Media Global Economy 2019.08.08
Boris Johnson has taken office as the UK Prime Minister. He is a popular politician, but at the same time, he seems to attract trouble including his private life.
I suspect Johnson has great similarities to US President Donald Trump. Michael Cohen, who was Trump's personal attorney and a right-hand man, sharply criticized Trump in his testimony before the US Congress calling him a racist, a con man and a cheat. These words could perfectly apply to Boris Johnson.
Nevertheless, Johnson is as popular as Trump because he is a populist who strives to appeal to a specific audience.
Johnson and Trump are very much alike. They are never hesitant about misrepresenting facts in their writing and speech to pique public interest. As for fake news, Boris Johnson is more experienced than Trump.
In the first half of 1990s when Boris Johnson was appointed Brussels correspondent for The Daily Telegraph (politically conservative UK newspaper), where the EU has its headquarters, he often sent fake news to London slandering the EU.
At that time, those responsible for relations with the media in the EU totally disregarded Johnson's reports, which were absolutely ridiculous, considering that they were thoroughly intended to amuse subscribers. However, ordinary people who had no means to discern the truth or falsehood of reports simply believed them.
This caused the rise of Euroscepticism among UK conservatives, becoming a trigger for Brexit later.
Johnson claimed in his reports that European Commission President Jacques Delors plotted to dominate Europe by granting more power to the European Commission and the European Communities (EC). This allegedly led to Denmark's rejection in the referendum to ratify the Maastricht Treaty, which aimed to deepen European integration, evolving the EC into the EU.
There is one difference between Johnson and Trump, I think. Trump is consistent in his basic principles and arguments about migrants, trade issues, etc. notwithstanding his reputation for being impulsive and unpredictable. Meanwhile, Boris Johnson seems to revamp even his basic arguments as circumstances change. Some criticize that Johnson adopts a Boris first policy, not a UK first policy.
During a news report by the Japan Broadcasting Corporation (NHK) on July 23, a British expert discussed that although Boris Johnson pledged Brexit on October 31, he would propose a Brexit extension as the deadline approaches. This commentary accurately described his populistic character.
What will happen with Brexit under Prime Minister Boris Johnson?
To begin from the conclusion, a no-deal Brexit is now more likely, or more to the point, there are hardly any other options available.
The UK has been lost in a Brexit maze. This is because it wishes to address two incompatible issues concurrently: one is to impose strict border controls after its withdrawal from the EU, and the other is to evade the introduction of border controls to prevent the Northern Ireland conflict from re-erupting.
Former Prime Minister May and the EU placed a priority on preventing the Northern Ireland conflict from re-erupting in the draft withdrawal agreement at the expense of a full Brexit. They agreed that the UK would remain in the EU's Customs Union and single market. For this reason, Brexiteers in the governing Conservative Party responded to it furiously. Let me explain this again.
You may think that no border control will be required if the UK and the EU conclude a bilateral free trade agreement (FTA) to remove tariffs after the UK leaves the EU. But it is not the case.
The EU protects industries in its territory by imposing tariffs on commodities originating from non-member states. If the UK concludes an FTA with the US, imposing no tariff on wheat produced in the US, the UK will be able to reexport US wheat to EU member states without tariffs because of the FTA between the UK and the EU.
Subsequently, wheat farmers in the EU will not be protected by tariffs. To prevent such import, the EU requires the UK to prove that the wheat originates from itself if the UK exports it to the EU without paying tariffs. This is known as "proof of origin." The EU will be required to check at borders if products originate from the UK.
In brief, border controls must be imposed even after the UK and the EU conclude an FTA to remove tariffs.
This is an issue caused by differences between tariffs that the UK levies on products imported from foreign countries and that the EU levies on products imported from non-member states. If the UK and the EU were in the same customs union in which the UK imposes the same tariffs as the EU on products imported from non-EU countries, such as the US, this issue would be resolved. This is what is happening now under the framework of the customs union.
However, in this case, the EU would maintain the authority to set tariffs while the UK would be given no authority to do so. The UK would fail to achieve its original intention to recover sovereign rights to decide on tariffs through a Brexit. In addition, the UK would not be able to conclude an FTA aimed at reducing tariffs with non-EU member states including the US and Japan. These are the reasons why Brexiteers are infuriated.
On top of that, there is an issue concerning the EU's single market in which member states are required to adopt the same standards and regulations.
After the UK's withdrawal from the EU, the Republic of Ireland, an EU member, needs to check at borders if commodities coming from the UK are compatible with EU standards and regulations. To avoid the introduction of such border controls, the UK will need to adopt regulations similar to those of the EU.
