably she will go. The question is who will replace her.
That will almost certainly be a Leaver. The Conservative Parliamentary Party is now very pro-leave. That means that Jacob Rees-Mogg has a very real chance. The two most popular candidates, according to Conservative Party membership surveys, are Boris Johnson and Jacob Rees-Mogg, so those are the two—currently the two top contenders.
I think now everything is going to happen very quickly. The next two weeks, Theresa May will have to bring back to the Cabinet subcommittee the new customs proposal. If that is signed off within the Conservative Brexit subcommittee, that will then conceivably go forward to the European Union, who may then decide, you know, whether that is a credible plan or whether it is—as they’ve described the maximum facilitation agreement—a unicorn model, something that simply isn’t realistic and in line with current regulations, and so forth. So there are—you know, the chances of a hard Brexit have increased significantly over the last two weeks, and they may yet increase even further.
The last point that I’ll say on this, though—however, is there’s nobody currently with the Conservative Parliamentary Party, at least, who seems desperate to grab the wheel. Another movie analogy might be Speed, where the bus is hurtling along at 150 miles an hour. There is no Keanu Reeves within the Conservative Parliamentary Party that wants to take the wheels, as yet, because everybody knows the Conservative Party, as Edward just mentioned, is completely divided down the middle on this issue.
It may well be that Theresa May brings that customs proposal and decides that the only way to get that through Parliament is to rely on support from other political parties, thereby sidelining the Eurosceptics, and that is a thought that I’ll leave with you, something to consider.
MYROW: Do you want to jump in, Jennifer?
HILLMAN: I was only going to add that, you know, this underscores how significant the timelines are here because, again, it’s March of next year where the Brexit actually happens. The perception is that you are going to need whatever this withdrawal agreement is to be finished by at least October of this year in order for it to get through the European Union’s process in order to be done by March 29th.
Again, this agreement is out there in draft for those of you that are really into it. It comes in with certain sections in green that have sort of been agreed to, and other parts in yellow that are close to agreed to, and the remainder of it in white, meaning it’s still under negotiation. And I can tell you well over half of it is still under negotiation. So we are a long way from even having an agreement on the withdrawal itself. And that only covers this very limited number of issues that used to be called the divorce issues—how much money will the U.K. continue to pay into the EU budget, what are we going to do about all the EU nationals that are living in the U.K., what are we going to do about the U.K. nationals living in the EU, and what are we going to do about Northern Ireland. That’s all that the withdrawal agreement really covers.
And then what it says about everything else—meaning what’s the economic relationship going to be with Europe down the road, what’s the economic relationship going to be with all the other trading partners—that’s to come later, and that’s in theory supposed to be done and worked out during the transition period, which is going to occur between March the 29th of next year and December of 2020.
And as a former trade negotiator, I will tell you good luck getting a trade agreement done in less than 18 months. It is not going to be possible for the U.K. to have in place its trading relationships with the EU, much less anyone else, by December of 2020, particularly if we’re still fighting over the withdrawal agreement up until the end of this summer. I mean, we needed to have already been moving on in order for these things to come about. So the timing becomes more and more urgent as each day goes by.
MYROW: And not that it’s not complicated enough already, but as Ed pointed out so rightly, it takes two to tango here. We’ve been very much focused on all the problems internally with the U.K., but what about the Europeans’ view on this, and there’s no monolith there, either.
LUCE: There isn’t. I mean, there are 27 members.
The interesting thing about how the Europeans have changed in the last couple of years since Brexit actually happened—the referendum actually happened, is that the—you know, there was—a portion of Europe was like, good riddance, you’ve been slowing us down, you’ve been vetoing for too long, you’ve never been—you’ve been half in, half out. And there’s an Anglophobic portion in France that was like, really good riddance, you know, whatever you—you’re history, we want you out; and the sadder sort of German perspective which is it’s a great pity, but if you have to go, you have to go.
I think that mood has changed now to genuine alarm that here is this great democracy ruining itself, it’s entirely self-inflicted, showing no signs of resolving its internal—in fact, they’re deepening, as Matthew pointed out, and that this isn’t just a sad spectacle to watch in the context now that you didn’t really have two years ago of worry about liberal democracy in Europe—concerns with Poland, concerns with Hungary—but also in the context—look, if Britain is going to do itself this much damage, it’s going to wash over to us. This is going to destabilize Europe. You know, they’ve got a lot of problems to deal with, as I mentioned Poland, I mentioned—I mean, migration, of course, is a huge one. And, you know, to have an imploding Britain on their hands is not a good thing.
