Brexit: More than ever, the U.K. needs Canada’s friendly advice and experience on the potential cost of separatism.
Originally published in Huffington Post Canada here on September 15, 2017.
This Monday, Canada’s Prime Minister Justin Trudeau will host an important but impossible guest in Ottawa: Theresa May, the U.K. PM currently in the eye of the biggest political storm the U.K. has ever experienced since the Second World War: Brexit.
Trudeau already told the U.K. it should stay in the European Union. Now what?
Increasingly isolated from its closest neighbours, the U.K. is desperate for any sign of a free-trade agreement with Canada after failing to establish one with a string of uninterested countries. However, Monday’s tête-à-tête could be significant: more than ever, the U.K. needs Canada’s friendly advice and experience on the potential cost of separatism.
The political disorder in London requires context. Following a short and rather xenophobic referendum campaign in June 2016, 51.9 per cent of voters chose to leave the EU, arguably the world’s most successful international organization. Many Brexiteers believed a relentless stream of « fake news » demonizing the EU, although the majority of the population under 55 voted against Brexit. In addition, the Conservative government had barred 3.5 million EU citizens from voting in the referendum despite living and working in the U.K.
Brexit plans will have consequences as far-reaching as Canada’s shores.
May’s government is now Europe’s most isolated, losing its credibility in Paris, Berlin and Brussels, the EU capital. Though ties have not yet been severed, Brexit is already a disastrous economic and political reality for the U.K. The British Pound has fallen against the Canadian Dollar. Both domestic and international investments have dropped. In 2017, the U.K.’s growth has been the EU’s lowest so far, while inflation is on the rise. Politically, support for a hard Brexit is waning as people realize the numerous benefits of EU membership.
Brexit plans will have consequences as far-reaching as Canada’s shores. Monday’s meeting will reveal whether Trudeau and May share any common vision in navigating these uncharted waters.
The new Comprehensive Economic and Trade Agreement between Canada and the EU (CETA), currently under ratification, is a top political priority for Trudeau’s government. Yet the U.K., Canada’s first trade partner in the EU, has voted for Brexit which means the U.K. must renegotiate at least 759 treaties, including CETA.
If the U.K. joins the European Economic Area — a looser organisation gathering the EU, Norway and Iceland — the U.K. will still have access to most of CETA’s benefits. The damage to Canada’s investments will be mitigated, save for fish and farming products which are bound to see tariff barriers — a setback, for example, for Canada’s growing hormone-free beef exports.
Canada has deeply invested in the U.K. economy — $90 billion annually. U.K. investments in Canada have directly created 120,000 jobs coast to coast. A softer Brexit will limit the impact on Canada’s middle class, in keeping with Justin Trudeau’s campaign platform.
Much will rest on Trudeau’s shoulders this Monday.
Trudeau and most Canadians are proud of their cultural diversity and welcoming policies. Since Brexit, net migration has fallen in the U.K. May should turn the tide and guarantee freedom to travel and work in the U.K. to all EU citizens, including the 700,000 currently at risk of being deported by 2019 if the U.K. stops enforcing EU residency rules. This would ease relations with the EU 27 who could then grant the U.K. access to the EU’s single market. This would be in Canada’s interest, as hundreds of Canadian companies use the UK as a springboard to the EU market.
Ultimately, none of the Commonwealth countries, including Canada, will begin trade talks with the U.K. until it finds a deal with the EU. Brexiteers want to conquer the world without the EU; however, they neglect the fact the U.K. is arguably less relevant than the EU in the 21st century. The EU has become the top trading partner of 80 countries and makes up 24 per cent of the world’s wealth, with four EU countries each exporting more than the U.K., including Germany with three times as much.
Will Trudeau convince May that being part of the world’s biggest market, largest public research programme (Horizon 2020), most extensive academic exchange programme (Erasmus) and the most democratic international organisation (the European Parliament) is in the U.K.’s direct, long-term interest? A second referendum, this time on the outcome of Brexit negotiations, could give the British people a second chance to avoid such a historical mistake and to continue to reform the EU from within, saving one of Ottawa’s closest EU allies.
Much will rest on Trudeau’s shoulders this Monday.