Brexit and Trump – implications for the Baltic Sea Region

On June 23^rd, 2016, a modest majority of British citizens voted in a national referendum for UK to leave the European Union. On November 8^th, 2016, the American citizens elected Donald Trump as the 45^th President of the United States. Both of these events were set to send ripples across the political landscape in the Baltic Sea region.

A recent report, published by the Baltic Development Forum (BDF) in cooperation with the Konrad Adenauer Foundation, examines the socio-economic and geopolitical implications of these events for the Baltic Sea region. 

Brexit affects the Baltic countries on three levels – various social, economic and security issues can be linked to UK’s decision to leave the European Union. According to the report, there are more than 220,000 EU citizens from Lithuania, Latvia and Estonia alone currently living in the UK. While it has been assumed that their status won’t change, no guarantees have been made. Moreover, it is rather improbable that UK’s borders will remain open for future arrivals of workers from Baltic countries.

Four of the top six countries judged as most vulnerable to the economic impact of Brexit are Baltic countries (according to a ranking by Standard & Poor). Lithuania, Latvia, Poland and Estonia will all be affected, mainly due to cuts in the EU budget and because of the number of migrants from these countries living in the UK. The report states that Brexit might result in a loss of less than 0,5% of GDP up to 2030 for the Baltic states.

Security issues that might follow UK’s decision to leave the EU are also not to be underestimated. UK has been a long standing ally of the Baltic countries in terms of their policy towards Russia. The report mentions doubts as to whether the EU Member States will remain united in their stance regarding the sanctions on Russia following Brexit.

The report also considers the “Russian question” in context of last year’s US presidential election. President Trump’s opinion of NATO as obsolete in view of its supposed lack of use in the war on terror was a surprise for the majority of Baltic countries. This statement, coupled with a hint towards a much softer stance on Russia, despite a recent flurry of highly controversial political actions by the Eastern European giant (annexation of Crimea, warfare in Eastern Ukraine and Syria), resulted in a great deal of anxiety among the Baltic countries.

The report alleviates some of these worries based on the first official statements made by the new US Administration indicating a continuation of a strong US policy towards Russia and its uninterrupted support of NATO. The author also stipulates that President Trump’s opinion that the European countries should contribute more to global security issues can be viewed as an opportunity rather than a threat for the Baltic states.

The aforementioned matters also have a profound impact on the maritime transport and port industry in the Baltic Sea region. They will be a part of the discussion during the upcoming Baltic Ports Conference 2017, to be held in Trelleborg, Sweden, on 6-8 September, 2017.

Bo Petersson, Professor of Political Science & IMER (International Migration and Ethnic Relations) at the Malmö University will feature them in his keynote speech titled “The changing political landscape across the Baltic and Europe” during the first day of the conference.

The report “Political State of the Region” can be accessed directly from the BDF website.