One other point I’d make in connection with that—because that’s a potential silver lining here—is that Europe is going to have more appetite to give Britain leeway and perhaps have extensions of deadlines than it did a year or two ago.
The one other point I’d make here is that, you know, Britain might not—Theresa May might fail to get a bill through Parliament, so Britain might flunk out with absolutely no deal and in complete legal limbo land next March. Then there might be a general election, because she would lose the vote of confidence of the House of Parliament, House of Commons, and Corbyn might win. And we would then have a government of actually another Brexiteer, but a sort of hidden one, led by Jeremy Corbyn, with whom the Europeans would then have to negotiate. They don’t want to negotiate with Corbyn. They don’t want to pull the plug on Theresa May’s career for that reason.
So, if there is a silver lining, it’s that things have got so bad that Europe’s actually going to pick up some of the slack Britain is incapable of creating for itself right now.
MYROW: So we—Jennifer?
HILLMAN: And for what it’s worth, you see that a little bit, I think, in the line that the European Union has always had to draw where, if the perception is that they give the U.K. too good of a deal on Brexit, then the concern is then you’re going to have Grexit, Nexit—you know, every other member of the European Union saying, I want that deal if you’re going to give that much to the U.K.
You have seen that line move a little bit—
HILLMAN: —where the perception is that this has been so perceptively ugly for the U.K. that you can give a little bit more and it actually won’t necessarily entice the Netherlands or someone else to come along and decide to go down this same road.
LUCE: Quite right.
MYROW: So in the last few minutes—
GOODWIN: Can I—
MYROW: —last few—oh, go—jump in, Matthew.
GOODWIN: Sorry, yeah. Thanks.
Just one quick thing on this parliament vote in the autumn because this is a very important crunch moment in the Brexit timeline. Let me just put forward my view on this. I think Theresa May will win that vote and I’ll tell you why. She is effectively going to bring the deal to Parliament. So let’s just park this customs union issue, and let’s assume there is some kind of fudge that keeps the wheels turning. And we get the European Council meeting in June, and we get through the next meeting in October. And Theresa May brings back this agreement to Parliament and they can either vote for it or they effectively vote against it.
The reason I think she will win that vote is because it is not entirely clear—yet, at least—what you would be voting for if you voted that down. And I think the Labour Party will probably make a big hurrah about applying five or six tests to make sure that this is the Brexit that they really want, but I think in the end, you know, Labour may end up voting for it—at least, we had Emily Thornberry here at Chatham House about two months ago, and she alluded to that possibility.
And let’s not forget, too, that even within Parliament, Theresa May does have a very slim majority with the DUP, but if you only focus on the formal numbers, you overlook the fact that there are also around—between six and 10 Labour politicians who are likely to support the deal because they are in 60-70 percent Brexit-voting constituencies. Though I—my money is actually on May passing. If she lost that vote, by the way, the Conservative Party would almost certainly seek to replace her without going to the country. Now that would be politically very difficult, and there would be an uproar from the opposition parties, but they would almost certainly move to have an internal leadership election without going to the country because they are aware that Jeremy Corbyn only needs a 2 percent swing to get within coalition territory, and he only needs a 4 percent swing to get within majority territory. And I can tell you, from my own interviews in London, there are a lot of people in the city saying that they like where the Labour Party is on the customs union—because it’s now supporting a customs union—but they don’t want the Labour Party in power. So there’s a curious paradox almost within London. They like where Jeremy Corbyn is at the moment. They think he could deliver a soft Brexit, but they don’t want Jeremy Corbyn anywhere near power.
MYROW: So if you talk about—if you are wrong and you had an initial vote against May in Parliament in autumn—and I think one point that Ed and I were talking about before we came in here is that the markets often get to vote, as well, and the financial markets won’t like that. From my own personal experience, we saw two votes on TARP, so maybe it takes a failed vote to maybe get a vote to pass.
LUCE: It needs something to concentrate minds, and as you remember that 800-point drop in the Dow that day did concentrate minds. Boehner used it to have a successful second vote on TARP, and maybe that’s the only sort of Hail Mary you can think of if Theresa May is unable to pass a bill. She’d try again a week later after the markets have had their say.
MYROW: So before we move over to inviting members to ask questions, I just want to—we’ve been very—you know, since the economics and the—have been such a big part of this, but we are supposed to be looking at foreign policy more broadly here, so we had the diplomat side, the defense side, and we’re talking about the Europeans and how the U.K. plays into that. We’ve seen in the most recent German defense budget defense spending down, so it doesn’t seem like the Europeans are necessarily anticipating—even if the U.K. is pulling out of the EU—that it’s going to offset their role from a defense perspective.
