Our So-Called Foreign Policy: First Thoughts on the Post-Brexit World

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2016 election, Brexit, Catalonia, David Cameron, Donald Trump, EU, European Union, Eurozone, Federal Reserve, France, globalization, Greece, Hillary Clinton, Im-Politic, Immigration, interest rates, Janet Yellen, NATO, North Atlantic treaty Organization, Obama, Scotland, Spain, terrorism, The Netherlands, TPP, Trade, Trans-Atlantic Trade and Investment Partnership, Trans-Pacific Partnership, TTIP, United Kingdom

I sure as heck was surprised by the United Kingdom’s decision yesterday to leave the European Union (EU). Were you? And now that “Brexit” will indeed take place, what’s in store for America and the world? My crystal ball has never worked perfectly, and much of Brexit’s ultimate impact will depend on how London executes the move, and how the EU and financial markets respond. America’s reactions of course will matter as well. Here are some initial reactions. 

>The unexpected Brexit verdict significantly changes the narratives about the global economy’s evolution, about the future of international trade and related economic policies, and about the fate of international political integration.

As recently as 48 hours ago, the safest bet was that British voters would behave similarly to voters elsewhere in Europe who have had the chance to change fundamental political arrangements. In September, 2014, the Scots voted to remain a part of the United Kingdom. Although Greek anti-EU sentiment runs high for reasons that are easily understandable given that country’s prolonged economic crisis, a much-feared (by those who were not hoping for it) “Grexit” vote never took place. Catalonia is still part of Spain, despite a strong separatist movement in the region – and a terrible Spanish economy. And in 2005, the French and Dutch electorates voted down a proposed new EU constitution that would have accelerated political and economic integration – chiefly by streamlining decision-making via greater powers for pan-European institutions. But the issue of departing the Union has not yet come up.

As with Scottish devolution in particular, I thought that instincts for caution would steadily overcome nationalist or ethnic (take your pick) feelings as election day approached, and that the British would ultimately reject a leap in the dark. And of course, my confidence was reinforced by my view that the UK is hardly an economic superpower, and that its prospects outside the EU objectively are iffy.

The British public’s refusal to back down – despite an unmistakable fear-mongering campaign by (now caretaker Prime Minister) David Cameron’s government and even the country’s central bank – signals that Europeans at least may be willing to shift integration into reverse, not simply keep it in place

>In that vein, one of the biggest worries of Brexit opponents entailed the possibilities of contagion – a “Leave” verdict encouraging similar EU opponents throughout the Union. And copycat Brexit votes are clearly back on the table, given widely acknowledged structural defects in the eurozone (a common currency area that includes 19 of the 28 – counting the UK – EU members, and that Britain never joined), Europe’s especially weak recent economic performance, and controversial EU decisions to admit large numbers of Middle East refugees.

Their success would be a genuinely historic, and indeed seismic, development, as Europeans themselves since the end of World War II have generally acknowledged that closer, more regularized economic ties were essential for breaking their centuries-old cycle of major conflict. It’s possible concerns about keeping Europe peaceful are overblown. For all the importance of economic integration, the main pacifier of the continent has been the American commitment to European defense embodied in the North Atlantic Treaty Organization (NATO). Brexit per se does nothing to change the UK’s role in the alliance.

Nevertheless, economic and security issues are never, or even often, completely separate. Therefore, particularly over the longer term, Brexit and other withdrawals from the EU could well turn Europe into a much less stable place than it’s been for the last 70 years. More uncertainty could be added to the European security scene if presumptive Republican presidential nominee Donald Trump, an outspoken critic of America’s NATO policy, won the presidency.

I’ve strongly critical of continued U.S. NATO membership, too – especially of what looks to me like a possibly suicidal nuclear security guarantee. Indeed, the risks created for America by its continued NATO role convinces me that fundamental changes in the alliance’s structure are inevitable anyway, since the U.S. promise to risk its existence on Europe’s behalf has become ever less credible. If Brexit brings the EU’s dissolution, or significant weakening, closer, then Washington will face fateful NATO choices it has long tried to avoid sooner rather than later. And the foreign policy establishment’s demonization of all proposals for proactively dealing with these dilemmas has left the nation completely unprepared for their growth to critical mass.

>Economically, Brexit carries disruptive potential, too. Just look at the financial and currency markets today. But epochal political events inevitably create short-term costs; any other expectations are completely unrealistic. Especially inane have been claims on social media (e.g., by The New Yorker‘s Philip Gourevitch) over the last twelve hours that the initial turbulence touched off by Brexit proves it a failure.

