Brexit will not be a walk in the park for Boris Johnson


This morning British voters woke up to the news that Boris Johnson’s Conservative Party had beaten Labor to win a dominant parliamentary majority in Britain’s election yesterday.

Johnson achieved this feat by harnessing extreme voter fatigue over the Brexit issue and campaigning more effectively on a “Get Brexit Done” platform. He promised that pulling out of Europe would allow the country to move towards a better economic future. It would do this by ridding the UK of burdensome EU regulations and negotiating favorable trade deals with the US and other non-EU countries.

One has to wonder how long it will take British voters to realize that despite Johnson’s convincing victory, Brexit will not be the walk in the park he promises, and that a bumpy economic road remains ahead of the country. .

One also has to wonder how long it will take British voters to grasp the momentum that the Scottish National Party’s strong performance in the election will now trigger another Scottish independence referendum. This could pose a real threat to the maintenance of the political integrity of the UK.

Certainly, Johnson’s comfortable victory will allow him to secure the swift passage of the Brexit Withdrawal Agreement he brokered last October. But this will only set the stage for the UK to enter a one-year transition period with its European partners to lead the much more difficult phase of negotiating a permanent economic relationship between the EU and the Kingdom. -United.

Johnson has put the UK in a weak position in upcoming trade talks with the EU. It did so by categorically ruling out the possibility of seeking an extension beyond the current December 2020 end date of the transitional period. This means the UK will be desperate to get a European trade deal done quickly, because failing to do so risks the UK leaving Europe with adverse consequences for its economy.

It would be an understatement to say that the UK economy can ill afford another year of uncertainty over whether or not in the end the country could collapse outside of Europe. Yet that is what Johnson has done by ruling out an extension beyond 2020. This leaves the UK with very little time to negotiate a complex trade deal that normally takes years to negotiate.

More Brexit uncertainty would come at an inopportune time for the UK economy. Such uncertainty has already taken a heavy economic toll. Indeed, in the three years since the June 2016 Brexit referendum, the UK has gone from the best performing economy of the G-7 countries to the weakest. At the same time, investment levels in the UK have virtually stagnated and the country is now flirting with an economic recession.

Under these circumstances, the last thing the UK economy needs is the political uncertainty that could be generated by a call for another Scottish independence referendum. Unfortunately, it is difficult to see how this can be avoided. Scotland voted overwhelmingly for the Scottish National Party, which had campaigned on a pro-European platform. Furthermore, the separate treatment of Northern Ireland in Johnson’s Brexit Withdrawal Agreement set a precedent for treating different parts of the UK differently when it comes to their relationship with the European Union.

As the June 2016 referendum approached, Boris Johnson promised that when it came to Europe, the UK could both have its cake and eat it. Ahead of the general election this week, Johnson promised he had a Brexit deal ready to go and that the UK would soon negotiate a very favorable trade deal with the European Union.

Sadly, it won’t be long before the British electorate learns that just as Johnson promised on Brexit in 2016, he did the same during the last election campaign. More fortunately, they might find that now that he has a majority in parliament, he will reverse his outright rejection of asking Europe for an extension to the 2020 end date to give the UK more time to achieve a favorable permanent EU. -Commercial agreement with the United Kingdom.

Desmond Lachman is a resident scholar at the American Enterprise Institute. He was previously Deputy Director of the Policy Development and Review Department at the International Monetary Fund and Chief Emerging Markets Economic Strategist at Salomon Smith Barney.


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