Brexit means sovereignty. Britain will now be free to chart its own course in the global economy. It can — and will — set its own immigration rules, ending the free movement of E.U. citizens that brought millions of people to Britain and helped depress wages for the lesser-skilled native-born. It will also stop sending billions of pounds a year to the E.U., money that can now be used to finance the prime minister’s plans to increase funding for the National Health Service, education and police. Those acts alone will help keep the promises made to Britons during the 2016 referendum campaign.
The harder questions, however, have yet to be settled. The E.U. withdrawal agreement gives Britain until the end of the year to determine its new trading relationship with its former partners. Establishing that will not be easy, especially because the E.U. is demanding that Britain align its rules on a host of matters with the rest of Europe if Britain is to maintain relatively easy access to E.U. markets. That would stymie Britain’s ability to forge its own trade deals with other nations, so Johnson and his team are unlikely to agree to the terms.
This, in turn, will likely have serious short- and medium-term effects on the British economy. Predictions made by the Remain cohorts of impending disaster were so dire that Brexiteers gave them a name: “Project Fear.” None of those overly gloomy projections have come to pass, but that doesn’t mean Britain wouldn’t suffer if trading relations with the E.U. were dramatically changed going forward. British businesses have developed supply chains and markets in the E.U., and they can’t be unwound or replaced overnight. If Britain follows through on its intention to de-align its economic rules and regulations from the E.U.’s, it is natural to expect some degree of contraction as businesses adjust to the new state of play.
Sovereignty, you see, has consequences. A fully sovereign nation has greater opportunities but also greater risks. Britons embraced the opportunity when they withstood heavy pressure from British industry, the media and global elites to stay the course and leave the E.U. They will need to withstand economic pressure as the full fruits of sovereignty begin to be felt in the next couple of years.
This means Johnson and his government have great incentive to build for a sovereign future and sign new global trade deals with other nations as soon as possible. Australia and Canada are relatively easy targets, but the United States is the big fish. A U.S.-British trade deal would effectively make American markets Britain’s lifeboat in the event of a break with Europe. Such a deal would also give Johnson greater bargaining power with the E.U.
A quick, big free trade deal is also in President Trump’s political interest. Trump frequently comes under fire because of the trade wars he has started with China, the E.U. and other countries. His reelection prospects would improve if he showed business that he is for a fair trade deal that treats the United States as an equal rather than a sap. Britain is in excellent position to claim that mantle as, unlike many other countries, its wage levels and labor protections are either stronger or not substantially weaker than those in the United States.
That doesn’t mean there won’t be important bones of contention. U.S. agriculture uses practices such as genetic modification that many in Britain find abhorrent. Opposition to importing chlorinated chicken from the United States is only one argument trade-deal skeptics in Britain advance. Drug prices are likely to be another important conflict zone, as the NHS — like health systems in all European countries — uses its near monopoly of purchasing power to negotiate much lower prices with U.S. drug manufacturers than the latter prefer. And there’s the looming matter of the free world’s two big financial service centers — New York and London — battling over rules regarding market access and practices. A quick deal can be had, but a comprehensive deal might be harder to achieve.
These complications, however, are the wages of sovereignty. Johnson’s huge parliamentary majority and the disarray of his opponents will buy him time to manage sovereignty’s risks. I’d wager that Britain will more than muddle through. In five years’ time, don’t be surprised if Brexit Day is an annual holiday celebrating modern Britain’s finest hour.