Any thoughts from Ed, Matthew, on what—how the Brexiteers approach the kind of national security, diplomatic side of the equation?
LUCE: Look, I’m a columnist so I’m allowed to sort of give my opinion, and I’m not a fan of Brexiteers. One of the reasons I’m not a fan of Brexiteers is they really haven’t thought through all these scenarios. They’ve sort of relied on very general sort of statements of hope like Britain is going to strike trade deals with the Commonwealth—whatever that is in economic terms.
MYROW: And Jennifer, in terms of the Commonwealth, would that save them in any way?
HILLMAN: No. I mean, again, 42 percent of all of U.K.’s exports go to the EU, and none of the Commonwealth countries are among Britain’s top trading partners, so—
LUCE: And I believe there are even more startling ways of putting that, so Britain exports more to Ireland than the rest of the Commonwealth combined.
LUCE: To Ireland. So, you know, there’s that kind of what I would call a fantasy. There is the idea that there will be a U.S.-U.K. bilateral trade deal, that Trump will not only do sort of the heavy lifting on this side of the Atlantic to get that deal through and have the negotiating team who are enthusiastic about it to negotiate it, but also that it would be a deal acceptable to the British public, and where I think, you know, what would—what would—what would American interests advising the USTR want from a deal with the U.K.—you know, things like chlorinated chicken and, you know, NHS, the National Health Service, which is a—you know, a sort of national religious symbol in some ways, allowing more contracting out and outsourcing and so forth. It would be very easy to demagogue this deal to death domestically in Britain. Trump is not liked.
So the Brexiteer sort of vision of British foreign policy outside of Europe, post-Brexit, is, you know—to wear my columnist hat—pure fantasy, and they run away from, you know, informed interviewers whenever the offer is made. They do not want to be questioned on this subject.
MYROW: And what about their role, Matthew, in other multilateral arrangements—the P-5, the G-7, G-20, Five Eyes, NATO—how you see U.K. using their leverage in these other arrangements post-Brexit?
GOODWIN: You know, thanks. If I could quickly just say a couple of broad points relating to foreign and security policy. The first thing to say is that, yeah, I think, despite the—to put this diplomatically—the sort of—the challenges that surround the Brexit process, what—Robert Wainwright, who recently left Europol, you know, made this point that even if you just put that to one side, you know, there is still goodwill on both sides to ensure that they come to some kind of mutually beneficial arrangement around security and foreign policy initiatives.
But that said, the second, I think, broad consensual point is that everybody implicitly accepts—or sometime overtly accepts—that, you know, Britain is going to be less influential as a consequence of this decision. But those are two sort of general points.
I think where we are now is that the U.K. is looking to create what it calls a new post-Brexit special relationship between the U.K. and the EU on foreign and security policy, and we’ve seen Theresa May talk about a new security treaty that would allow joint initiatives with the EU and action on areas of common concern. But there are specific areas of work that are going to need to be dealt with quite urgently. The U.K. is going to need to invest far more seriously in bilateral relationships, beefing up diplomatic representation in other European capitals. It’s going to be much harder for the U.K. to maintain its influence over key issues—the refugee issue being one that has particularly animated British voters—but it’s also going to be much harder to wield any significant influence, you might argue, in areas like the Balkans, Ukraine, North Africa, and Turkey, where I think the U.K. will increasingly play a secondary role to the EU, and of course where the EU is going to be able to use a lot of leverage relating to markets, the prospects of EU membership, as very powerful incentives for encouraging, you know, changes within those—within those states.
That said, I think U.K. influence on European security is going to remain very significant. I think the U.K. will remain a global geopolitical power. I think given its position within NATO, you know, as one of the most capable, most willing powers, that’s unlikely to dissipate in a major way. It will become harder for the U.K., I think, to translate that commitment into multilateral political influence. It’s going to have to work a lot harder to ensure that it’s not an afterthought when it comes to the U.S. and EU conversations.
Macron has been very aggressive—you know, rightly so—very opportunistic in trying to fill that void with the U.S., even talking about a special relationship, which obviously carries particular resonance in the U.K. So I think, you know, the two broad points at least that I would make is, you know, the U.K. will remain, you know, a key player obviously, but there are going to be specific areas where it is going to have less influence, and if we end up in that hard Brexit scenario, which I’ve suggested is looking increasingly likely given the customs union debate, then there may be specific weaknesses that will materialize around the European arrest warrants and so on. But let’s wait and see.
