Britain's Future Lies With America, Not Europe
In 1952, then-U.S. Secretary of State Dean Acheson said that "Britain has lost an empire but has failed to find a role." Sadly for Britain, it decided to renounce its longstanding global cultural, legal and philosophical links to North America and instead looked for that role in Europe. Despite its geographic proximity to Britain, the Continent is nevertheless home to a host of cultures, legal systems and governing philosophies very different from those of traditionally liberal Britain. The consequences from that bad choice have bedeviled Britain for decades.
Now, as a result of Prime Minister David Cameron's stance at the recent EU summit, Britain and Europe are at a crossroads. America could help Britain make the right choice, to both countries' mutual benefit.
French President Nicolas Sarkozy helpfully summed up the results of this month's summit. He told Le Monde that there are now two Europes, one that "wants more solidarity between its members and regulation, the other attached solely to the logic of the single market." The Europe of regulation wants to press forward with deeper integration, stringent budget rules and a transition away from nation-state democracy.
The problem is that no one asked the peoples of Europe whether they wanted this. Nationalism is on the rise. Budget rules have been flagrantly ignored in the past, and the Franco-German plan does nothing to deal with the euro's structural problems, which make southern European countries grossly uncompetitive.
It is obvious to most outsiders that the euro zone's problems remain. The rating agencies have been unimpressed, and downgrades of most euro-zone members and their banks are now more likely than ever. This meant that Mr. Cameron was left with two choices: strike out for the shore or drown with the rest.
Perhaps the most interesting thing about Mr. Cameron's decision is the way he made it. It is now clear that he made an attempt—as he had promised British voters—to repatriate powers away from Brussels. This attempt was rebuffed with some prejudice. Given the outright hostility to Britain now evident in the European Union establishment, any further attempt at repatriation will be a non-starter. The implications are considerable.
The European Economic Community (EEC) for which the British signed up in a 1975 referendum—a community of free trade and cooperation, not supranational bureaucracy—is long gone. Worse, even today's less-palatable EU will soon no longer be on offer. Sometime in the next few years at most, Britain will likely face the choice between immersion in a powerful centralized European mega-state and full exit.
Most probably, the choice will be made in an atmosphere of crisis, with dramatic media coverage proclaiming impending doom for Europe. Britain today needs to think seriously about a Plan B, so that it does not have to take an option it will regret for lack of coherent alternatives.
Britain does have other choices. To find the country's new role, British leaders should look to North America.
Alone among EEC members, Britain narrowed some of its major trade networks when it joined. It also traded ordinary Britons' right to virtually bureaucracy-free movement, temporary or permanent, between the U.K. and British Commonwealth nations. This meant losing easy access to prosperous places like Canada, Australia and New Zealand, which enjoy plentiful jobs and high standards of living, for the largely theoretical right to take a job in Düsseldorf or Lille. While much trust was lost between Britain and the rest of the Commonwealth because of this move, strong personal, cultural and economic ties remain and could be revived. Ask the average Briton where he'd feel more at home, Paris or Toronto.
Canada and Australia have well-managed, vibrant economies. Both countries sit on huge deposits of natural resources of ever-increasing value. Britain's top-tier financial sector and still-excellent technical capabilities already play a role in Canada's economy. These ties could be much strengthened.
Britons also feel at home south of the Canadian border. Contrary to an oft-repeated myth, links between Britain and the United States are not reducible to the personal relationships between presidents and prime ministers. The U.S. and the U.K. have always been each other's primary financial partners. A few simple measures could substantially deepen this relationship, especially once Britain no longer needs to adhere to EU rules.
Foremost among these would be to admit a post-EU Britain to the North American Free Trade Agreement. Nafta is not a perfect vehicle, but it has the enormous advantage of already existing, with a nearly 20-year track record behind it. And unlike the EU, Nafta would not seek to impose a single social vision on its members. For example, Nafta has had no effect on Canadian social policy, which is very similar to Britain's—except for Canada having more revenue to pay for it all.
The ongoing euro crisis will not be resolved any time soon, and America will continue to be impacted by bank write-downs and declines in U.S.-European trade. Increasing U.S.-U.K. trade would be one relatively quick and effective way of taking up some of the slack.
Up to now, however, the U.S. has pursued a policy of propping up the euro while discouraging British independence from Brussels. This is incredibly short-sighted. Using the vehicles of the Federal Reserve and the International Monetary Fund to try to fill the gaping hole in Europe's finances will get everybody nowhere. Instead, British, American and Canadian policy makers (along with their Nafta partners in Mexico) should be taking the long view and preparing for a future in which the unsustainable euro zone inevitably collapses. Welcoming Britain back into the North Atlantic economic community would be a win-win for all involved.