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| Never mind Brexit, or even Europe. The future is Eurasian | Never mind Brexit, or even Europe. The future is Eurasian |
| (5 days later) | |
| Bruno Macaes | Bruno Macaes |
| Wed 24 Jan 2018 12.38 GMT | Wed 24 Jan 2018 12.38 GMT |
| Last modified on Wed 14 Feb 2018 15.28 GMT | |
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| Europe is disappearing. Not because – as you often hear – we are returning to a world of small nations, proud and sovereign, but because Europe is being replaced by a much vaster and more interesting geographic unit: Eurasia, the combination of the two continents of Europe and Asia, stretching from Lisbon to Shanghai or Jakarta. The rise of Asia forces us to place the continents on the same level, no longer separated by different levels of historical development. New connecting infrastructure, trade and the permeability of borders are drawing the whole of Eurasia together. | Europe is disappearing. Not because – as you often hear – we are returning to a world of small nations, proud and sovereign, but because Europe is being replaced by a much vaster and more interesting geographic unit: Eurasia, the combination of the two continents of Europe and Asia, stretching from Lisbon to Shanghai or Jakarta. The rise of Asia forces us to place the continents on the same level, no longer separated by different levels of historical development. New connecting infrastructure, trade and the permeability of borders are drawing the whole of Eurasia together. |
| The important question today is not what Europe will look like in the future, but what Eurasia will become. What balance will the western peninsula of the supercontinent – the European Union – be able to establish with Russia, China and India? What dangerous game of influence will these four main actors be playing in the crowded space created by the end of the cold war and the rise of Asian economic power? Influence now flows in both directions, no longer only from west to east. In this new Eurasian age, the notion that Europeans are special – that a wall separates them from Asia – is quickly being exposed as a pious fiction. | The important question today is not what Europe will look like in the future, but what Eurasia will become. What balance will the western peninsula of the supercontinent – the European Union – be able to establish with Russia, China and India? What dangerous game of influence will these four main actors be playing in the crowded space created by the end of the cold war and the rise of Asian economic power? Influence now flows in both directions, no longer only from west to east. In this new Eurasian age, the notion that Europeans are special – that a wall separates them from Asia – is quickly being exposed as a pious fiction. |
| The UK could sign up to all the EU’s rules and regulations, staying in the single market – which provides free movement of goods, services and people – and the customs union, in which EU members agree tariffs on external states. Freedom of movement would continue and the UK would keep paying into the Brussels pot. We would continue to have unfettered access to EU trade, but the pledge to “take back control” of laws, borders and money would not have been fulfilled. This is an unlikely outcome and one that may be possible only by reversing the Brexit decision, after a second referendum or election. | The UK could sign up to all the EU’s rules and regulations, staying in the single market – which provides free movement of goods, services and people – and the customs union, in which EU members agree tariffs on external states. Freedom of movement would continue and the UK would keep paying into the Brussels pot. We would continue to have unfettered access to EU trade, but the pledge to “take back control” of laws, borders and money would not have been fulfilled. This is an unlikely outcome and one that may be possible only by reversing the Brexit decision, after a second referendum or election. |
| Britain could follow Norway, which is in the single market, is subject to freedom of movement rules and pays a fee to Brussels – but is outside the customs union. That combination would tie Britain to EU regulations but allow it to sign trade deals of its own. A “Norway-minus” deal is more likely. That would see the UK leave the single market and customs union and end free movement of people. But Britain would align its rules and regulations with Brussels, hoping this would allow a greater degree of market access. The UK would still be subject to EU rules. | Britain could follow Norway, which is in the single market, is subject to freedom of movement rules and pays a fee to Brussels – but is outside the customs union. That combination would tie Britain to EU regulations but allow it to sign trade deals of its own. A “Norway-minus” deal is more likely. That would see the UK leave the single market and customs union and end free movement of people. But Britain would align its rules and regulations with Brussels, hoping this would allow a greater degree of market access. The UK would still be subject to EU rules. |
| A comprehensive trade deal like the one handed to Canada would help British traders, as it would lower or eliminate tariffs. But there would be little on offer for the UK services industry. It is a bad outcome for financial services. Such a deal would leave Britain free to diverge from EU rules and regulations but that in turn would lead to border checks and the rise of other “non-tariff barriers” to trade. It would leave Britain free to forge new trade deals with other nations. Many in Brussels see this as a likely outcome, based on Theresa May’s direction so far. | A comprehensive trade deal like the one handed to Canada would help British traders, as it would lower or eliminate tariffs. But there would be little on offer for the UK services industry. It is a bad outcome for financial services. Such a deal would leave Britain free to diverge from EU rules and regulations but that in turn would lead to border checks and the rise of other “non-tariff barriers” to trade. It would leave Britain free to forge new trade deals with other nations. Many in Brussels see this as a likely outcome, based on Theresa May’s direction so far. |
| Britain leaves with no trade deal, meaning that all trade is governed by World Trade Organization rules. Tariffs would be high, queues at the border long and the Irish border issue severe. In the short term, British aircraft might be unable to fly to some European destinations. The UK would quickly need to establish bilateral agreements to deal with the consequences, but the country would be free to take whatever future direction it wishes. It may need to deregulate to attract international business – a very different future and a lot of disruption. | Britain leaves with no trade deal, meaning that all trade is governed by World Trade Organization rules. Tariffs would be high, queues at the border long and the Irish border issue severe. In the short term, British aircraft might be unable to fly to some European destinations. The UK would quickly need to establish bilateral agreements to deal with the consequences, but the country would be free to take whatever future direction it wishes. It may need to deregulate to attract international business – a very different future and a lot of disruption. |
