Brexit through an Asian Lens

Stephan Haggard
The author is the Krause Distinguished Professor at the Graduate School of Global Policy and Strategy at the University of California in San Diego. He is the author with Marcus Noland of the Witness to Transformation blog at https://piie.com/blogs/north-korea-witness-transformation.

The prolonged drama of Britain’s exit from the European Union (EU) may seem distant from Seoul. But there are revealing lessons about the pros and cons of European and Asian approaches to political and economic integration.

From the start, the EU was a political and even strategic project. The core bargains were struck between former enemies in the last great war of the 20th century, most notably Britain and France on one side and Germany on the other. Economic integration was not simply an end; it was the means to greater comity and a lasting peace.

As the Cold War came to a dramatic close in 1990, the EU again played a crucial role in unifying the continent, this time through its gradual expansion to the east.

Over time, the political and economic ambitions of the EU have only grown, and the region now looks as much like a country in the making as it does an international institution. The EU has its own parliament — elected directly by its citizens — a Court of Justice and, for most members, a common currency and independent central bank.

Moreover, the region has a powerful executive in the form of the European Commission. The commission has assumed a larger and larger regulatory role in the lives of Europeans, from complex areas such as financial regulation to food safety and the environment.

The “four freedoms” that are the bedrock of the agreement include not only the free movement of goods, services and capital, but also — most controversially — of people. Holders of an EU passport can travel and live anywhere in the union they choose.

In short, the EU is much more than just a customs union; it is an ambitious — indeed wildly ambitious — political project.

Yet it was precisely that ambition that has deeply divided the British public. When Prime Minister David Cameron decided to put the question of membership to a direct referendum, he gambled that a vote to stay would resolve simmering divisions over the issue within his own party. An earlier referendum on the question in 1975 had decisively resolved the question for several political generations.

After the narrow (51.9 to 48.1) vote to leave in 2016, it quickly became clear that advocates of Brexit had no clear plan for how it would be done. The subsequent drama has centered Prime Minister Theresa May’s efforts to find a compromise between two positions that are fundamentally incompatible: how to leave the EU while not foregoing all its benefits. The 585-page Brexit agreement that May negotiated with its European partners was guaranteed to generate more opposition than support: not a clean enough break for the Brexit crowd, but an even more unacceptable outcome for those in London, Scotland and elsewhere who voted to stay.

The growing economic integration of Asia occurred in a much less institutionalized way. The Cold War and diametrically opposed political systems blocked the formation of any overarching institutions among the countries of northeast Asia. The newly-independent countries of Southeast Asia had little interest in submitting themselves to a strong international institution. The Association of Southeast Asian Nations (Asean), formed in 1967, has played an outsized role in regional cooperation, but remains a lowest-common denominator body.

Yet the absence of strong international institutions has not stopped a steady, indeed relentless process of market-driven integration in the region. Korea was among the pioneers of this process, pursuing an export-oriented growth strategy from the 1960s onwards and gradually opening to more foreign investment as well. Korea has been at the forefront of negotiating free trade agreements, not only in the region, but well beyond it.

Yet that process never surrendered sovereignty to the same extent and drew a line at the free movement of people, the issue that ultimately catalyzed British support for Brexit. Thus, while East Asian institutions may be “thinner” than those in Europe, they are — as a result — less controversial. Korea has avoided the crippling polarization visible in a number of other advanced industrial states, at least on these institutional and economic issues.

A fundamentally different institutional landscape in Northeast Asia would require changes that are difficult to imagine, starting with a more democratic China and North Korea.

Yet we can imagine political support for deeper integration through more incremental processes, such as the China-Japan-Korea summit.