While the full economic and political impact of the Brexit referendum remains to be seen a year after Britons voted to leave the European Union, it is clear that the break between the United Kingdom and the 27 other members of the EU will not be painless.
In a panel discussion Tuesday at the American Enterprise Institute, former U.S. Ambassador John R. Bolton said that EU leaders are “worried about the precedent that Brexit sets” for other countries that also might be intent on leaving the intergovernmental organization.
He predicted that EU leaders might unjustly make an example of the United Kingdom by undermining the negotiations for a free-trade agreement in response to Brexit.
“There is a theology about the European Union, a secular theology, that basically holds that no rational person can disagree with the idea that the European Union is a good thing,” Mr. Bolton said. “That’s why the UK’s hearsay is so serious and so threatening, and that’s why many leaders in the U.K. are driven to say the blasphemers must be punished.”
If the EU were to take punitive measures in negotiating the United Kingdom’s exit from the union, Mr. Bolton anticipates that the United States — especially under the Trump administration that has openly supported Brexit — would come to Britain’s aid.
Under current EU treaties, Britain cannot negotiate any trade agreement with other countries outside the 28-nation bloc until its official separation, which is expected to occur March 2019. That said, British Prime Minister Theresa May met with President Trump in January to discuss the preliminary stages of a post-Brexit trade deal.
“The United States is not bound by the EU treaties,” Mr. Bolton said, clarifying that the U.S. doesn’t violate any rules when conducting trade talks with the U.K. “We can negotiate with anybody that wants to negotiate with us.”
European Union Ambassador to the U.S. David O’Sullivan rejected Mr. Bolton’s prediction of “punitive” treatment of the U.K. At the same time, however, Mr. O’Sullivan said that while Britain has every right to leave the union it voluntarily entered decades ago, it would be “extremely naive to imagine” that the U.K. could separate from the “largest single market in the world” and still benefit as if it were still a member.
“This not something that the EU is doing to the U.K., this is something that the U.K. has chosen to do to itself and to the rest of the EU,” Mr. O’Sullivan said. “They have opted to leave. We therefore, have to deal with the consequences of that.”
Since the Brexit referendum vote in June 2016, the British pound has fallen about 15 percent, which has significantly raised the inflation level and compressed real wages in the U.K. Also, the GDP growth of the nation has slowed, now at a 1 percent growth rate as opposed to the 2 percent growth rate it had before the vote.
Economists, like Adam Posen who participated in the panel discussion, said that Britain’s departure from the EU effectively has acted as a trade barrier for the country, which has hindered the UK’s economy.
Hugo Gurdon, editorial director of the Washington Examiner and a supporter of Brexit, expects for the initial adjustment to post-Brexit life may be turbulent. He added that the success of Brexit is contingent on the nation’s effective governing in the immediate future and that it is too early to draw any definitive conclusions.
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