The right Canadian model for Brexit Britain

In Blog by Philippe Legrain0 Comments

Britain has much to learn from Canada’s modest realism in negotiating with a neighbouring economic giant

By Jack Graham

“Britain clings to imperial nostalgia as Brexit looms” (Washington Post).

“Whatever form Brexit eventually takes it is a rearward step into an imagined past” (Globe and Mail).

“With Brexit, [Britain] seems to be embracing an introverted irrelevance” (New York Times).

Having moved from the UK to Toronto last summer, I’ve been struck by the fact that North American perspectives on Brexit have a clear underlying theme: that leaving the European Union is accelerating Britain’s decline in influence.

What you might not realise is that Canadians can somewhat relate to Britain’s plight. They know what it is like to be the northern neighbour of a giant trading bloc. They understand the pains of renegotiating a comprehensive trade deal. And they too have had to make painful concessions to the demands of the larger power. The price of maintaining close economic relations with the US is that Canada often has to follow America’s lead.

Canada’s approach is very different to Britain’s. Its relationship with the United States is informed by a modest realism. In negotiating the US Mexico Canada Agreement (USMCA) – which replaces the North American Free Trade Agreement (NAFTA) – Canadians were painfully aware of the limits of their leverage. While their government was firm and pushed back wherever possible, it refused to overpromise to the public on how much it could realistically achieve.

Ultimately, Justin Trudeau’s government had to swallow certain hard truths. When negotiating with a bigger partner that has less to lose than you do, compromises have to be made. You can’t kick down the White House door and expect anything but a bloody nose – and in this case it was President Trump picking a fight.

Compare that to the Brexit negotiations. Instead of challenging unrealistic expectations of what Britain could achieve, Theresa May has torn herself in knots with her self-imposed red lines – the prime minister’s long list of irreconcilable promises – leaving herself very little room to manoeuvre. The result is deadlock in the British parliament and much of the public supporting crashing out of the EU without a deal.

Far from adopting a modest realism, Britain’s politicians have often opted for bombastic nationalism. But while taking a tough stance in negotiations is one thing, expecting a bloc of 27 countries to bend its fundamental rules to spare Westminster’s blushes is utterly unrealistic.

No doubt the hangover from Britain’s imperial past still deludes many politicians into thinking that Britain can play by its own set of rules, refuse to compromise and force other countries to submit to its will. Politicians still hark back to historical triumphs when Britain was a world superpower, with proud leaders such as Winston Churchill putting other countries in their place. Misplaced emotional references to the Second World War displace reason and strategy.

Granted, Canada’s relationship with the US is even more lopsided than the UK’s with the EU-27. Canada’s economy is around a twelfth of the US’s, to which it sends around three-quarters of its exports; Britain’s economy is around a sixth of the EU-27’s, where sends 44% of its exports. But in the negotiations between Brussels and London, it is still clear which side has the upper hand.

Canada also has a century of experience dealing with its powerful neighbour as a fully independent state. In contrast, Britain’s diminished power as a likely soon-to-be ex-member of the EU is still very new, and it needs to learn quickly.

A post-Brexit priority is a trade deal with the US, to which around 18% of British exports go. While Brexiteers bleat on about the “special relationship” between the UK and the US, the US now views Britain as an “easy economic mark, not a strategic partner,” according to Thomas Wright of the Brookings Institution. A president who puts America First owes Britain no favours. And even with a change in administration in 2020, any future US president and Congress are bound to take advantage of Britain’s weakness to advance the interests of US companies and workers.

Since the loss of its empire, Britain has continued to punch above its weight globally. As a nuclear power with a permanent seat on the United Nations Security Council and substantial soft power through the English language, culture, education and other ties, its global influence has greatly exceeded its diminished economic circumstances. And as a member of the EU, it has negotiated with the US as an equal and with the rest of the world as a superpower.

Yet the UK economy now accounts for a mere 3% of global output. Going it alone is going to be a very rude awakening. Time to take a (maple) leaf out of Canada’s book and be more realistic about what Britain can achieve internationally.