Britain tries to roll back globalization

The United Kingdom is conducting a great experiment that the rest of the world should watch carefully. It is trying to figure out how to reverse economic globalization.

More to the point, it is trying to figure out whether it is possible to do so.

That is what the so-called Brexit debate is about. Britons voted by a small majority three years ago to exit the European Union and go it on their own.

But no one has any idea how to do so. And so there is this crazy political stalemate. For outsiders, it is like watching the proverbial train wreck in slow motion.

The governing Conservatives are deeply split over Brexit. But so is the opposition Labour party.

Prime Minister Theresa May keeps on putting Brexit schemes before the Commons. And the Commons keeps on defeating them.

She is clearly incapable of coming up with a scheme that can win parliamentary support. But as May correctly points out, so is everyone else.

In a normal world, May would have to resign. But she doesn’t, in large part, because no one else wants her job.

Even Labour Leader Jeremy Corbyn’s motions of no confidence in the government have a rote feel about them. And no wonder. If Labour did become the governing party, it would have to come up with a solution.

Behind all the lingo of hard and soft borders — behind the politics of the Scottish Nationalists and the Ulster Unionists, the craven ambition of Conservative would-be putschists like Boris Johnson and the barely cloaked racism of the United Kingdom Independence Party — is the fact that no one knows what would happen if Britain really and truly left the EU.

The usual suspects predict disaster. The Bank of England says that the economy would sink into recession. There is talk of capital flight, inflation and food shortages.

Canadians will be familiar with some of this. When U.S. President Donald Trump imposed punitive tariffs on Canadian steel and aluminum, dire predictions abounded. But so far, the effect of those tariffs has been contained.

An end to free trade, it seems, does not eliminate all trade.

Similarly, the tariff war between the U.S. and China was expected to derail the world economy. But so far, that economy continues to hum along.

Still, there cannot help but be some pain from a real divorce between Britain and the EU. Their economies are deeply intertwined.

Past investment decisions were based on the assumption of free movement of goods, services, capital and labour between Britain and the rest of the EU.

Changing the rules of the game is bound to cause pain. But how much pain and for how long? No one knows.

The U.K. joined what was then called the European Economic Community in 1973, largely because British businesses and financiers wanted privileged access to the continental market. The British Empire was no more and capital was looking for new alliances.

Similar motives pushed Canadian business 15 years later to seek a free trade deal with the United States.

But in both cases, not everybody was happy. The 1988 free-trade debate in Canada was bitterly divisive. So is the Brexit debate in the U.K.

Many workers resent the EU’s labour mobility rules, which allow virtually unrestricted immigration from the continent. They worry that foreigners are taking their jobs.

Many employers resent the regulations imposed by the EU.

The U.K. was split virtually down the middle in the 2016 Brexit referendum. Polls suggest that if another referendum were held today, those wishing to remain in the EU might win by a narrow margin.

Bill Emmott, a former editor-in-chief of the Economist, reckons that the U.K. faces only two realistic choices. It could hold another referendum and hope that this time, the pro-EU forces win (his preference).

Or, it could sever all ties with the EU and stride out into the world alone.

The first option would create the least amount of bother. It would be as if the Brexit debate had never happened.

But the second would be more interesting. It would tell the rest of the world whether globalization is reversible.

Thomas Walkom is a columnist with Torstar Syndication Services.

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