MYROW: Great. So at this time I’d like to invite members to join our conversation with their questions. A reminder that this meeting is on the record. Wait for the microphone, speak directly into it. Please stand, state your name and affiliation, and please limit yourself to one question. And keep it concise to allow as members as possible to speak.
And right there in the back.
Q: Hi. Jamie Kirchick from Brookings.
What are the implications of Jeremy Corbyn becoming prime minister, particularly on foreign policy?
LUCE: I think Matthew should answer that. (Laughter.)
GOODWIN: I’m more interested, Edward, in your views actually because I’m interested in the columnist’s views. Let me take a punt.
I think the implications of a Jeremy Corbyn government—I think actually the interesting implications are probably internal. This is somebody that wants to nationalize most of our key industries and implement radical economic reform around taxation and other areas. And I think this would be an economic shakeup of the kind that Britain has not seen, really, during the—well, certainly since the ’70s, but you might argue (in ?) the postwar era. That’s why lots of businesses are very anxious about what that means.
On Brexit, Corbyn has tread a fine line because his coalition demands that. This is a political party, you know, that is carrying seats in the north of England that gave a 70 percent vote to Brexit, and seats in London that gave a 70 percent vote to remain. So Jeremy Corbyn has been remarkably ambiguous about what he believes should be the best Brexit model. On the one hand he is saying let’s get out of the single market; on the other hand he’s saying let’s keep a customs union. That seems to be roughly where he is and as far as he is willing to go.
There’s a lot of pressure inside to get him to commit to that single market, but if he hasn’t already, then when will he? But on the broader foreign policy issue, this is somebody that has been very critical of the U.K.’s foreign policy interventions pretty much for the past 30 years, somebody who has willingly engaged with terrorist sympathizers, with groups and organizations that really have had no formal channel of communication to the U.K. government, you know, in recent history, somebody that is very unorthodox—from a radical left-wing position—in his views towards things like Israel, in his views towards Latin America, in his views towards Syria and Libya, you know.
So this is somebody that would not only cause, I think an economic shock—and we talk about the markets reacting, well, watching the markets react to a Labour majority election will be something worth watching. But also, this is somebody who will significantly shake up British foreign policy and not, I would suggest in a personal capacity, for good reasons.
LUCE: I’ll make just one very quick point. The poison—the Russian poisoning in Salisbury a few weeks ago and May’s reaction to that is a very interesting case. The first place she went was Brussels. She got a major, very practical cooperation from Macron, Merkel and others, and then went to the United States and got likewise tough action from across the Atlantic—classic transatlantic behavior, classic British role in transatlantic behaviors: go to Europe and interpret America to Europe; go to America and interpret Europe to America and be the key bridge between that.
That’s going to be still possible to do. As Matthew outlined, you can have a U.K.-European security arrangement, and Britain will remain in NATO. And so the sort of predictions of British geopolitical doom or extinction after Brexit might be overdone, but if Corbyn is prime minister, they wouldn’t be overdone. So I won’t belabor it; we’ll probably get back to that in a minute. I won’t belabor why.
MYROW: Right down here in front.
Q: Mavis Boleyn (sp), retired, State Department.
Franco-British military cooperation has been an important activity in recent years. Would you expect that to continue under a hard Brexit? Is that the kind of thing that you would expect to see going forward?
LUCE: Again, I think Matthew should take on to that. I’m actually not up to speed on that, so I’m not punting.
GOODWIN: Yeah, I mean, I would say that there is going to be no—look, this is—making predictions in the Brexit climate at the moment is probably not what one should be doing, but I personally would not foresee any fundamental changes in bilateral relationships between the U.K. and France, or the U.K. and Germany, or even the U.K. and the U.S. But I think the U.K. will, at the same time, feel itself increasingly sidelined from France and Germany, within the EU and/or the European orbit. It will be going to meetings during transition where it doesn’t have any significant voting rights. It will be going into security and foreign policy conversations where it might be able to express a view but will not be able—at least at the European level, to wield any formal, significant influence. And it will be the first time that the U.K. has really found itself in that situation.
I think as well, watching where Macron wants to go on this is interesting. He has clearly decided that the Anglo-Franco relationship is going to be rebooted in a major way, and I think he has also clearly decided that he is going to be a leading player in the Eurozone-EU reform agenda with Merkel. So, you know, Macron seems to be very good at smelling weakness and then acting accordingly, and I think that Whitehall and Westminster—well, I can tell you I know this for a fact—are very aware of that. But I don’t—I don’t personally foresee any major ruptures in bilateral relationships, but at the European level, the U.K. will certainly feel more alienated over the coming years.
