Be Prepared for an Independent Scotland

April 15, 2014 Topic: Politics Region: United Kingdom

Be Prepared for an Independent Scotland

It wouldn't be disastrous, but Washington needs a plan.

The Scottish independence referendum on September 18 is five months away, with polls showing that the ‘Yes’ camp is gaining ground. Scottish first minister Alex Salmond recently visited the United States to take his case for Scottish independence to Washington, D.C.—and to celebrate Tartan Day in New York.

When Salmond and British prime minister David Cameron agreed to the terms of the plebiscite last May, polls showed that Scots largely opposed independence. Cameron won plaudits from unionists for refusing to concede a third option to Scottish voters—a wishy-washy version of what’s called ‘devolution max,’ which would have given the Scottish government even more powers and greater autonomy. Under the devolution legislation enacted in the first months of former prime minister Tony Blair’s government in 1997, the United Kingdom established a Scottish parliament for the first time in the nation’s history.

Though polls still show that the ‘No’ camp is leading, U.S. policymakers should be taking the possibility of an independent Scotland more seriously and, accordingly, preparing for the possible repercussions of a successful ‘Yes’ vote for U.S.-Scottish relations.

No third country has a greater stake in the outcome of the Scottish vote than the United States, which would have to reconfigure its ‘special relationship’ with what presumably would be the ‘United Kingdom of England, Wales and Northern Ireland,’ while formulating a wholly new relationship with an independent Scotland. It’s a relationship that the United States has never had to consider seriously, given that when Scotland and England merged with the Act of Union in 1707, the original American colonies were still sixty-nine years away from declaring independence.

But there are important considerations that U.S. policymakers should start working through now, not in September or later, with regards to at least three key metrics—security, diplomacy and economics.

The bilateral security relationship with Scotland would be trickier than the current relationship with Great Britain, though Scotland would presumably work to quickly rejoin NATO as an independent power, and despite its differences with the United States, would be counted among its most intimate and dependable allies. Unlike the warning of former UK defense minister George Robertson earlier this week, Scotland’s independence would not be ‘cataclysmic’ for global security. The most glaring issue is the future of the Trident nuclear program—four nuclear submarines hold Britain's nuclear missiles, all of which are located in Faslane, within one of three of Her Majesty's naval bases. Though it’s likely that an independent Scotland would opt to remove the nuclear weapons, the nuclear issue would be one of the most delicate topics of negotiation between Edinburgh and London, and it could cause a wholesale reevaluation of the UK’s nuclear deterrent. That, in turn, would implicate U.S. interests in several regards, including its European security strategy, nuclear-nonproliferation efforts and the pecuniary interests of U.S. contractors who currently supply Trident missiles to the United Kingdom. But U.S. security concerns transcend Trident. Salmond has given both the administrations of George W. Bush and Barack Obama fits, first by opposing the U.S. invasion of Iraq eleven years ago, and more recently by his government's decision in 2009 to free Abdelbaset al-Megrahi, on the basis of compassionate grounds, from Scottish prison. Megrahi was convicted in 2001 on murder charges and sentenced to life imprisonment in relation to the bombing of Pan Am Flight 103 over Lockerbie, Scotland in 1988. Megrahi moved back to Libya, where he lived nearly three more years. The decision earned a stern rebuke from Obama himself, and the incident further strained U.S. relations with Salmond's government.

The United States might also worry that Scottish independence would displace one major ally with two minor allies, but that’s not necessarily the case. The remnants of the United Kingdom would still constitute an incredibly formidable world and European power. Scotland’s population of 5.3 million is larger than Norway’s and only a little smaller than Denmark’s or Finland’s. Nonetheless, it comprises just 8.4 percent of the total UK population today. While there’s some discussion that the United Kingdom without Scotland could lose its permanent seat on the United Nations Security Council, it’s already the least populous state of the five permanent members, and none of the other four permanent members have an interest in opening the membership question for debate. Though what remains of the United Kingdom would have a marginally less important voice within the European Union, its scope is already limited because it’s neither a member of the eurozone nor the Schengen border-free zone. From the perspective of U.S. influence in Europe, it would be much more devastating if Cameron held a promised referendum on EU membership in 2017, and the United Kingdom—in whatever form—voted to leave the European Union. In this event, Scotland, as an independent country and presumably a member of the European Union, would become much more strategically important to the United States.

