Britain after Brexit
Mike Cormack

Editor's note: Mike Cormack is a writer, editor and reviewer mostly focusing on China, where he lived 2007-2014. He edited Agenda Beijing and is a regular book reviewer for South China Morning Post. The article reflects the author's opinions, and not necessarily the views of CGTN.

Finally, finally, after two extensions, destroying the premiership of Theresa May, a general election, which eviscerated the opposition Labour party and taking the United Kingdom to the brink of a constitutional crisis – finally, Brexit is taking place on Friday.

Outside the EU's single market and customs union, it is a particularly hard Brexit. This may seem odd, given the frequent assertions during the Brexit referendum that the UK could remain in them from outside the EU, but it is the logical outcome of political choices made since then.

The referendum was claimed to be in large part about the free movement of people. Ending that, meant also taking the UK out of the single market, as this ensures the free movement of people, goods, and capital.

The question then became whether the UK would stay in the customs union, which allows for frictionless trade, with no checks at national borders within the EU. This too was rejected, on the grounds that to remain inside meant being unable to negotiate trade deals with non-EU countries – although it also essentially means a customs border in the Irish Sea between Northern Ireland and the rest of the UK.

There thus could have been numerous forms of Brexit, but what has been chosen is one of the hardest forms possible beyond leaving without any deal at all. British Chancellor of the Exchequer Sajid Javid has also said the UK is free to diverge from EU rules and standards.

The clear aim is that the UK will undercut the EU by cutting "red tape," and so become a "Singapore On Thames" – a low tax, low regulation haven outside the EU attracting capital at the expense of worker rights and other standards.

Not surprisingly, the EU is not keen on attempts to undercut it. The idea of becoming a free-trade port is that you have free trade and no barriers – what Winston Churchill once called the "fiscal stake nets and tariff mud bars."

Anti-Brexit protesters in front of Downing Street in London, UK, January 8, 2020. /Reuters Photo

Anti-Brexit protesters in front of Downing Street in London, UK, January 8, 2020. /Reuters Photo

But the greater the divergence, the greater also the checks on entry to the EU, which still accounts for 45 percent of the UK's trade. And while Britain's withdrawal from the EU takes place on Friday, its trading arrangements with the bloc will expire at the end of 2020. So here, the UK has a very weak hand.

The EU, both to protect the single market and to prevent the UK from gaining a competitive advantage, is likely to play very hard ball on the trade deal. It also knows full well that a year to reach an agreement is unusually short, and that if no deal is agreed, the UK will be hurt the most. Urgency and negotiating weakness will lead, by definition, to poorer outcomes. 

Trade barriers will go up, trade friction will increase, imports will become more expensive, the cost of living will go up, and people will feel poorer, whatever happens. That's what happens when you leave the single market.

Diplomatically, the UK looks set to be similarly enfeebled. Rather absurd nostalgic dreams of a free trade bloc with the former colonies, Canada, New Zealand, Australia and perhaps even the U.S., have not been encouraged. The Commonwealth may include 53 nations with a combined population of 2.4 billion, but it has no real political or economic role.

Prime Minister Boris Johnson, it is true, is closer to U.S. President Donald Trump than his predecessor Theresa May, about whom Trump could be staggeringly rude. Yet Trump is clearly no reliable ally. He wants client states and tribute to be rendered unto him, rather than partnerships based on shared values and diplomatic aims. His administration is one almost defined by its self-interest and its disregard for the feelings and interests of other nations.

A U.S. trade deal would be the prized jewel of a Johnson premiership, but it is likely to be a tarnished one. By definition any deal is likely to be worse than the terms the UK had as part of the EU, as without the other 27 EU nations behind it, the UK will again have a much weaker negotiating hand.

This is likely to be the recurring refrain of the UK's post-Brexit future. Militarily, the UK remains a leading member of NATO. But a weakened economy will mean declining capacity, although this has been true since the 2007 financial crisis, since when a policy of austerity meant severe cuts to defense spending by around 8 percent a year.

In science, technology, finance, industry, tourism, even the arts and culture, Brexit will mean fewer connections, diminished activity and reduced capability, as Britain inexorably becomes poorer, weaker, and of less consequence.

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