By Mark Tokola
To be clear, the United Kingdom has not yet left the European Union. The June 23 referendum in the UK was an expression of the will of the people (by a majority of 52 percent to 48) that the British government should begin the process of negotiating an exit from the EU. The EU Treaty allows for such a process. British government officials have said that negotiation may take a decade because of its complexity. The Brexit decision, however, marks a historic turning point that will have ramifications in expanding circles from inside the UK, to the EU, and to the rest of the world, including the United States and the Republic of Korea.
Our blog, “The Peninsula,” has a boilerplate disclaimer that the views expressed by authors are their own and should not be taken as representing those of the blog’s editors or of the Korea Economic Institute. I would underline that with red ink in this case because I have strong views on the subjects of the EU and the UK, having spent a large part of my professional life while in the U.S. Foreign Service working in that area: eight years at the U.S. Mission to the European Union in Brussels, six years at the U.S. Embassy in London, and two years in Edinburgh, Scotland.
Along with my attachment to Korea, my commitment to Europe (in which I would include the UK) has been a large part of my life. Europe and Korea, and their relationships to the U.S., and to one another, are not separate issues. The U.S., Korea, and EU are all part of the democratic, market-oriented, group of countries that must for their own sakes work together to promote the rule of law, liberal economic policies, collective security, and human rights. Anything that happens in one makes a difference to the others. Now, that said, what is the meaning of Brexit?
Even though polls in the UK had shown for months that the referendum would be narrowly won or lost, the outcome still came as a surprise. Many, probably most, observers believed that with Prime Minister David Cameron, the opposition Labour and Liberal-Democrat party leaders, the Confederation of British Industries, the major labor unions, the Bank of England, and a vast majority of economists arguing to remain in the EU, the public would find staying in the safer choice. However, the UK has had an uneasy relationship with the EU ever since it joined in 1975, and there have been waves of opposition to membership ever since. These sentiments have crested in the last five years as British citizens found themselves in a time of European slow growth, high unemployment, economic crises in Greece and other member states, and an ongoing refugee crisis.
What happens next? In the immediate future, not much. The economic agreements between the U.S. and the EU, and the EU-Korea Free Trade Agreement remain intact and the UK remains part of those agreements until the terms of its departure from the EU can be agreed and implemented. Even then, it is imaginable that that the UK will remain part of an economic relationship with the EU that keeps it within international trade agreements. If, for example, the UK became a member of the European Economic Area, along with Norway and other non-EU member states then, for all practical purposes, the U.S. and ROK would continue to relate to the UK as a member of the European trading bloc. At a more extreme case, it is conceivable that the EU may reconfigure itself into a different type of organization, with a European Political Union consisting of a smaller set of member states, and a European Common Market consisting of a different set. In that case, countries such as Denmark, the Netherlands, or Ireland might join the UK in a reformed Common Market, with themselves departing from the Political Union. Or, if the break is complete, then the U.S. and ROK would need to conclude economic agreements with the UK separately from the EU. It is worth noting that the UK only comprises 17 percent of the overall economy of the EU. It would be an important trading partner on its own, but for the U.S. and Korea, not in the same league as China or the rest of the EU.
All of the above assumes that there will remain a United Kingdom with which the U.S. and Korea will have a relationship. That may not be the case. Although the UK as a whole voted 52 to 48 percent to leave the EU, there was a dramatic split in the vote between England and Scotland. The Scots voted 62 to 38 percent to remain in the EU, with the “remain” vote carrying every district in Scotland. During the 2014 Scottish referendum on independence, one of the biggest arguments made to persuade the Scots to remain within the UK was that if they voted for independence, that would necessitate their leaving the EU and it would then be tough for Scotland to negotiate its way back into the group. With Scotland being pulled out of the EU by Brexit, apparently against the will of its people, the Scottish independence movement will reawaken with renewed force. Indeed, the morning after Brexit, the leader of the Scottish Nationalist Party, Nicola Sturgeon, began laying out the case for a new Scottish referendum. The U.S. and Korea may find themselves negotiating trading arrangements with an EU that includes Scotland but not England or Wales.
Some commentators simply do not believe that the result of the Brexit will be a UK departure from the EU. They believe that during the years ahead, the British public will change its mind and decide to stick with an EU that may have reformed itself in the meantime. There are many uncertainties ahead. One of the issues that will soon surface will be that Brexit from the EU does not mean that the UK would leave the European Convention on Human Rights and the jurisdiction of the European Court of Human Rights in Strasbourg. That is part of the Council of Europe legal framework, which is not part of the EU. What will the British public (and the Scots in particular) think of burning yet another bridge with Europe?
The main point to be taken from the Brexit vote is that it is part of the tide running against globalization everywhere. While being very different phenomenon, Putinism in Russia, Chinese international assertiveness and its crack down on domestic dissent, violent religious extremism, and populist nationalist movements within democratic societies (not excluding the United States and Republic of Korea) have in common their rejection of globalization. There is a strong strain within global society and politics of people who want to live within traditional communities, stop having to compete in a global market, maintain traditional attitudes and cultures, and to have a pride in the groups to which they belong, which are often defined by which people do not belong. People in the UK who voted for Brexit often said in interviews that they just wanted “to live the way we used to.” It is hard to think of any society that has succeeded in recreating a past in which to live. And in the end, the problem with building walls to keep the world out is that they also keep you in.
Mark Tokola is the Vice President of the Korea Economic Institute of America. The views expressed here are his own.