Trump and Brexit: Existential crisis torments great democracies

Mismanagement of globalisation and immigration have theatened democracy. Our leaders now face the ultimate political challenge.

Boris Johnson leaves his residence in London this week. Picture: Getty Images

The West lives through an era where democracy is under serious threat from within given the two great democracies — Britain and the US — are sunk in existential trauma over separation from Europe and the Trump phenomenon respectively.

It is folly to think Australia is immune from the democratic malaise. Our problems and our symptoms are different, yet serious. But our mood of dispirited indifference is far distant from the existential crisis that torments the two nations Australia used as models when writing its constitution in the 1890s.

The two specific triggers for the British and US traumas are mismanagement of globalisation and immigration, areas where Australia has largely avoided the same mistakes. From the 1980s onwards Australia’s embrace of economic liberalism was tied to social-democratic distribution of the benefits. Our immigration policy has been tied to strong border protection and government control of entry in the national economic interest. Our results are not ideal — but far distant from the virulent political revolts that triggered Brexit and drove US President Donald Trump’s election.

The experiences of the Britain and US reveal two overarching messages — once your politics is derailed then your country can lose its direction and even its sense of destiny; and the deeper lesson is that the fusion of economic and cultural dislocation is the indispensable grassroots force that feeds into and then drives political derailment.

While Brexit and the Trumpian eruption are different events they mirror a common failure — the inability of the ruling elites in Britain and America in politics, finance and business to service the economic needs of the entire community, respond to legitimate public grievance and honour traditional as well as progressive cultural values.

The political revolutions in Britain and US will shift the anchor of these nations with unpredictable consequences.

Britain has now set sail on its voyage to redefine its ties with Europe and the world. The journey under the fragile leadership of Prime Minister Theresa May is cyclone-heavy. The popular referendum for Brexit, carried 52-48, will almost certainly be honoured.

It is an astonishing event — popular sentiment for Brexit being imposed upon the parliament, where there was an initial majority in favour of remaining with the EU. The people instructed the parliament — but the parliament cannot agree on the method of Brexit.

The crisis of May’s government lies in implementing a policy in which it does not believe. It acts from necessity, not conviction. The British establishment was pro-EU because it feared the economic price of departure. That price is high but a narrow public majority wanted to reclaim sovereignty from the EU, with everything that means.

Britain’s historical life has been different to Europe’s — there is a Euro-scepticism in its heart, not necessarily a commitment to Brexit but that’s how it played out.

May’s compromise plan that emerged in a battered condition through the parliament last week is a soft Brexit. It keeps Britain in regulatory alignment with the EU in goods trade; it accepts the EU rule book; it means Britain lives by those rules but cannot help shape them any more.

Nobody is satisfied with May’s plan but there is no other plan. The problem defies a satisfactory solution and the Conservative Party is tearing itself apart, split three ways among the Leaver, Remain and compromise factions.

May is weak yet stubborn. She awaits removal yet there is no viable alternative and the Tory party is littered with poseurs short of courage. Boris Johnson, addicted to gesture and having quit as a minister at May’s soft Brexit, offered the hollow refrain: “It is not too late to save Brexit”, while singularly unable to offer any solution himself. Johnson lusts for the PM’s job but is palpably unfit — having led the Brexit referendum success, he has failed in his prime responsibility: to outline how an independent Britain outside the EU will succeed.

What Britain really needs is either a government fully pledged to the closest alignment with the EU (the de facto Remain stance that business and industry want) or a government ready to take a purist Brexit plunge, accept a sharp separation from the EU, live with the economic challenge and offer a new vision of a free-trade Britain ready to survive by embarking on the necessary pro-market reforms at home. Neither position is politically tenable; neither so far can summon a majority.

Conservative MPs cannot agree on the future plan for their country, an astonishing sight. The party has been divided over the EU for decades and the division is unresolved. The ageing party rank and file are pro-Brexit while the City of London lives with the drumbeat of corporates threatening to cut their investments unless the EU alignment is delivered.

There is the dire possibility Britain will crash out of the EU without any formal deal, risking administrative bedlam. There is talk of a second referendum to enable the Remain cause to win but it is extremely unlikely, with no guarantee it would win anyway — slight problem. And there is still no sign the EU will offer Britain any special favours in its exit arrangements despite the absence of any domino effect from more countries lining up to quit the union.

Britain is divided and ambivalent. May survived last week’s narrow votes in parliament but the accusation the Brexit lobby mounts against her is lethal — that May is betraying the people’s vote and the party’s sentiment by avoiding a genuine Brexit.

The counterclaim against the Brexit lobby, however, is different but also lethal — that it cannot show how Britain can regain control of its borders, escape EU jurisdiction, remove itself from any customs arrangement while at the same time keeping a healthy economy, prevent the loss of corporate investment as EU access closes, and guarantee no pain for the punters as Britain marches out. This promised outcome by the Brexit campaign was always a fraud.

This week May won parliamentary passage of her government’s Brexit plan but only by offering concessions to the hard Brexit lobby and, at the final stage, had to rely on a small group of defecting Labour MPs.

The hardcore Brexiters have another target — they seek to convince the EU that May cannot secure a parliamentary majority for any soft-Brexit package the EU negotiates with her. There is treachery at every turn.

In the end, the issue will be resolved by parliament or by another resort to the people.

