Everyman’s Strategic Survey: Brexit and Canada

The cover story in the new, Fall, edition of the Canadian Global Affairs Institute’s journal downloadThe Dispatch is by Julian Lindley-French and is headlined: “Brexit, the Angloshpere and Canada.” Dr Lindley-French’s opening salvo is: “The normally reliable and sensible Anne Appelbaum got it badly wrong when she suggested that Britain would not survive outside the EU and that Britain would ‘need’ to rely on illiberal powers for its future economic well-being, which could well see the British lost to the West. Utter tosh! As Team GB is proving at the Rio Olympics it is a big mistake to write the British off. They have a habit of proving people wrong. So, what are the real implications of Brexit, and the coming Anglosphere, particularly for Canada?

He goes on to suggest, and I agree in broad, general terms, that “Brexit is ultimately about power. Many of those Britons who voted to quit the economically – moribund EU instinctively understood this. For too long, by refusing to turn the directoire into a trirectoire, France and Germany used the EU institutions to force the world’s fifth biggest economy and top five military actors into a form of political subservience. Whilst the British political class was not up to the challenge posed by Berlin and Paris, the British people were. “Enough is enough”, came the proud cry of millions.” He goes for bit of “utter tosh” himself when he says: “Brexit is now fact (and it is) and it will lead to a profound realignment of the Global West into a Eurosphere and an Anglosphere. The Eurosphere will be organized around Germany with France reduced to the subordinate partner. The Anglosphere will be organized around the United States with both an Atlantic and a Pacific wing, with Britain to the fore.

What will happen, in my opinion is that the world will align into at least three spheres:

  • The Anglo-Amerisphere which will be hugely powerful and influential IF it can encompass India;
  • The Sinosphere, which might include Japan, if America does not play its cards well enough, South Korea and so on ~ united by trade and commerce more than by ideology, but, in its way, not unlike the Anglo-Amerisphere which has always, since circa 1825, had a senior and several junior partners; and
  • The Eurosphere, which will be rich but weak and rudderless.

The big contest will be between the Anglo-Amerisphere and the Sinosphere for:

  • India, still the “jewel in the crown;”
  • Japan;
  • South Korea;
  • Indonesia;
  • the Indo-Chinese states – Cambodia, Laos, and Vietnam;
  • Philippines;
  • Malaysia; and
  • Thailand.

None of those, not even Japan and the Philippines, are “ours” by right. China can, and will exert enormous influence on them all to shift them from “associate members” of the Anglo-Amerishpere to “non-aligned” (now there’s a “blast from the past”)  to associate membership, or more, in the Sinosphere.

Africa will also be a key region, and there Chinese have moved quickly and effectively to make strong tis with many African states.

But, Julian Lindley French is not all hot air. he concludes, wisely, by saying that “In truth, it is not Brexit or even the US presidential elections that will shape Canada’s strategic choices. With respect, those choices are not made in Ottawa. The choice Canada faces and which Brexit and the Anglosphere brings into sharp relief is this; engaged strategic partner or free-riding hinterland happy to hide in the comforting but dangerous delusion that soft power is an alternative to credible hard power.

We have, of course, as former Liberal “minister of everything” John Manley reminded us, been a happy “free-riCP Rail in Calgary, Alberta, Photograph by Todd Korolding hinterland” since about 1970. Prior to that we were an “engaged strategic partner.” It was a Liberal, Louis St Laurent, who wrenched Canada from its comfort band pushed us, front and centre, on to the world stage as an “engaged strategic partner,” and as a “senior partner,” at that and it was another Liberal, Pierre Trudeau who, just twenty year later, dragged us down from the top tier and made us (John Manley’s description) the person who, when the bill for dinner is presented, excuses him/herself and goes to the washroom.

Dr Lindley-French admonish us to: “Face facts, Canadians! Canada is a three ocean power, all three of which will be contested spaces in the twenty-first century struggle between great liberal and great illiberal power. Canada can either join America, Britain, and others in contesting that struggle by helping to deter the likes of China and Russia, as it is now doing in the Baltic States. Or, it can choose to join soft-power peddling, free-riding Europeans trying to convince themselves and others that they really are serious about power … {and, he concludes] … Brexit was Britain’s sovereign, democratic choice. However, Brexit and the coming Anglosphere will also hasten the forced strategic choice Canada, its government, and its people will need to make. And soon.

So, I think that Julian Lindley-French has backed into the right answer, but for the wrong reasons.

The Economist newspaper, which is no fan of Brexit and even less a fan of British Foreign Secretary Boris Johnson, opines that– “THE destination [Brexit] was decided in June, by simple majority: Britain is leaving the European Union. The journey, however, will be complex and perilous, beset by wrong turnings, chicanes and elephant traps.

