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player ready...“Fog in Channel, Continent Cut Off,” is a very old joke about an alleged British newspaper headline regarding weather over the English Channel. Even a brief visit to the British Isles can confirm this sense of distance.
The new trade agreement between the United Kingdom and the U.S. reflects psychological separation from Europe, along with our close partnership.
The accord probably facilitated the dramatic, if currently temporary, China-U.S. agreement to forestall extreme new tariffs.
Institutional history reflects Britain’s complex international attitudes.
Early in 2017, the United Kingdom finally departed from the European Union (EU). This ended the formal relationship with the regional economic organization on the Continent. The remainder of that year was a transition period. That was of great importance to businesses, but also to the population as a whole.
The 2016 referendum vote to leave the European Union – known as “Brexit” for short — is an important confirmation of Britain’s deep ambivalence about Europe. The close but clear vote in the referendum was a startling surprise. As with the 2016 presidential election in the United States, the majority of opinion polls predicted the opposite outcome.
The European Union was the product of World War II, not trade and investment per se. Early in that conflict, insightful leaders in Britain and the U.S. concluded that new international organizations were essential to avert a third world war.
One result was the United Nations. Another was the European Union, which grew out of a limited European Coal and Steel Community. Those two industries were tangible, essential and already associated France and Germany together.
Restraining Germany was essential. Germany’s long-term Chancellor Angela Merkel proved an especially influential leader in international as well as European terms. She personified dramatically a positive, as well as powerful, Germany.
Geography has been a factor defining the international outlooks of both Germany and the United Kingdom, which includes Northern Ireland, Scotland and Wales along with England. All but the first comprise Britain. The United Kingdom’s island status facilitates wide-ranging trade.
Many analysts, including Henry Kissinger, have underscored Germany’s vulnerability to invasion from both east and west.
Britain’s withdrawal from the common European commercial market brought significant new barriers and challenges to trade, travel and investment generally. Since World War II, the nation’s trade has become heavily concentrated within the Continent, moving away from the global British Commonwealth. However, the EU’s external trade barriers have gradually been reduced as globalization has grown.
Britain already provided a relatively open market environment. The general deregulation of Prime Minister Margaret Thatcher’s government in the 1980s made the island nation a relatively attractive base for investment by foreign firms anxious to penetrate the more difficult and bureaucratic economic environment of the Continent.
Moreover, Britain, along with a substantial minority of the EU members, has retained the national currency, avoiding participation in the euro. London is a principal global financial center, reflecting historical strengths in insurance, investment and trade, along with geography.
Scotland voted overwhelmingly to remain in the EU, and has pressed for greater independence from London. Scotland’s Parliament has limited tax adjustment and borrowing powers. The Liberal Democrats, part of the vexed coalition government with the Conservatives from 2010 to 2015, have done worthwhile policy analysis.
Britain’s long history demonstrates pragmatism and realism, reflected recently in hosting Ukrainian President Volodymyr Zelensky immediately after his unpleasant Washington D.C. meeting with President Donald Trump.
The new bilateral accord is already mitigating disruptions of Trump’s tariffs.
Arthur I. Cyr is the author of “After the Cold War – American Foreign Policy, Europe and Asia.”
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