There are some things you form impressions about early on in life that you never have reason to question simply because you really don’t need to. Speaking for myself what I learned about Europe back in the day left me with the impression of a stable continent that, with its longstanding history and cultural traditions, is to a great degree reflected in America. Right here in New Braunfels, for example, you can’t turn around without knocking over some piece of history left behind by the German immigrants who founded the city. There are also a lot of Czech settlements in Texas and most of our bigger cities have a neighborhood known as “Little Italy.” The list goes on.
But a more detailed look at Europe’s history since the time the United States was created belies this impression. Modern Italy — with the borders that it has today — didn’t exist until the 19th Century. Ditto for Germany. Napoleon Bonaparte had a hand in creating both of those countries along with Poland — which has changed hands a few times as well. And does anybody remember the Ottoman Empire? There’s a whole bunch of new countries in Southeast Europe where at used to be. In one sense the United States has lasted longer and shown more stability than any of our European counterparts.
A more accurate analogy of how Europe traditionally worked would be a half-dozen or so cats sitting in your living room doing whatever it is that cats do. And they will sit there peacefully doing just that until you put them all in a burlap sack together. Now watch what happens — that’s a more accurate picture of Europe.
Several initiatives have been employed to promote peace in Europe. You are probably familiar with NATO — a military alliance tasked to protect Western Europe from Soviet aggression. More recently we have the idea of the European Union — an economic alliance designed to facilitate that one great deterrent to armed conflict — free trade.
It’s not easy to describe the whole shebang with a limited amount of space but for our purposes today suffice to say that England joined the union but retained its own currency — the pound — while recognizing the euro that was used elsewhere. However for a variety of reasons, mainly having to do with the nuances of certain trade restrictions and the perceived loss of autonomy in the marketplace, the average Brit began over time to chafe at the idea of being beholden to a central set of trade rules originating in Brussels. As you are aware, a populist revolt of sorts occurred and in 2016 England voted to leave the European Union.
Unfortunately, voting for something without researching all the facts — or just plain ignoring them — usually leaves you with a real mess on your hands. This is a lesson that a lot of us here in America learned in 2016 as well. But with regards to England not many of us are aware of England’s role in our trade with Europe. The facts are that a lot of those transactions are channeled through the UK.
If the UK’s trading relationships with the rest of Europe are negatively impacted as a result of failure to successfully withdraw from the European Union then our own trading relationships with Europe will be likewise affected. The issue of Brexit will also have ramifications for Scotland’s independence (another referendum on this has been threatened in the event of Brexit) and the British presence in Ireland (Northern Ireland is British territory but the rest of the place is an independent country).
With each week we get a new indicator here at home of a looming global recession and a hard Brexit may just be the straw that breaks the camel’s back. And while we can take steps to insulate ourselves from the full force of a European financial meltdown the effects will still be felt here.
At the same time, while Donald Trump is renegotiating trade agreements with our own partners, it may be wise to slow down and take a look at that process as well. The “NAFTA Replacement” deals have not been approved by the Senate but some shortcomings to those agreements are starting to come to light. Add to that a trade war with China and we might be wise to look for similarities between the British situation and our own exposure to an economic slowdown.