However, after its departure, the UK will not be an EU member anymore. While having no representation in its decision making on regulations unlike the past, the UK would remain bound by regulations of the EU. This has also outraged Brexiteers, who protested that the UK's attempt to recover its sovereign rights through a Brexit is bound to paradoxically limit such rights further. (See "For those who want to understand Brexit" for further details)
To satisfy Brexiteers, the UK needs to leave both the EU's Customs Union and single market. If so, strict border controls must be imposed. However, their introduction may re-erupt the Northern Ireland conflict. It is a problem that has no solution.
Former Prime Minister May and others asserted that technological solutions would be considered in developing any alternative arrangement for ensuring the absence of a hard border with regard to the movement of goods and people. However, the EU flatly refused it, claiming that no such technology has ever been in use across the world, although it could be delivered in future. The imposition of border controls is a matter which concerns both the UK and the EU. Hence, any proposals should be accepted by both.
In fact, Boris Johnson wishes the EU to accept this proposal of May's as the only viable option which he can pursue to avoid a no-deal Brexit.
He insists that the EU will make a concession to the UK in fear of a no-deal Brexit as October 31 approaches. However, this brinkmanship has no factual grounding. The EU flatly rejected the renegotiation of the withdrawal agreement which it agreed with Mrs. May.
On the contrary, the EU may not accept even the re-extension of the Brexit deadline. Ursula von der Leyen, the President-elect of the European Commission, hints at a possible re-extension.
However, the nomination process for the EU's top leadership positions this time clearly showed that French President Emmanuel Macron, who has been tough on the UK, has become increasingly influential, contrasting with the waning influence of German Chancellor Angela Merkel, who has been sympathetic to the UK.
As discussed in the "What will happen with the Brexit delay?," it was Macron who opposed the previous extension most. Macron made Donald Tusk, Permanent President of the European Council, shorten the extension by half to make it until October 31, not one year as Tusk initially proposed. It is unlikely that he will accept any further extension.
In this regard, the outcome will likely depend on Macron's as well as Boris Johnson's relationship with US President Trump.
Trump was extremely tough on Mrs. May, who searched for a way to cooperate with the EU. Meanwhile, he displays a friendly attitude to Boris Johnson, a Brexit hardliner, calling him "Britain's Trump."
On the other hand, Trump has dealt with the EU, which has a trade surplus with the US, in a way which no country treats its allies. He doesn't get along with Macron, who is calling for greater European integration. In addition, the EU and the US are now stuck in a tit for tat situation over competition between Airbus with its HQ in France and Boeing in the US.
Trump, who dislikes the EU, will likely demand that the UK should leave the EU and conclude an FTA with the US. Meanwhile, Macron, who wishes to promote EU solidarity, also hopes to solve Brexit quickly. He has the view that if the UK wants to leave, it should leave now. Boris Johnson himself is a Brexit hardliner. In short, all of them are destined for a quick Brexit.
Further, as a reporter of the British Broadcasting Corporation (BBC) indicated in the news coverage by BBC on 24 July and researchers of the Center for Strategic and International Studies (CSIS), a famous US-based think-tank, agreed, Boris Johnson will not be able to resist Trump's demands because of their close relationship.
No matter how strong UK Parliament opposes a no-deal Brexit, it is divided into a variety of groups ranging from pro-Remain members to Brexiteers. It will be impossible for the UK to proceed with a "Brexit with a deal" which will convince a majority of MPs.
This is apparent given that the UK Parliament rejected Mrs. May's draft Withdrawal Agreement three times, and none of the Brexit options proposed by Parliament after its internal discussions earned a majority to test Parliamentary support. Even if the UK government concluded another withdrawal agreement after renegotiating with the EU, a majority of MPs would reject it. On the other hand, even if the UK Parliament agreed to a further extension of the Brexit deadline, it is not Parliament but the Johnson administration that have the authority to propose it to the EU.
Some suggest that Boris Johnson will dissolve Parliament to hold a general election. However, unlike Japan, the UK law does not allow a Prime Minister to dissolve Parliament to hold a general election at his/her discretion. In the first place, unless UK Parliament agrees to the Withdrawal Agreement to which the EU and Former Prime Minister May agreed, the UK will automatically leave the EU without a deal on October 31.
This is what Boris Johnson desires. He promises that a no-deal Brexit will cause no problem as long as preparations are made. After many twists and turns, the UK has no choice but a no-deal Brexit at the end of the day.