February 2017

By James Le Grice

This article is a contribution from our network partner firm Insight Consulting Group based in London.

Theresa May has put Britain’s special relationship with the U.S. at the heart of her Brexit strategy. On the surface this seems a wise move. Anglo-American relations have experienced a resurgence whilst EU-U.S. relations have soured following the inauguration of President Trump. Both the EU and the U.S. are in need of the Atlantic bridge that Britain has historically provided. However, with major changes to the European status quo and U.S. foreign policy on the horizon, May will need to demonstrate that Britain can be more than a middleman if its influence on both sides of the Atlantic is to survive.

While most European leaders were hesitant to embrace President Trump, Theresa May was swift to strike a positive relationship. This won her the prestige of being the first foreign leader to have a meeting with the new president, at which she secured a ‘100 per cent’ commitment to NATO and a commitment to begin pursuing a U.S.-UK free trade deal.

May is currently using these diplomatic victories to support her negotiating position for a post-Brexit free trade deal with the EU. The Prime Minister is under no illusion that it will be difficult to secure the arrangement she seeks; there have been calls from some in Europe to impose a punishing settlement on Britain to dissuade other member states from leaving.

By touting her successes to date with the Trump administration, Theresa May is effectively telling EU leaders to maintain good relations with Britain, as its influence with the U.S. is guaranteeing their collective security. This appears to be having some resonance. President Trump’s comments that NATO is ‘obsolete’, made just two weeks before Theresa May’s visit, caused panic amongst European leaders. European Council President Donald Tusk even went so far as to label the Trump administration, along with Russia, China and radical Islam, as one of the key challenges threatening the future of the EU.

At the EU summit in Malta on 3rd February, Donald Tusk admitted that a good relationship with the UK ‘will protect our unique relationship with the U.S., and the transatlantic guarantee for freedom and international order.’ He added that protecting relations with the U.S. is ‘still the highest political priority’.

However, Britain’s Atlantic bridge is a two-way street. While Europe has traditionally benefited from British influence with the U.S. for its security, the U.S. has benefitted from British influence within the EU to advance its economic and geopolitical interests. If the current dynamic is to be preserved, Theresa May will need to gain some concessions from the EU to prove to America that Britain is still capable of advancing its interests.

May is currently lobbying European leaders to increase their defence spending – a key ask of the Trump administration. This is a far more difficult concession to secure than a vocal U.S. commitment to NATO, but if May can demonstrate a result it will undeniably give her a stronger hand in negotiating a favourable future trade deal with the United States.

The problem is that it is not in the current interests of the EU leadership for Britain to have a favourable post Brexit free trade deal with the United States. The rationale is best summarised in Donald Tusk’s recent letter to European heads of government warning against the potential break-up of the union:

It must be made crystal clear that the disintegration of the European Union will not lead to the restoration of some mythical, full sovereignty of its member states, but to their real and factual dependence on the great superpowers: the United States, Russia and China. Only together can we be fully independent.

If the UK is able to have a free trade relationship with the U.S. without becoming dependent on America, it will severely undermine the grounds on which the European Council’s president is appealing for further European unity.

Fear of U.S. dependence post Brexit is certainly high amongst much of the British public. Theresa May’s embracing of Donald Trump has been met with scepticism from both the left and the right, and following President Trump’s controversial travel ban, May faced backlash for her hesitancy to criticise the President.

Tens of thousands took to the streets of London and other UK cities to protest the travel ban and Theresa May’s silence, and nearly two million people have signed an e-petition to prevent Donald Trump from making a state visit to the UK in the autumn. One Member of Parliament even dubbed the Prime Minister ‘Theresa the Appeaser’.

While the reaction to the travel ban itself is unlikely to have a long-term impact, the wider debate it has reawakened about Britain’s ability to challenge U.S. policies than run counter to its interests is significant. The fate of Tony Blair, whose alliance with an unpopular U.S. president was his undoing, remains closely remembered in British politics.

The ramifications of a dependent relationship with the U.S. would extend beyond Britain’s borders. Many in the UK’s defence establishment, who view Russian expansionism in Eastern Europe as a key threat, are concerned about what a potential détente between the U.S. and Russia will mean for Britain. Over the past few years, the UK has similarly grown silent on Chinese interference in Hong Kong’s democracy to further better trade with Beijing.

Theresa May therefore needs to look beyond Britain’s traditional role as transatlantic mediator to secure the best post Brexit outcomes for Britain and the countries that rely on it. This will mean deepening trade ties beyond Europe and the U.S., a job that the newly created Department for International Trade has been tasked with. If successful, Britain will be able to sell itself to the U.S. and EU not only as a transatlantic bridge, but also as a bridge to the Gulf Cooperation Council and to the Commonwealth – key targets of the Prime Minister’s trade offensive. This will give it considerably more clout in negotiating with Europe and the United States.

Additionally, Theresa May will need to redefine how Britain wields influence in Europe, recognising that the current European status quo is unlikely to last. Euroscepticism, partly inspired by Brexit, is on the rise and making heavy marks on the polls in upcoming European elections. At the time of writing, Geert Wilders’ far right Freedom Party has favourable odds to win in the Dutch election next month. Exiting the EU is a key priority for his party.

More significant though is the upcoming French election, in which National Front leader Marine Le Pen has entered the race and is campaigning for a Frexit. Le Pen currently has strong chance of becoming France’s next president. Likewise, Italy may hold an early general election this year, and the Eurosceptic Five Star Movement is expected to make major gains.

Regardless of whether these fringe parties win their respective elections, the future leaders of their countries will not be able to ignore the rising Euroscepticism of their electorate. Brexit may have shaken the EU, but if France and Italy – founding members of the European Economic Community – seek to leave, then the EU will truly be in crisis.

This is where Britain has its strongest advantage for influence. Brexit was not a victory of anti-establishment fringe parties, but rather mainstream Conservative Party politicians who championed it as their own cause. Even the opposition Labour Party is now embracing Brexit. In setting out her Brexit strategy, Theresa May took ownership of the Brexit narrative, moving it away from rhetoric on immigration towards international trade and pledging a commitment to the EU’s future success alongside an independent Britain.

Theresa May can leverage this position to act as both a moderating influence on the Eurosceptic fringe parties of Europe, who are claiming Britain as their inspiration, and the EU’s leadership, whose response so far has been to push for ‘more Europe’. Britain has the potential to be a force for meaningful reform of the EU’s structures to better serve the populations of Europe, whilst preserving the stability and security provided by the alliance of European nations. If it can wield this influence effectively, Britain could find itself in the driving seat of a reformed Europe - infinitely strengthening its position as both an Atlantic bridge and a bridge to the wider world.