Q: Thanks. Dov Zakheim, CSIS.
I’m just wondering—I totally agree. If Jeremy Corbyn is prime minister, the special relationship with us is gone. I can’t see Mr. Trump and Mr. Corbyn speaking from any kind of common sheet of music.
But the defense budget in Britain is under tremendous threat right now. The British army is smaller than our special operations forces. I think there may be more admirals than there are surface ships in the British—in the Royal Navy.
So my question is if there is a hard Brexit and the economy in Britain is not going to skyrocket, what is that going to do to British defense, and does that render moot what we’ve just been talking about because if you’ve got no ships and you’ve got no troops, you don’t have much to say.
MYROW: One thing that I’d weigh in at also here is you have to think about, you know, what does the U.K. does have going for it. They have very capable special operations capability, although not a tremendous amount of lift capability. They are still like a powerful, global nuclear state, so I think in those terms—I defer to Matthew in terms of the direct impact on the budget, but, I mean, we’ve seen this in a lot of other countries, whether it’s Australia or wherever. I think what we see is people focus on their competitive advantages.
GOODWIN: Yeah, I mean, I would certainly agree with much of that. I’d also just come back to the question asked. I mean, let’s fast-forward to 2022. I mean, I—it’s a shocking thought, but the Anglo-American relationship might be actually really on fire with Jeremy Corbyn and Bernie Sanders as your next president. (Laughter.)
There is a—it’s plausible, it’s entirely plausible, right? But on a more serious note, I think the economic question that I think was the backdrop to your point about defense spending—I mean, the one unpopular point in these debates, perhaps, that I do make is that the British economy is, without doubt, suffering as a consequence of the referendum vote. Whichever forecast is your hobby horse, you know, they tell a broadly consistent story that, compared to other advanced Western nations, we are going to have a bumpy ride.
But the other point that I would make is that the British economy has proven quite resilient, and it’s certainly true that some may say, well, Brexit hasn’t really happened yet, but the fundamentals of the British economy—overall unemployment, growth rates, productivity, some manufacturing, some—I’m trying, perhaps, to paint a counter-picture which is that overall, given this rather seismic political shock, the British economy has proven to be quite resilient.
And I’d add to that point—and I’m sure Edward would have thoughts on this and will probably disagree with me, but the new defense minister, Gavin Williamson, is clearly angling for the top job and is somebody who has already been making very strident statements about the defense budget, wanting to increase that, wanting to match some of the commitments to increasing the budget that have been made in Brussels with regard to EU defense spending—certainly not matching in terms of money but just in terms of broad principle—and it may be that actually over the next year and a half the defense community finds itself perhaps surprised by Williamson’s positioning. He is seen within Westminster, by the way, largely as somewhat of an amateur, as a novice who was promoted very quickly after being the chief whip. But he’s somebody who is very ambitious, and he may be using the defense budget partly as a way of projecting some of those ambitions.
LUCE: Just a quick point if I may.
That sounds entirely plausible that there will be higher defense budgets. It’s consistent with the Brexit world view that Britain is stronger going it alone, and so forth. And that might have, you know—go some way towards making up for some of the cuts we’ve seen in the last 15-20 years to the number—the size of the British army and navy.
But there is a problem here. Now while Matthew is right in saying the British economy is resilient—it was the fastest growing economy in Europe in 2015—this year it’s the lowest—the slowest growing of the big economies in Europe. Even Italy is growing faster than Britain. And that is the projection whether you ask IMF, ask the Europeans, ask the Bank of England. They’ve all got pretty much Britain at the lowest, from the highest—coming out of the 2829—2009 recession, and that has implications on affordability on defense spending, and all other kinds of things, and the NHS, since that was a central promise of Brexit.
So what I think we’re going to get is, if Brexit indeed happens, and it’s not a Norway-style Brexit, we are going to get incrementally slower British growth. It’s not going to be a disaster, but we’re going to get sort of back to the 1950s and 1960s where Britain is like half a point each year below where the Europeans are. Cumulatively this adds up to quite a lot. The gap just widens, widens. And by 2030 we’ll wake up and, oh, we’re really quite poor. (Laughter.) So I think it’s that kind of scenario that’s more likely. And then defense budgets—well, you know, they’re going to be cut.
