What could the EU have learnt from North America about federalism and sovereignty?


Today’s piece accompanies New World Order: Lessons from the Americas on Federalism, Intergovernmentalism, and Sovereignty, published with a foreword by Liam Fox MP (written prior to his return to government earlier this year).

America – in terms of both the continent and the country – provides a rich seam of examples to study how federal systems work. Before the United States itself was born, the disparate colonies were already reviewing a variety of propositions on how they might come together more closely, retaining some powers at a local level while sharing other responsibilities jointly under the Crown.

One of the comparisons sometimes cited was even that of the Iroquois Confederation. The influence of the model of the Six Nations is sometimes exaggerated, though Benjamin Franklin in the 1740s did turn his printing press to reporting the speech of Canassatego extolling their Iroquois method of communal association: “We are a powerful Confederacy, and by your observing the same methods our wise forefathers have taken you will acquire much strength and power.”

Over the course of the following century, the three emerging great states of North America – the USA, Canada, and Mexico – adopted and adapted their own federal models. This was a logical development, given the continental spread and scale of these countries. Other nations in the Americas proved more reticent to merge in such terms. The Caribbean in particular provides a fascinating testing ground of the motives and disincentives at play politically, culturally, and economically. Meanwhile, the shifting status of the First Peoples and the quasi-sovereign position these communities hold within national constitutions provide the viewer with further comparative studies, particularly when considering the language of sovereignty used in other debates.

So all told, the Americas supplies us with an extraordinarily rich historic and contemporaneous testing ground with which to compare the European Union as a political structure. I explore some findings in an updated study BrexitCentral kindly publishes today, called New World Order.

By looking at these comparisons constitutionally, it becomes clear that not only is the EU already much more than an embryonic federal entity, but that the very nature of the structure is centripetal. To put in in astral terms, the gravitational pull of the core at the heart of the EU solar system means that member states do not have a stable orbit, but instead have a decaying one. This ultimately leads to the spiralling in and end of the separate nation state.

The physics of integration is discernible through case studies in North America. Once established in outline, the federal system aggregates power to the centre during times of crisis and through eras of technological advance – and both those constitute central elements of modern human existence. In the case of the United States, it has even happened despite a starting century of powerful countervailing state rights movements that first fuelled the colonial rebellion in Massachussetts, an actual (and defeated) majority who opposed the drafted Constitution, the anti-federalist and then Jeffersonian political movements, and the small matter of a Civil War.

By understanding the history, we can also best appreciate the types of threat that emerge from reaching too close a form of association with the EU after Brexit. Any deal that keeps the UK within the Single Market, and does not remove the country from a panoply of EU institutions and quangos, risks maintaining the gravitational ties between this country and its transitional federal neighbour.

This is not to argue for a complete rupture across the board, but to contrast the value and risks of remaining part of many institutions that are bounded by legal frameworks, budgets, and obligations. Of the Euro-quangos in existence, I would suggest there are eight where a form of participatory membership may be beneficial, seven more where associated status might be useful, and ten where it might be worth having the phone number on a post-it on the Whitehall wall. The rest could be followed on Twitter. So the negotiating default should not be one of ‘staying put creates less fuss’. Over time, inaction now will do the reverse.

But there is another key value in reflecting on how structures work on the other side of the Atlantic. Occupants of Brussels offices may like to consider themselves the exemplar of future-looking trade structures being pursued across the world, but the reality is somewhat different.

There are three integrationist approaches across the Atlantic, combining the status of customs unions with the principles of political integration.

The first are those microstates, particularly islands, who have at some point assessed that it is more cost-effective to merge with other former colonies that are culturally and linguistically like themselves, especially against the threat of strong outside influences. (That assessment has tended to hit local political limits.) The second are the Marxist revolutionaries seeking to create a localised New World Order, while unable to resolve the ideological and ethical questions of whether to cut tariffs between themselves or not. The third group are the Bolivarist idealists who seek to create a single country based on pre-independence continentalism.

There are certain parallels with the EU in each instance, most especially the last category. However, such an integrationist approach is not the majority one, constituting 6 out of 23 models that have emerged since WW2. Against the integrationist models, we can contrast the principle of the minimalist trade deal and even the un-politicised customs arrangement. A number of deals have sought to facilitate exports without generating heavy political structures in tandem. The most famous example is that of NAFTA, though there are a surprising range of others such as the Alianza Pacifico (2011) showing the principle is alive and well.

Where models do develop additional institutions, they can generate problems familiar to ourselves. The United States and Canada, for example, have opted out of the Organisation of American States’ human rights court, as they see that system as being orientated to correct abuses not relevant to their own country (like Death Squads), while risking damage to Common Law traditions and hindering accountable reform of legal processes.

Perhaps though the most striking comparison comes from something that Latin America does not have. Much of the drive towards economic harmonisation south of Campeche has happened because of long-standing regional trade barriers, including Non-Tariff Barriers. These have endured there because of the comparative failure to achieve agreements through continental-wide structures operating under the UN and WTO rubrics. By contrast, North American and in particular European states have fallen under the catchment area of sister organisations that have been global leaders in facilitating agreements to make exporting easier.

Bodies such as United Nations Economic Commission for Europe (UNECE) have acted as key negotiating fora to allow for voluntary standardisation between cooperating countries across thousands of products, in a way that simply hasn’t happened in other parts of the world. These agreements are then incorporated directly into national law by non-EU members, while EU members transpose it via EU law (adding gold plating) first.

Since the Economic Commission for Latin America and the Caribbean (ECLAC) has failed to fulfil the potential of its European sister UNECE, this has left a huge gap in South and Central America. Countries have tried to fill it in two ways – by plugging the role of UNECE intergovernmentally, or creating a Bolivaran form of the European Commission with all the consequences that go with it.

The jury is still out how those contrasting models will evolve in the future. It may well be that Latin America continues with its own competing EFTA and EU counterparts, one pushing political union while the other emphasises cooperation and a flourishing economy. At least on that continent, both models fill a significant trading gap rather than add another layer of EU bureaucracy on top of an existing international standards system.

So it transpires in the end that perhaps the EU is simply on the wrong continent. Unfortunately, it is not a commodity that can be simply and uprooted from our midst and exported to those in the world who might actually need it.