Brexit, a blessing in disguise

The 31st of January, the day the first member state left the European Union. What makes it especially memorable is the fact that the UK joined almost 50 years ago the then called European Economic Community, and has had great influence ever since. Brexit might have left the EU a little less wealthy and powerful, whilst also converting a former partner into a potential competitor, but on the other side of the canal things aren’t looking so great either. More than 60 percent of the UK’s trade comes from the EU, and if the current trade agreements won’t follow through at this year’s end, the United Kingdom will have to pay tariffs under WTC rules, severely influencing their competitive edge in Europe.

If this were to happen the chances of the UK reaching out to the United States are quite high, which raises the question whether the US will wait out the current negotiations or form an alliance with either the EU or UK to give one of them leverage. Reason for the latter might be that the US has an incentive to alter the trade agreement between the UK or EU in their favor, namely TTIP for the EU or any future deal with the UK. Given that the UK has accepted Huawei to play a limited role in the construction of Britain’s 5G mobile network, something the US was heavily against, the chances of the US choosing to form an alliance with the EU is quite substantial. 

As said, the transition period has a deadline at the end of this year, a very short time span to discuss such an extensive range of topics. Both parties agree that the negotiations should run as transparent and peaceful as possible, yet looking at the rhetoric of Johnson and actions taken by the EU, their intentions might be a bit too optimistic. Johnson already stated that extending the transition period will not be an option for the UK, and has also threatened to leave the negotiations if his demands on free trade aren’t met. He has stated to maintain current standards concerning climate goals, the economy and society, and even suggested that the UK might be further ahead on certain topics like animal rights. The EU on the other hand has already given 20 million in credit to the first Brexit refugee, Azimo, a fintech currently settled in Amsterdam. The chances of the EU convincing companies to place their HQ within Europe for benefits are quite high, especially with the UK having such an advanced financial services industry. Concluding, while both have intentions to undergo a tariff and quota free agreement, it doesn’t look realistic. 

One of the most important topics that need to be discussed is Northern Ireland. Both agreed that in the future Northern Ireland should abide EU regulations, even after the transition period has passed. The UK currently suggested a customs border between them and Northern Ireland, where all goods exported will be taxed by the EU. If the goods stay in Northern Ireland, the firms will get a refund of their import taxes, more often called tariffs.

A lot of headaches ahead, yet for the Netherlands Brexit also presents a great opportunity. Since the referendum in June 2016 the Netherlands has increased its diplomatic significance within the EU, and now that Britain has left, there is an enormous role to be filled. Both Germany and France believe that the Netherlands are a perfect candidate to be the gate between Europe and the rest of the world, with prime minister Rutte having a great reputation and ample experience, as well as the country having a strong and healthy economy. The current mentality of the Dutch representatives and delegates within the EU should change if the Netherlands wants to step into the spotlight, there will be no more room for leaning back and hiding behind other countries. The Netherlands should develop new perspectives and ideas for the future of the EU, where they might now agree with Germany as to whether the budget should be reduced or not, they should be able to back their opinion with ideas, ideals and priorities.

Implementation might be slow and awkward in the beginning, altering passive policy with assertive leadership might be tough, but Germany has proven it’s possible after the crisis hit and they had to take initiative in 2009. It is now up to the Netherlands to prove their worth to Europe.

Sebastian Cornielje