HILLMAN: And for what it’s worth, I’ll only add on the sort of economic trade side that the degree to which the growth is affected does play out, at least in the scenarios, very differently whether you get a hard Brexit or a soft Brexit because it’s very clear if you end up with a hard Brexit—in other words, no deal—then obviously the U.K. is subject to whatever arrangements they have which largely would be the WTO rules, which for most goods means that you now have to both pay a tariff going between the U.K. into the European Union and, more importantly, you are subject to new regulatory requirements. So an automobile that now moves free would have to pay a 10 percent duty and somewhere between 1(,000 dollars) and $2,000 to be re-inspected just to move between the U.K and the EU. And you multiply that by every other scenario.
And then the real one to watch for in terms of judging how significant is the effect on Brexit going to be is what happens to the regulatory barriers around trade and services, particularly financial services because in the absence of a soft Brexit, that’s where you’re really going to see the diminution in growth in the U.K. market.
Right now everybody lives with passporting where if you get a particular financial service instrument—an insurance contract, a particular derivative—approved in the U.K., you sell it throughout the entire European Union. Post-Brexit, if we have a hard Brexit, all of those instruments are going to have to be reapproved again, at considerable expense, in Brussels, and what it will mean is many, many—I mean, some people have predicted literally, if there’s a hard Brexit, day one you would see more than 10,000 of the jobs in the city—I mean, the financial services city moving. I mean, you’re already seeing significant movement into Frankfurt, Paris and, to some degree, Dublin. But the perception is a hard Brexit could make that—all of that sort of much worse. So—
LUCE: I really agree.
MYROW: In the back.
Q: Good afternoon. Esther Brimmer, NAFSA: Association of International Educators.
Among the many strands that led to Brexit was objection to the jurisdiction of the European Court of Human Rights, actually part of the Council of Europe. So I’d like to bring up a different aspect of foreign policy, which is international human rights.
The U.K. has also been an important voice in this area at a time when the United States has clearly abandoned its role. I wonder about the voice on international human rights issues if the U.K. is less vocal as well after Brexit.
MYROW: Ed? Or Matthew? Or Jennifer? Jennifer, why don’t you—
HILLMAN: Well, I’m happy to comment.
Part of this, if you remember back to the lead-up to Brexit, one of the issues that Theresa May, at least, was commenting on is—one of the things that she initially had said she would love to see is the U.K. out of the jurisdiction not of the Court of Justice of the European Union—or in addition to getting out from under the Court of Justice of the European Union, she wanted out from under the Court of Human Rights, I mean, because there had been a number of decisions handed down by the European Court of Human Rights that were anti, if you will, the U.K., and so her view was I would like to be out of that jurisdiction.
We haven’t heard a lot more of that talk, and part of it will depend, I think—so I don’t think there has been a discussion. It’s a sort of—entirely separate legal regime. In other words, whether you are a member of the European Union does not affect your legal status as a participant in the overall human rights regime that is set up within Europe because you obviously have a lot of non-EU members—Russia and others—that are subject to the jurisdiction of the European Court of Human Rights and are subject to the overall treaties with respect to human rights.
So at this point I don’t think there is a move afoot to literally withdraw the U.K. from any of the major treaties or the conventions on human rights notwithstanding that original flirtation with it, but it does beg the question about whether there is a gap between what is the freestanding U.K. law on human rights versus what is the European regime. And there is, I think, a lot of concern among a number of the human rights groups that the existing U.K. laws are less robust and that there would be some significant concern about whether or not that gap does result in a diminution in the commitment in the U.K. to some of the human rights—particularly some of the more recent decisions coming out of the European Court of Human Rights.
LUCE: I think that’s an excellent summary of the situation. The only think I’d add to that is that there is a bandwidth question here. Britain is going to have to get quite aggressively bilateral if Brexit happens in terms of putting resources into getting deals and treaties with not just America, but with China, with India. It’s going to have less—it’s not in a big club any more so it’s going to have less clout vis-à-vis those bilateral deals than it had before. It’s—so it’s going to have a sort of bandwidth problem in, you know, whether human rights will remain a big priority, but it’s also going to have a leverage problem. It’s just not going to have the same clout if it’s not speaking with the European Union as it is alone.
So I fear it’s not—I mean, it’s not disastrous for human rights because it’s not like the world is being upheld now by Britain’s sort of clarion call, but it is a good sort of voice on a lot of these issues, and I fear that voice will be fainter as a result of Brexit.
HILLMAN: If I could only add, too, on the bandwidth issue, I mean, this is I think one of the other things that I don’t think has been very well recognized as part of Brexit, which is how much the U.K. is going to miss access to many of the agencies of the European Union.
