The United Kingdom will shortly leave the European Union. Speaking recently in the House of Commons, Prime Minister Theresa May assured the British public that ‘Brexit means Brexit’, and that her government would soon trigger off the legal and constitutional process for the exit of the UK from the EU to which it was admitted in 1970. When it does, it will need new markets outside the EU, its biggest trading partner. The search for these new markets has already begun The EU referendum that David Cameron, her predecessor in office, had called inexplicably to confirm Britain’s continued membership in the EU was a big gamble. He lost narrowly to the Brexiteers, that is those who wanted Britain out of the EU. The decision taken now to leave the EU cannot be reversed. Nor can the UK expect to be readmitted into the EU in future. After due process and painful negotiations with the EU, which may last up to two years, the UK will finally withdraw from the EU. The Prime Minister has called general elections on June 10, which her party, the Conservatives, is likely to win with an increased majority in the Commons. The Labour Party is in disarray and badly divided after losing two elections in a row. So, with a renewed mandate the Prime Minister will approach the EU negotiations with increased confidence that she has the whole country behind her.
Now, although the UK is leaving the EU, she is not leaving Europe entirely. Geographically, politically, economically and culturally, she is European and remains a major European power. Even after leaving the EU she will continue to exert some influence in European affairs. Ultimately, her fortunes are inextricably linked with political and economic developments in Europe. London will remain a major European financial centre. When she has considered her interests threatened in Europe she has intervened actively to protect those interests. Twice, in World 1 and 11, she went to war to restore a sense of political balance in Europe. Her traditional European policy has always been based on her perceived need to prevent the political and economic domination of the European continent by a single European power. Whenever it is necessary she has fought the two dominant European powers, France and Germany, to stop either of them from emerging as the dominant power in Europe. So, even though she is leaving the EU she will continue to protect her residual political and strategic interests in Europe. She will remain in other European political and defence institutions, such as NATO.
When Britain joined the EU (then EEC) in 1970, after two previous failed attempts, vetoed by France, the reason for seeking admission into the Union was more economic than political. The EU countries, particularly France and Germany, the most economically advanced, were doing much better than Britain which, until then, remained sceptical about the future economic prospects of the Union. But with the assistance of the US sponsored Marshall Plan, Europe had recovered faster than was thought possible from the ravages of the World War 11 that left it in economic ruins. The UK now felt that she would be better off joining the EEC which, until then, she had spurned. The EU offered the UK a larger guaranteed market for its manufactured exports. So, the main reason for British entry into the EEC was to avail itself the opportunity of being a member of a larger economic community and market.
There is no question that economically Britain was better off in the EU to which market British exports gained easier access. The British economy grew faster than it did outside the EU. But the economies of France and Germany grew even faster for historical reasons. Both countries have populations bigger than that of the UK, and they did not have to contend with the huge cost of Britain’s expensive, comprehensive and extensive social welfare benefits introduced by the British Labour Government after World War 11, from which new immigrants into the UK continue to benefit. It is becoming financially unsustainable. The UK wants to cut immigration by leaving the EU. The UK government has complained about many things in the EU. These include alleged loss of sovereignty, the over centralisation and huge power of the EU bureaucracy in Brussels, the huge British financial contributions to the cost of running this vast EU bureaucracy, Franco-German economic and political domination of the EU, and the mass migration to Britain of workers from the poorer East European members of the EU. It was this last consideration that was the decisive factor leading the British public to vote narrowly in favour of leaving the EU in last year’s EU referendum. The British public felt that these East European migrant workers were taking jobs from British workers. It conveniently ignored the fact that immigrants also create jobs in the UK. Some of the wealthiest business men in the UK today are Indians and immigrants from other European countries. Culturally too, there is a widespread public feeling that Britain is losing its national identity and culture because of mass immigration from the poorer European countries.
When Britain withdraws from the EU it will need to negotiate a trade agreement with the EU so that British exports will continue to have some access to the big EU market. The ‘divorce’ is going to be acrimonious and the negotiations between the EU and Britain tough and difficult. British exports will lose their free access to the EU market and can only enjoy minimum tariff concessions. But these are mature economies that need one another. They will find a way of reaching some accommodation over tariff arrangements that will not unduly impede British exports into the EU. Historically, Britain has always been a strong advocate of free trade among nations from which Imperial Britain benefitted a lot. It traditionally distrusts and dislikes trade blocs.
But now that it is leaving the EU, Britain has to look for new export markets outside the EU. Where are the new markets? Possibly, it will revert to the US, China, Japan and India. Already, it has begun the search for these new markets in those countries. It is also trying to explore new trade deals with Commonwealth countries, including Nigeria. When Britain entered the EU in 1970 it had to abandon the 1931 system of Imperial trade preferences which guaranteed Commonwealth countries, such as Nigeria, free access to the UK market.
Many of these new and small Commonwealth countries were made highly vulnerable by the loss of the UK market. They felt abandoned, betrayed and irritated by being suddenly cut off from the Commonwealth trade preferences. In effect, they had been left in the lurch and had hurriedly to make their own separate and special arrangements with the EEC. This is the origin of the ACP-EEC trade agreements negotiated by our Ambassador Olu Sanu on behalf of the African-Caribbean-Pacific countries with the EEC. But in effect, as Amb. Sanu observed in his recent memoirs, the ACP agreement with the EEC was not even necessary. Many of the ACP countries have found alternative markets to the EU which has not lived up to their expectations in terms of financial grants, loans and investments. For example, in the case of Nigeria, most of our oil export now goes to China and India. Both countries have long overtaken Britain as our biggest trading partners. Both surpass Britain in the range and value of their foreign direct investments in Nigeria. In the case of the older Commonwealth countries, they have forged new trade links with their neighbours. Canada is now the largest trading partner of the US. Australia and New Zealand now trade more with China than with Britain. It will be difficult now for all these Commonwealth countries to redirect their trade towards Britain.
British diplomatic and commercial representatives in Nigeria are going round right now with renewed vigour to explore opportunities for increased trade and British exports to Nigeria. They are legitimately lobbying the business community in Nigeria with dubious promises of increased UK direct investment in Nigeria. But this has been in decline for decades despite the fact that British businesses in Nigeria, such as Shell, Cadbury, Unilever and several others in the food and beverages sector, are doing highly profitable business in Nigeria already. They will continue to do so. Despite its current economic challenges, Nigeria remains a major attraction for foreign direct investments and a country of vast economic opportunities that is ready to do good business with any foreign country on a mutually beneficial basis. But the UK must understand that, this time, they will have to contend and compete with our new major trading partners, such as China and India, who are very smart in promoting their exports. The UK cannot, and should not, expect any preferential treatment, or favours, from Nigeria. What Nigeria seeks from its trading partners is not aid, but foreign direct investments that will create jobs here and mitigate the adverse terms of trade to which most developing economies have become victims. It is what is responsible for the ongoing and crippling economic recession in the poor countries.