Sure to be complicated greatly, however, are efforts to conclude a major trade agreement between the United States and the EU. This Trans-Atlantic Trade and Investment Partnership (TTIP) has been a long slog anyway. But since such negotiations always entail achieving a delicate balance of interests, and since the UK is a significant part of the overall EU economy, any important compromises that have been struck in the talks would seem to be threatened.  

President Obama has already concluded with eleven other countries a Pacific rim-centered trade agreement called the Trans-Pacific Partnership (TPP), but it’s doubtful that Brexit will do much to dispel Congressional skepticism that has prevented Mr. Obama from formally submitting it for approval.

Keep in mind, though, that trade – including with Europe – is still a pretty minor part of the U.S. economy. The channel through which the biggest Brexit impact is likeliest to be transmitted to America is monetary policy – the province of the Federal Reserve. At the Fed’s June 15 meeting, Chair Janet Yellen made clear that the possibility of Brexit, and especially its impact on financial markets, was one factor behind the central bank’s decision to keep interest rates on hold. Until business-as-usual in the world economy resumes, don’t expect any rate hikes – good news if you believe that the U.S. desperately needs super-easy credit to sustain its current feeble recovery, and bad if you believe that prolonged near-zero rates have prevented the post-financial crisis adjustments needed to restore real health to the economy.

>In fact, such existing skepticism around these trade issues, as well as around immigration policy, makes me doubt that Brexit will have a notable effect on American politics and policy. Sure, the same kinds of economic anxieties that have fueled Trump’s campaign helped lead to victory for “Leave.” But his followers won’t be able to cast more votes for him as a result of the British decision.

Supporters of his presumptive rival, Democrat Hillary Clinton, are surely horrified by the resistance to unlimited immigration and massive refugee admissions signaled by Brexit, so they wouldn’t seem headed for the Trump camp. And it’s difficult to imagine many independent voters marking their ballots in November based on the British vote. Indeed, this poll tells us that Brexit isn’t even on the screens of most U.S. voters. Rightly or wrongly, that choice will be overwhelmingly Made in America.

One possible exception – but one that’s largely independent of Brexit: A wave of overseas terror attacks could easily heighten American anxieties about their own security, whether an Orlando or San Bernardino repeat occurs or not. Ditto for some major military success by ISIS or a similar group abroad, or an unrelated international crisis. More terrorism-related developments could favor Trump. Something like a showdown with Russia over Eastern Europe or China over the South or East China Seas could break in Clinton’s direction (due to judgment and experience considerations). In the process, these contingencies could also remind us how quickly Americans might forget all about Brexit.

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Our So-Called Foreign Policy: What Obama Gets Right and Wrong About America’s Allies

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alliances, allies, Asia, Bret Stephens, burden sharing, Cato Institute, David Cameron, David Ignatius, deterrence, Eli Lake, Europe, foreign policy establishment, France, free-riding, geography, Japan, Jeffrey Goldberg, Korea, LIbya, Middle East, Nikolas Sarkozy, Obama, Our So-Called Foreign Policy, Saudi Arabia, self-sufficiency, The Atlantic, United Kingdom, Wall Street Journal, Washington Post

As I said over the weekend, that Atlantic article on President Obama’s foreign policy based on a series of lengthy interviews is an unusually rich vein of material. So let’s keep mining! Since its most newsworthy aspects so far have been judged to be Mr. Obama’s views on America’s allies, let’s focus on them.

The quick and dirty: The bipartisan foreign policy establishment (including its journalistic wing) is just aghast that the president has derided many of the nation’s main treaty and less formal allies – including the United Kingdom – as “free riders.” And on this matter, Obama could not be more on target. At the same time, just as with his pessimism on the Middle East, he hasn’t even begun to follow up policy-wise in ways that are not only logical, but vital for avoiding major future troubles.

As the article by Jeffrey Goldberg reminds, the president has dressed down London for skimping on defense spending while the United States has borne an outsized share of the Western security burden. The British responded by – minimally – meeting a spending goal long endorsed by Washington, but Mr. Obama still complained bitterly about the history of many allies’ “holding our coats while we did all the fighting.’”

Indeed, he largely blamed his failed intervention in Libya on “Europe and a number of Gulf countries who despise Qaddafi, or are concerned on a humanitarian basis, who are calling for action. But what has been a habit over the last several decades in these circumstances is people pushing us to act but then showing an unwillingness to put any skin in the game.” And he fingered both current British Prime Minister David Cameron and his then French counterpart, Nikolas Sarkozy, by name.

Also harshly criticized by the president: Saudi Arabia and other arch-conservative Persian Gulf monarchies, which he has accused of “intensifying” (Goldberg’s language) the outburst of “Muslim fury” seen in recent years by “heavily” funding the spread of Islamic fundamentalism.

