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Weekly Standard

The Post-Brexit Transition

President Obama thinks Britain made a mistake by voting to leave the European Union. So does Secretary of State John Kerry. So do most on the left of American politics. Most on the right see Britain’s so-called Independence Day as a sensible democratic decision to shed the protectionist and regulatory constraints on growth that membership in the EU entails (witness the long period of slow growth and double-digit unemployment in many EU member states).

They see, as well, a long-needed move to regain control of Britain's borders and stem the tide of immigration that, unchecked, threatens to engulf the culture of the United Kingdom. German chancellor Angela Merkel has welcomed over a million Syrian and other immigrants to the EU, and many will want to move on from Germany and other EU countries to Britain once they have the necessary papers. Should Turkey become a member, its largely Muslim population would benefit from the "free movement of persons" privilege that comes with EU membership, and many would set their sights on Britain, where the jobs and welfare benefits are. British voters decided that they have no desire to endure the problems France is having with a largely unassimilable population, and that Germany has begun to experience as Muslim cultural attitudes towards women affect the freedom of movement of German women within their own towns.

In deciding which side has the better of the argument, consider the attitude of the spurned members of the EU. Not for them Henry Kissinger's advice: "The EU should not treat Britain as an escapee from a prison but as a potential compatriot. .  .  . Britain and Europe together must .  .  . return .  .  . to their historical role as shapers of international order."

Instead of a constructive new relationship between the EU and the U.K., though, we see the appalling spectacle of Jean-Claude Juncker, the European Commission president, hoping Britain's departure will enable him to push through his favorite project, a European Army to react "more credibly [than NATO] to the threat to peace in a member state." Juncker, whose appointment as EC president Britain's prime minister David Cameron opposed, insists that the Brexit vote means continental ties with Britain must be cut, the sooner the better.

While every sane observer agrees that Remain, the campaigners who wanted Britain to stay in the EU, would have won if only the EU had given it even temporary relief from its "free movement of persons" holy-of-holies, Juncker says the inability of Britain to control its borders had nothing to do with the referendum outcome. He blames decades of British leaders telling "citizens that something is wrong with the EU, that the EU is too technocratic, too bureaucratic." So all of those new buildings going up in Brussels are to house the amazing, dynamic new digital-era businesses for which the EU is so famous? Name one. You can't. Which is why the European Commission is so eager to harass our FANG—Facebook, Amazon, Netflix, Google—a group threatening incumbent European businesses, who respond by seeking shelter in the hearing rooms of the eurocracy rather than in the R&D units of their own firms.

Meanwhile France, for the first time in over 70 years, is willing to stand up to the Germans, whose chancellor wants Britain to be given time to sort out its political problems before negotiations on exit terms begin. President François Hollande is demanding a series of protectionist measures to shield France's clapped-out, double-digit-unemployment economy from the competition of British financial services industries. He and the European Central Bank want to centralize control of European financial businesses under a single supervisor and end the right of London-based banks to do much of the business they now do on the continent. In effect, he seeks a cartel to lock Britain out of the EU and, of course, the EU out of access to the world's largest and most efficient capital market. If you believe that the cartel will not turn its attentions to its U.S. competitors soon, I have a tunnel under the channel to sell to you.

France wants to cripple both American and British businesses by banning the use of English, the only language spoken by a majority of adult residents of the EU. French takes second place as one of the three working languages in the European parliament, German third. The official line is that all 24 languages spoken in the member states are official languages, which makes a total of more than 500 possible combinations since each language must be translated into 23 others. That would be an expensive proposition given the volume of regulations pouring out of Brussels, so not all documents are translated into all languages for working purposes. France apparently hopes that by barring the use of English, it can capture the leadership of Europe, since in most cases only it will understand what is really going on in the eurocracy: Only a small percentage of EU adults are capable of holding a conversation in French. Just how French executives will do business around the world without using English is a mystery. And good luck in banning the languages of the new immigrants, who have little intention of assimilating.

The antipathy to Britain by France and the eurocracy is now shouted rather than whispered. The Juncker-Hollande axis of regulators and protectionists will leave the EU just where Margaret Thatcher found Britain: trade unions running wild, unemployment high, economic growth nil, taxes so high that entrepreneurship and risk-taking are discouraged, regulations pouring off the presses. Brexit may be something of a gamble, but the odds on Britain succeeding in the globalized economy of the 21st century without the drag of the EU are a lot better than the odds of making its way in that competitive world while tied to the Franco-German vision of the shape of the European Union.

So best for both Leavers and Remainers to shrug off the transition costs, which Washington should take such steps as it can to mitigate. It would be entirely consistent with Obama's "lead from behind" policy to follow Australia, India, and South Korea in offering to negotiate a trade deal with Britain, as Paul Ryan is urging us to do with "our indispensable ally" to "show our solidarity" and assure a "smooth relationship" post-Brexit. And it certainly would be in the interests of the American banks that have been such longtime supporters of Hillary Clinton to advise the EU that any restrictions on the access of our London-based banks to the EU market would be reciprocally imposed on the access of European banks to our market.

Britain retains advantages that most countries envy. It has the English language. It sits in a time zone that gives it access to world trade on a 24-hour-a-day basis. It has the rule of law, assuring investors that their gains will not be Putinized and handed over to cronies of the state or subjected to crushing taxes. It has a world-class services industry that outcompetes even America in trading, design, music, and insurance. London, its traffic and costs notwithstanding, remains attractive to the talented young, offering cultural riches and educational opportunities not available in any other city. It has close ties with America, where many politicians and policymakers have repudiated outgoing President Obama's threat to place Britain at the back of the trade-pact queue if it leaves the EU. And its network of foreign embassies is staffed by professionals skilled at representing its interests around the world, especially in the United States, where I have watched it, close-up, in action for decades with awe and admiration.

Most important from our point of view, as historian Andrew Roberts has pointed out, Britain has been at the head of the queue when we needed an ally to put boots on the ground alongside our troops, reaffirming "the special relationship." That relationship is grounded in "a common language and in a comparable system of political values reinforced by fighting together in common wars," as Kissinger puts it.

A United Kingdom unencumbered by EU membership will also stand with us as we resist the rising tide of protectionism. Obama and Kerry have graciously agreed to respect the democratic result of the British referendum. More than passive respect is required. It is in our interest to reaffirm the special relationship by working out a mutually advantageous trade relationship with Britain. Sooner rather than later, so that it knows we have its back as it enters into divorce negotiations with the EU, many of its members determined to teach Britain a lesson in order to discourage other potential leavers.

Kissinger believes that "American leadership in reinvigorating the contemporary order is imperative." That is a scary thought, given that the administration is in a continuing search for methods of shedding the burden of such leadership.