Scottish-U.S. trade would also play an important role in future relations between the two countries. Scotland's economy, which amounts to around $250 billion, is larger in nominal terms than the economies of Greece, Finland, Ireland, Portugal or Peru, once North Sea oil and gas are taken into account. An independent Scotland’s most important trading partner would presumably still be the rest of the United Kingdom. In 2012, the value of Scottish exports to the rest of the United Kingdom amounted to £47.6 billion ($79.1 billion), excluding gas and oil. But the United States was Scotland’s most important international trading partner, with £3.5 billion ($5.8 billion) in Scottish exports—more than any other single country and more than Scottish exports to France and Germany combined. Many Scottish companies and brands, from Walkers Shortbread to Standard Life, are well known in the United States. Promoting greater U.S. trade ties was the main focus of Salmond’s recent trip to the United States, and Scottish membership in the European Union would guarantee that Scotland is a party to the Transatlantic Trade and Investment Partnership, the free trade pact currently under negotiation by the European Union and the United States.

Beyond the immediate policy impact, there’s an important cultural component worth considering. With up to thirty million Scottish Americans in the United States, Scottish pride runs beyond kilts, bagpipes, single-malt whiskies, Sean Connery and Braveheart. The idea of an independent Scotland could nurture a renaissance of Scottish American pride that boosts tourism and other cultural links. The roots of the American revolution lie in Scotland as well—David Hume, Adam Smith, Frances Hutcheson and other great minds of the Scottish Enlightenment laid much of the intellectual groundwork of American independence. Early American leaders, from Andrew Jackson to Alexander Hamilton, trace their ancestry to Scotland, and even the character of ‘Uncle Sam’ is allegedly based on a real-life New York man whose parents arrived from Scotland. In the early years of the American republic, Scottish steamships ferried goods across the Atlantic, giving the United States a vital link to European markets. Scottish immigrants, who continued to arrive throughout the nineteenth century, contributed to American technological and cultural innovation, from the Edinburgh-born Alexander Graham Bell’s invention of the telephone to the emergence of bluegrass music among the Scottish-American communities that settled in Kentucky, Tennessee and North Carolina.

Of course, the future of an independent Scotland in the twenty-first century is a leap into the unknown.

In the best-case scenario, Scotland would comfortably grow into its new role. It might easily negotiate EU accession. Having incorporated the acquis communautaire, the body of EU regulatory law, into Scottish law over the past four decades, it should theoretically take little time for Scotland to become the twenty-ninth EU member. It might also work amicably with London to reach agreement on both short-term and long-term monetary policy issues, either by maintaining the British pound, joining the eurozone or forming a new, purely Scottish, currency. Its economy could prosper with the promise of residual North Sea oil and hidden energy sources that are developed as new technologies emerge. Edinburgh could take its place as an international capital and one of the centers of European finance, no longer in the shadow of the City of London. Salmond and his Scottish National Party might even, in time, transform Scotland into a social-democratic state more akin to its Nordic neighbors than to the Anglo-Saxon model of Washington and London.

In the worst-case scenario, a recalcitrant London or a nervous Madrid, unwilling to encourage its own Catalan and Basque separatists, might delay Scotland’s EU membership for years, stranding the tiny country from the free movement of goods, services and workers that it currently enjoys. An acrimonious split with the rest of the United Kingdom could lead to years of litigation and uncertainty. Lackluster energy production could dampen Scotland’s economic outlook, and further regionalism could haunt an independent Scotland if the Highlands, or the Orkney and Shetland Islands, demand greater local autonomy and control over oil revenues. If Scotland suffers a brain drain, it could end up like many countries currently on the European periphery, with dwindling public funds to service the welfare, health and education of a growing, graying nonworking population.