I taught a seminar on the law of the Brexit last year, and one of the things I asked my students to do is to keep a running list of all of the agencies of the European Union that potentially could need to be replicated in the U.K. upon Brexit. And at the end of the class we ended up with 96 agencies on that list.
So the bandwidth for the U.K. to have to recreate the inspectors for nuclear power plants, those approving patents, those approving certain chemical additives—the entire sort of panoply of regulation—again, would all of them need to be recreated? No. But is it a very significant amount that creates this substantial bandwidth problem? Answer: yes. And the question is, how fast is the U.K. going to be able to get up to speed in recreating all of the many sort of apparatuses of the European Commission and the many other agencies within the European system. I think—there I would think it’s fair to say that the U.K. is very far behind.
LUCE: So are you feeling cheered up? (Laughter.) So I’m going to be swinging from the rafters in a minute. (Laughter.) I’m quite gloomy about this.
HILLMAN: Are you?
Q: Doug Ollivant with Manta International and New America.
I want to follow up on what Dov was talking about. We have—I think we have two trends that we’re talking about here. One is the British giving up their defense capability which has very little to do with Brexit, and then of course, Brexit causing the Brits to lose their voice in the EU. They’ve been kind of our interpreter into the EU—the other English-speaking peoples—for some time.
We now have neither of those things in Britain. To continue with the bad pop culture references of Matt, you know, we’re used to the British being Robin to our Batman. They no longer are able to bring these long-term—this long-term presence. Yes, they have special forces. Everyone—you know, the Emiratis and the Poles have special forces. What the Brits have brought for years is the ability to have long-term presence, ships and ground forces to supplement us.
So I guess my question is how long is this going to take to sink in to the U.S. foreign policy community that they are no longer the ally of choice, that this special relationship is no longer so special, and maybe the Brits are our partner—they’re still an important power—but maybe we need a partner that is a voice in the EU, and maybe we need to call Paris.
How long is that going to take to sink in, and when it does, how long does our history continue this special relationship? Is the British-U.S. trading partnership really that important if they’re no longer our default partner?
LUCE: Can I—
HILLMAN: Yeah, please.
LUCE: —give a quick answer on that question?
I’ve—for another piece I’ve been writing, talking to former national security advisers here of previous presidents, and it’s quite unrelated to the U.K.-U.S. special relationship. But each of them in the interviews I was doing brought up their feelings of worry and sadness about Britain essentially walking off the chess board. And one put it very well. He was national security advisor to Obama for several years, and he said whatever issue it was, his first instinct would—even if it didn’t involve Britain—would be to call his British counterpart or call somebody from the British Ministry of Defense. And their answers would be really good. So there was a caliber of mind there, and I guess, of course, a linguistic thing that I don’t necessarily think is going to go away. I mean, I think the British Civil Service has got some very high caliber people. You know, their patience is being tried.
But I asked friends of mine in the foreign office whether there had been a decline in graduate applications to the Foreign and Commonwealth Office. There hasn’t been; it’s still hotly contested. They’ve still got their pick of pretty good graduates. So I don’t think that will change.
A lot of the answer to your question about whether the special relationship will be useless or completely a ghost of its former self will depend on, you know, whether Corbyn is prime minister or not because I don’t think all the alternatives as prime minister will want to slash defense spending or radically alter Britain’s foreign policy priorities.
MYROW: Down here.
Q: Hazel Denton, Georgetown University.
I wanted to pick up on a phrase that Ed has used a couple of times. He said, “if Brexit happens.” I’ve seen fleeting references in the press to the possibility of a revote. Is it a realistic possibility?
LUCE: I’m going to defer to Matthew, but I’ll give you a very quick answer. Sorry, Matthew. I should maybe—OK. Well, I’ll give the—
GOODWIN: (Off mic.)
LUCE: It will be a quick one and then you can give the richly informed one. (Laughter.)
First of all, there’s a sort of practical question about how we get to a political situation where there is a second referendum, and what the wording is, and who it is that agrees on the wording. So that’s—but leaving aside that very, very difficult sort of—leaving aside the omnishambolic nature of British politics right now, let’s say there were a second referendum that just simply offered a reversal of Brexit, and there were a reversal—52-48 in favor of remain this time as opposed to the other way around—would that settle anything? I think it could sort of even more deeply poison British politics and make the country even less governable. And I think a lot of the second referendum—those who had been hoping for a second referendum have begun to think along these lines.
I had a slightly dramatic conversation with a colleague of mine the other day in which he said, where you stood in 2016—remain or Brexit—is almost like a sort of identity. It’s who you are. You will live with this decision for the rest of your life. Families will debate it, a bit like the English civil war in the 17th century. Were you a royalist or a parliamentarian? And this is becoming a very deep thing.