20160713172905theresa_may_uk_home_office_croppedThe Economist believes that Prime Minister May is likely to be leaning towards what it calls her (Conservative) party’s “dangerous instincts,” and it says that “Mrs May is at risk of putting her party before her country — with grave consequences. Brexit will determine Britain’s fortunes in the decades to come. If it is to be done at all, it must be done right.” That newspaper thinks that, “The centrepiece of the deal ought to be to secure maximum access to Europe’s single market. Brexiteers say that, once outside, Britain would eventually negotiate low or no tariffs on its trade with the EU. Yet, even if it did, tariffs are less than half the problem. Without harmonised regulations, British firms will discover that their products do not meet European requirements, and vice versa. And it is unlikely that a trade deal between Britain and the EU would cover services, including the financial sort that are among Britain’s biggest exports. A study by the Treasury before the referendum estimated that the hit to GDP within two years of Brexit would be nearly twice as large if Britain left the single market than if it remained a member … [but, while] … Mrs May seems to want to carve out a special deal with the EU, in which Britain limits immigration and determines product standards — on, say, food-labelling — while still operating fully in the single market. Perhaps the negotiations will show that this is possible. However, the signs are that she is overestimating the EU’s willingness to give ground. Each country has a veto over Britain’s status (see article). On almost every issue, from immigration to financial services, at least one of them will be reluctant to surrender its advantages.

The Economist also looks at Britain’s role in the wider world: “Amid the world’s most complex divorce, Britain’s diplomats also have another vital task. Through its membership of the EU, Britain is a member of the World Trade Organisation (WTO) and party to free-trade deals with 53 other countries. When it leaves, it will lose all that. So Britain must urgently prepare to rejoin the WTO as an individual country — which, again, requires the consent of every other member … [and] … Mrs May seemed to acknowledge the benefits of a smooth transition this week. Her proposed “Great Repeal Bill”, which will get rid of all existing EU law from the statute book, will in fact merely translate it into British law, to be chipped away later at leisure if desired. She should likewise negotiate an interim trade deal — through temporary membership of the European Economic Area, say, of which Norway is part. This would mean paying into the EU budget and accepting free movement but, in return, Britain could take as long as it needs to line up WTO accession and trade agreements with the EU and other countries, while still under the shelter of the single market … [but] … Ardent Brexiteers worry that, ensconced in such a halfway house, Britain would stay put for ever. That is indeed a possibility, and there is no reason it should not be: with half the population having voted to Remain and many of those who voted to Leave reluctant to quit the single market, a majority might favour such a “soft” Brexit.

Finally, The Economist concludes that, “The final ingredient of the approach Mrs May put forward was her broad agenda to open Britain to the world beyond the EU — which she calls “Global Britain”. In theory this should entail a willingness to welcome international capital and labour, which would benefit the country whatever its relations with the EU. Sadly, the reality looks less rosy. The home secretary, Amber Rudd, this week complained that some companies were employing too many foreigners and talked about “flushing out” the worst offenders. Likewise, Mrs May’s conference rhetoric was strikingly interventionist, putting the state at the heart of the economy. A flirtation with industrial policy sounds worryingly as if it is designed to keep foreigners out … [and] …  A Brexit of some sort looms and Mrs May will determine its course. If Britain is not to suffer a car crash, she must ignore the back-seat drivers and fix her eyes firmly on the road ahead.

Let us be clear: Britain is an important country ~ the world’s 5th largest economy, a global financial centre, and a nuclear armed military power with tough, skilled, adequately equipped, combat ready naval, land and air forces. The Brexit will not alter the fundamentals underlying all that.

I believe that the Brexit is, overall, a less bad choice than the obvious alternatives because I think the European Union is on the wrong track. I also believe that Canada must, as a matter of some urgency, negotiate a free trade deal with the United Kingdom, outside of the CETA.

I have discussed the Anglosphere and CANZUK freedom of movement before. I believe there is considerable merit in strengthening the ABCA and similar bodies, without the formalities of treaty, and expanding them include Singapore, for a start, and, gradually, 1297468079999_ORIGINALMalaysia and India and others. Equally, I believe there is merit in pursuing closer ties between Canada, Australia, Britain, New Zealand and Singapore … for a start. The TPP is critical to all this and as with free(er) trade with Britain, freedownload(er) trade with the EU and free(er) trade with Asia I believe our weakest link is our Trade Minister, Chrystia  Freeland, who I think is woefully unqualified for such a senior portfolio. But, weak link or not the onus is on her to expand Canada’s trade with the world, including Asia, Britain and Europe. Just as the onus is on Stéphane Dion and Harjit Sajjan to pursue closer diplomatic and military ties with a post-Brexit Britain and a post-Brexit Europe. I’m afraid I am not filled with confidence that Canada will even see and understand, much less grasp the opportunities that the Brexit will present.

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