The early 2019 deadline means this crisis has a termination point, though some extension of time cannot be ruled out.

The extraordinary feature of the British crisis is that nobody — politician, adviser or even journalist — pretends to know how it will finish. May has held her party together so far, warning the alternative is a dreaded left-wing Labour government headed by Jeremy Corbyn.

She is correct. The combination of Brexit and the arrival of the most left-wing Labour government since the 1940s would escalate the risk of a serious crisis of confidence for Britain.

The truth, however, is that the conservatives will live or die by their management of the Brexit transition. Over the northern summer break the Prime Minister will put to the British people a campaign, part scare/part justified, on the consequences of a ­disorderly or “no-deal” exit with the EU.

For May or her successor, the type of Brexit is pivotal.

At this week’s Australia-UK Leadership Forum in London there was intense discussion of how Britain, liberated from the EU, can discover the sunlit uplands further afield.

May has told Malcolm Turnbull she is keen post-Brexit on a free trade agreement with Australia and the government stands ready to respond. For Britain, the US is the bigger catch and Donald Trump, despite backtracking, has made his views known — a soft Brexit that keeps Britain in the customs union hardly fits with any UK-US trade agreement.

While Trump was rude enough to put May on notice, the Turnbull government makes the same point more politely.

Going to the essence of the issue, Australian Trade Minister Steve Ciobo tells Inquirer: “There is now a mutual opportunity for the UK and Australia to return to an idea disregarded 47 years ago — autonomous trade relations between the two nations. It is critical that any FTA we negotiate be high-quality and comprehensive.

“The reality, however, is that this depends to a large extent on the choices the UK makes in implementing Brexit and deciding its future links with the EU.

“If Britain retains access to the customs union, then such an outcome will limit the scope for an autonomous FTA negotiated with Australia.”

This is just one example of how Britain’s future will be shaped by the decision over which it now ­agonises.

British Trade Minister Liam Fox said this week that Brexit means a closer Britain-Australia partnership in the digital space, a quality FTA and an even stronger two-way investment relationship.

Yet the idea of a possible ­Australia-Britain FTA has another purpose — as a sign of strategic intent.

There are talks and ideas now over a range of deeper collaboration between the two countries — economic, security and trade.

Uncertainty created by Brexit is linked to a far greater global uncertainty, Trump’s assault on the global pillars of stability — free trade, the US alliance system and the norms that have sustained the liberal international order.

Foreign Minister Julie Bishop captured this uncertainty last month when she said: “With the US fighting Canada and making friends with North Korea, who can make sense of what’s going on?”

The outlines of an Australian approach to the consequences of Trump are discernible. It has two arms. First, Australia seeks to maintain its alliance ties and constructive relations with Trump’s America. It will encourage the US to stay engaged in the Indo-Pacific and act as a responsible global leader.

This is damage limitation. Given the military and security infrastructure that underpins the US alliance, there is still optimism Australia can survive Trump short of enduring damage to our US alliance arrangements.

The second arm is working with fellow nations in the region and in the world to uphold the liberal norms that Trump assaults. This acknowledges that Australia, Britain and other nations have a high vested interest in defending the principles of the liberal global order from Trump’s protectionism and his “America first” assault.

University of Sydney professor James Curran, a delegate to the Australia-UK Leadership Forum, tells Inquirer: “The key for Australia is to hold its nerve. Trump has no regard or respect for the post-Cold War liberal international order and sees it as a charity project that the US should no longer have to pay for.

“The dysfunction of the Oval Office in real and disturbing. The damage this president is doing to domestic US support for the system that has worked for us is potentially deep — but it is not terminal.

“Australia should eschew panic for patience and look to maximum co-operation with regional partners as a means of demonstrating its enduring commitment to the rules that have underpinned relative peace and prosperity over the past three decades.”

In this context Britain needs a Brexit that strengthens, not weakens, its global role — and that won’t be easy.

Martin Parkinson, head of the Prime Minister’s Department under Turnbull, said in London this week that current events mean “there is a renewed imperative for Australia and the United Kingdom to prioritise working together” bilaterally and globally.

The truth is that Australia is a stand-alone nation.

It will never be a state of the US; it will never join the EU; it will never belong to some regional group that shares sovereignty.

It can only seek to leverage its power, support a rules-based international system and deepen its ties with its neighbours. This is more essential than ever, given the rise of an assertive China.

Parkinson warns that the contemporary challenge is twofold — from huge shifts in geopolitics, and a growing malaise within democratic systems.

He argues liberal internationalism is now more threatened by developments “within the West itself” — witness the British and US traumas.

And Australia cannot escape.

“Despite our impressive economic performance the political discourse in Australia echoes that in North America and Europe,” Parkinson says.

“There’s an underlying anxiety in our populace about what the ­future will bring and a dissatisfaction with the results of our longstanding social compact.

“This shows up in the fragmentation of our politics, the embrace of the outsider and the rejection of ‘supposed expertise’.

“This cannot be divorced from the ongoing erosion of public trust in traditional institutions.”

Parkinson argues that mistrust is tied to worries about government competence.

While governments, in Australia and elsewhere, work hard at ­improved policy, “incremental improvement may not be enough.”

Herein lies a confronting choice for governments and political leaders: do they need to be bolder?

The proper response to the world of Trump and Brexit is a range of attitudes: patience yet boldness, keeping one’s nerve yet realising a crisis demands decisive action.