Wall Street Journal columnist Bret Stephens spoke for many in the nation’s professional foreign policy community when he wrote that Mr. Obama’s remarks to Goldberg “are so gratuitously damaging to long-standing U.S. alliances, international security and Mr. Obama’s reputation as a serious steward of the American interest that the words could not possibly have sprung from the lips of the president himself.”

But as shown by this essay by the Washington Post‘s David Ignatius, criticism has hardly been confined to neoconservatives. Indeed, Bloomberg View columnist Eli Lake delivered probably the ultimate slap at this facet of the “Obama Doctrine” – at least in the eyes of the nation’s chattering classes. He called it Trump-like.

The president certainly can be faulted for indiscretion while still serving in office. As Ignatius notes, candor can indeed be destabilizing. But such judgment questions aside what’s most important to know is that the president is unquestionably right on the merits. Unless you doubt that the Gulf Arab monarchies are funding the spread of one of Islam’s harshest, most medieval strains? Or believe that America’s allies in Europe and Japan have ever shouldered a remotely appropriate share of the load for what is after all their own defense?

As documented in this 2000 journal article of mine, since early in the Cold War, American administrations have struggled to convince or pressure leaders in London, Paris, Bonn (and then Berlin), and Tokyo alike to increase their military budgets both in absolute terms and as a percentage of overall alliance defense spending. All of these efforts have failed, even though Washington consistently used the most indulgent, and least sensible, criterion for success imaginable – raising allied spending to equal U.S. efforts.

If national security policy was a game, such an outcome would of course be “fair.” But when it comes to promoting and defending American interests, this approach has created a false equivalence in stakes, and led the United States to expend greater-than-necessary amounts on the military, and face greater-than-necessary risks. For however important America’s interests in securing Europe or Japan and the rest of East Asia from Soviet, Russian, and Chinese threats, the allies’ interests in defending themselves are infinitely more important – and indeed, vital.

But U.S. burden-sharing efforts also failed for the same reason that has frustrated President Obama’s own ambitions: a stubborn unwillingness to recognize the inescapable dynamics of free-riding. For just like his Cold War and post-Cold War predecessors, Mr. Obama has continually sabotaged his burden-sharing strategies by endlessly declaring not only that allies and their regions are vital American security interests, but that their security and America’s are indivisible. So naturally, allies for decades have concluded that they have no need for much military exertion given Washington’s conviction that their downfall would be completely unacceptable. Ditto for coalition warfare in third countries, like Libya. Whether for moral or strategic reasons, the Obama administration never indicated that it could take the situation or leave it. So countries like the United Kingdom and France understandably – and entirely predictably – chose to take the easy way out.

The bad news – not for the nation as a whole, but for the often grandiose ambitions of its leaders – is that without reliable allies, many of their foreign policy objectives do, as they fear, become impossible to achieve. So just to pick through President Obama’s remarks to Goldberg, say goodbye (at least often) to “establishing norms that benefit everyone, and even to “doing good at a bearable cost,” to “promoting values, like democracy and human rights,” to “making the world a better place,” to “bending the world toward justice,” and especially to “leading the world.”

The good news – not for America’s professional foreign policy community, nearly the whole of which believes deeply in the urgency of these goals, but for the nation as a whole – is that neither U.S. security nor prosperity requires achieving any of them. As I’ve explained repeatedly, America is geopolitically secure enough and economically self sufficient enough to achieve adequate levels of security and prosperity even in a badly failing world.

Better yet, both this security and prosperity can be further enhanced without more overseas engagement.  And even if strengthening the U.S. capacity for self-reliance in all dimensions wasn’t eminently feasible, assigning it a much higher priority would be essential precisely because America’s allies have proven themselves so utterly feckless for so many decades.

Moreover, there’s an even more compelling argument for disengaging from America’s current security commitments and pursuing a more independent course than recognizing their major limits as multipliers for American power. In this increasingly dangerous, unstable world, these ties are entirely too likely to embroil the United States in conflicts it’s better off avoiding. As analysts at the Cato Institute in particular have warned, when their deterrence power fails, they tend to become “transmission belts of war.”

And these belts remain in place throughout the world – albeit on scales smaller than during the Cold War. On the one hand, it’s true that international tensions in places like Europe and much of Asia are considerably lower than between 1945 and 1990 (with the Korean peninsula a notable exception). On the other hand, the threat to the United States from an ideologically hostile superpower with global ambitions is greatly reduced as well.

Fortunately for President Obama and the nation, the United States hasn’t yet been trapped into defending alliances and regions that, however important, don’t justify exposing the American homeland to the risk of major war. But because for all his frustrations with the allies, he hasn’t thought through the consequences of clinging to these outmoded arrangements, his successor is less likely to be so lucky.