| As Britain leaves the European Union, it might want to make sure it does so for the right reasons. If it hopes to leave in order to ward off outside influences and recreate a strong British identity, the clash with political reality will be a painful one. If Europe is too small a stage for dealing with the political challenges of today, what must be said of a tiny island on its periphery? | As Britain leaves the European Union, it might want to make sure it does so for the right reasons. If it hopes to leave in order to ward off outside influences and recreate a strong British identity, the clash with political reality will be a painful one. If Europe is too small a stage for dealing with the political challenges of today, what must be said of a tiny island on its periphery? |
| Brexit takes two basic forms: nostalgia and change, past and future. Like Janus, Brexiteers gaze in different directions, while agreeing that Europe is not the solution. Some look to a mythical past before the European Union; others place all their hopes in a future when Britain will rejoin a quickly changing world, a world that no longer looks to Europe for inspiration. | Brexit takes two basic forms: nostalgia and change, past and future. Like Janus, Brexiteers gaze in different directions, while agreeing that Europe is not the solution. Some look to a mythical past before the European Union; others place all their hopes in a future when Britain will rejoin a quickly changing world, a world that no longer looks to Europe for inspiration. |
| If the great question of our century is how Europe and Asia will be connected, the UK could yet become one of the most important hinges holding the supercontinent together. Let it embrace its immigrant communities, so many of them coming from South Asia and Hong Kong. Indeed, as the case of Hong Kong itself illustrates, no one is better able to take advantage of economic opportunities in large, turbulent, fast-growing economies than those who left them behind. Britain can be a driver of economic growth in India, Indonesia and elsewhere in Asia – and greatly benefit from it. With Japan, it can establish privileged partnerships in the development of robotics, AI and self-driving vehicles. | If the great question of our century is how Europe and Asia will be connected, the UK could yet become one of the most important hinges holding the supercontinent together. Let it embrace its immigrant communities, so many of them coming from South Asia and Hong Kong. Indeed, as the case of Hong Kong itself illustrates, no one is better able to take advantage of economic opportunities in large, turbulent, fast-growing economies than those who left them behind. Britain can be a driver of economic growth in India, Indonesia and elsewhere in Asia – and greatly benefit from it. With Japan, it can establish privileged partnerships in the development of robotics, AI and self-driving vehicles. |
| Second, let it take full advantage of its specialisation in services and, first of all, financial services. While Germany and China head to an inevitable clash about who will lead the next industrial revolution, Britain is in possession of that elusive gold dust that Asian manufacturing powerhouses will be missing for a long time: cutting-edge services and finance. This gives it leverage over China, but it also offers endless possibilities for cooperation and trade, starting with the question of how best to finance and hedge China’s mammoth infrastructure and development investments. | Second, let it take full advantage of its specialisation in services and, first of all, financial services. While Germany and China head to an inevitable clash about who will lead the next industrial revolution, Britain is in possession of that elusive gold dust that Asian manufacturing powerhouses will be missing for a long time: cutting-edge services and finance. This gives it leverage over China, but it also offers endless possibilities for cooperation and trade, starting with the question of how best to finance and hedge China’s mammoth infrastructure and development investments. |
| More fundamentally, exiting the European Union provides new degrees of freedom. The UK would do well to think more deeply – and more seriously – about how to use them. No longer committed to one of the sides, it can work as a go-between. Outside the single market, it may adapt its rules and regulations to this goal. On occasion, it may opt to place itself between the European Union and the Asian giants, profiting from both. It may be more open to learn from a world in the midst of a great upheaval. Its small size will force it to learn. In brief, Britain may become a bridge between Europe and Asia. It may become part of the fundamental infrastructure connecting the two ends of the supercontinent. | More fundamentally, exiting the European Union provides new degrees of freedom. The UK would do well to think more deeply – and more seriously – about how to use them. No longer committed to one of the sides, it can work as a go-between. Outside the single market, it may adapt its rules and regulations to this goal. On occasion, it may opt to place itself between the European Union and the Asian giants, profiting from both. It may be more open to learn from a world in the midst of a great upheaval. Its small size will force it to learn. In brief, Britain may become a bridge between Europe and Asia. It may become part of the fundamental infrastructure connecting the two ends of the supercontinent. |
| In this, a post-EU Britain would be trying to emulate the way in which Singapore was quickly able to replace access to the Malaysian hinterland with trade and investment links with more distant markets. Just as Singapore became an Asian country more deeply connected with Europe and the United States than with its Asian neighbours, Britain could in just a couple of decades vastly expand its links with four of the five largest economies of the 21st century: China, Japan, India and Indonesia. | In this, a post-EU Britain would be trying to emulate the way in which Singapore was quickly able to replace access to the Malaysian hinterland with trade and investment links with more distant markets. Just as Singapore became an Asian country more deeply connected with Europe and the United States than with its Asian neighbours, Britain could in just a couple of decades vastly expand its links with four of the five largest economies of the 21st century: China, Japan, India and Indonesia. |
| Is a new Eurasian capital being born on the shores of the Thames? It would be perhaps a proper ending to Europe’s story, as the country most responsible for taking European ideas to Asia becomes a new host for Asian ideas in Europe. | Is a new Eurasian capital being born on the shores of the Thames? It would be perhaps a proper ending to Europe’s story, as the country most responsible for taking European ideas to Asia becomes a new host for Asian ideas in Europe. |
| • Bruno Macaes is the author of The Dawn of Eurasia (Allen Lane). He is a senior adviser at Flint Global in London and a non-resident senior fellow at the Hudson Institute in Washington. | • Bruno Macaes is the author of The Dawn of Eurasia (Allen Lane). He is a senior adviser at Flint Global in London and a non-resident senior fellow at the Hudson Institute in Washington. |
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