So I’m not sure the sort of magical scenario of a second referendum is quite so inviting today as maybe it was a year ago, but I might—you know, I’m not there. Matthew is there, and I might be sort of overdramatizing it.
GOODWIN: Well, I think if you start—I work a lot with surveys and opinion polls and so on—well, certainly the more reliable academic surveys. We have a standard question which is, in hindsight, do you think the vote for Brexit was right or wrong, and since the referendum, you’ve seen a very polarized electorate. Typically about 42-43 percent say it was right; about 44-45 percent say it was wrong, and the rest are undecided.
We have a lot of other questions which ask voters would they like a second referendum, and if you are being actually as generous as you could be to the second referendum camp, you would make two points: one is that the percentage who would like a second referendum has been going up, but you would also make the point that it remains at about 37-38 percent, so a sizeable chunk but nonetheless a minority.
And I think, thirdly, while the—I don’t want to call them anti-Brexiteers, but while the pro-referendum camp has been mobilizing around this idea of a people’s vote on the deal when it comes back in the autumn, and if Theresa May loses that vote, they will probably then say this is just a vacation for going to the country and having a referendum. And I would tread incredibly carefully if I was them because the best outcome, I think, for that community—and I’m trying to just sort of stand deliberately in the middle here—but the best outcome for that community will be a soft-type Brexit that keeps Britain perhaps within a customs union, perhaps linked up to all of these agencies, and so on.
The other scenario is a second defeat, which is putting the issue to bed for a generation if not more. And it certainly—at every election we’ve had since the referendum, we have seen a growing polarization within the electorate with the Conservative Party becoming far more pro-Brexit and the Labour Party really straddling an awkward coalition, not really sure where it is on this Brexit issue.
So I would be very dubious about holding a second vote—certainly not wanting to hold one this year.
MYROW: I think we have time for one more question, and I saw Doug with his hand up.
Q: Thanks. Doug Rediker, International Capital Strategies and Brookings.
The title of this is “British Foreign Policy Post-Brexit,” so just going back to that question, British foreign policy has been influenced in a somewhat nuanced direction towards Russia over the past 10 or 20 years, largely because of the inflow of Russian wealth into London.
Now that has clearly taken on a more ambiguous tone, but the question is China. With China’s wealth, with Britain looking for where is our economic future going to be, what is the foreign policy implication vis-à-vis British relationships with China in a post-Brexit environment?
LUCE: So you remember before Brexit even happened whilst Cameron was still considered to be a good statesman when he was prime minister, he rolled out the red carpet for Hu Jintao. He got rebuked by the Obama administration for Britain being first out of the gates to join the Asian Infrastructure Investment Bank—so way before Brexit, you know, was considered remotely possible.
You know, Britain’s mercantilism has been showing, so I think that’s just going to become—continue but more so. You know, I have to say, mentioning Cameron, I feel quite angry with the man, I really do. (Laughter.) The consequences of that tactical error are going to long outlive our memory of what it was like to live before Brexit.
MYROW: So with that—
GOODWIN: (Off mic.)
MYROW: Oh, Matthew, do you want to weigh in?
GOODWIN: Just quickly, as one of my colleagues said to me the morning after the vote, David Cameron will now be remembered as the third prime minister in postwar Britain who will forever be remembered for one thing—after Anthony Eden and Suez, Tony Blair and Iraq—David Cameron will forever be associated with Brexit. And I think that’s a fair summary.
But the point about foreign policy, if I could just make one point, which is, seen through the eyes of the Brexiteers, the next five to 10 years will be full of bilateral meetings with, you know, India, Pakistan, Australia, you know, former Commonwealth nations and so forth, and of course, what do you need to do in order to encourage that trade? Well, probably one of the things they’ll end up offering is a fairly liberal immigration policy, and it may well be that actually what many leave voters thought they were voting for, which was a more restrictive—perhaps even more white Britain, they may end up actually facing a rather different reality with migration becoming perhaps—well, reaching new levels, but also becoming more diverse.
So it’s going to be an interesting interplay between foreign policy, on the one hand, and Britain’s immigration policy on the other.
MYROW: So with that I would say a lot of uncertainty in Brexit; certainly a lot of uncertainty at home, but the only certainty we have in foreign policy is that at CFR we stop at 1:30. (Laughter.)
So I want to thank Ed, Jennifer and Matthew for this. Thank you very much. (Applause.)