Alexander Downer: A trade deal with Australia is just the first step. It could open the door for Britain to the Asia-Pacific trading club

24 May

Alexander Downer is a former Australian High Commissioner to the UK and a former Australian Foreign Minister.

The UK’s departure from the European Union gives Ministers a huge opportunity to put freedom at the heart of this Government’s agenda. Freedom from Brussels’ bureaucratic meddling. Freedom to deviate from overbearing European laws. Freedom to strike trade deals around the world.

But what use is freedom as a word unless the Government puts it into practice? We are now beginning to see the opportunities that freedom can present in real terms.

Liz Truss, flanked by her rough and tough negotiators at the Department for International Trade, has worked tirelessly to battle for a gold-standard deal with Australia. A Free Trade Agreement (FTA) that reflects the export potential of British SMEs and services. An FTA that tears down the archaic barriers and restrictive tariffs that limit trade between two of the world’s closest allies.

Brexit was fought and won so that Liz and Boris Johnson could prove to British businesses and consumers that they can export their quality goods and services and import vibrant new products without the cumbersome interference of Brussels. If Britain cannot do a trade deal with Australia, a country with whom it shares a common language, history, and standards – then who can it do a deal with?

Total trade in goods and services (exports plus imports) between the UK and Australia was £13.9 billion in 2020. Britain is the second-largest source of total foreign investment in Australia, and the eighth largest two-way trading partner. The Government estimates a good deal could further benefit the UK to the tune of £500 million.

Does it want to have delivered Brexit only to allow unsubstantiated protectionist tendencies to limit that mutual growth further?

In recent days, a lot has been made of the potential for a UK-Australia FTA to do irreparable damage to British farmers. These claims are misguided. For example, Australia’s beef exports to the UK peaked back in 1955, accounting for 65 per cent of total exports. This trade was decimated when the UK joined the EU in 1973 – and today, exports to the UK make up a minute 0.15 per cent of Australia’s total. Despite this, as a result of trade diversification, the market has restructured and today Australian red meat products can be found in over 100 different markets, from the US to Japan, Indonesia to the UAE.

2021 is a vitally important year – and not just because Australia will welcome England down under for the Ashes tour.  Johnson hosts the G7 summit in June and will welcome some of the world’s most influential political leaders to Carbis Bay, Cornwall. In November, the Prime Minister hosts the COP26 climate summit in Glasgow.

These two events mark critical moments for Britain to take its proud, independent place on the world stage again. The best way of proving those credentials? Britain must walk the walk and not just talk the talk when it comes to “Global Britain” and free trade.

A good deal with Australia stands to benefit Aussie farmers just as much as Scottish whisky distillers; trade goes two ways. If “Global Britain” is to become a reality and not just a slogan, the Department for International Trade must be given the freedom and power to negotiate and then sign trade deals with great allies like Australia.

Boris Johnson and Scott Morrison have the chance to toast a comprehensive, trade liberalising FTA over a delicious Aussie beef steak and glass of English sparkling wine at the G7 summit in June. That would give Britain a huge boost in its aspirations to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the vast Asia-Pacific trading club that opens the trading doors to new corners of the globe.

I agreed entirely in 2016 with George Eustice, then the Farming Minister, when he backed Leave and urged proud British farmers to do the same. Let us now get on and get the deal done. Australia and Britain are two great friends. Now is the time to sign a Free Trade Agreement that allows our partnership to flourish further.

Alexander Downer: A truth runs through this Integrated Review – that foreign policy can no longer exist in isolation.

17 Mar

Alexander Downer is the Chairman of Policy Exchange, a former Australian High Commissioner to the UK and a former Australian Foreign Minister.

The publication of the Government’s Integrated Review yesterday should lay to rest the notion that Conservative governments are incapable of grand strategic thought. For decades, the left-leaning foreign policy establishment has argued that Britain is in terminal decline, a mid-ranking power at best, and that all the right has to offer is imperial nostalgia. This fatalism has only increased since Brexit: the UK at least had a role as the gateway to Europe for investors, ran the argument, but now even that has been lost.

Viewed from abroad, this always looked wide of the mark and the UK’s departure from the EU hasn’t changed that. As Australia’s foreign minister, then as High Commissioner in London, I was always aware not just of Britain’s historic role but its current status as a major global player with a bright future.

The UK remains the fifth largest economy in the world, a member of the UN Security Council, the fourth biggest spender on defence, one of the biggest spenders on overseas aid – and is respected around the world as a flagbearer of the rules-based international order. If anyone thinks Brexit has changed the last of those, consider that the UK – as the Integrated Review underlines – is in the process of giving 5.4 million Hong Kong residents the right to come and live in the UK, and eventually become citizens.

Far from abdicating its global role, under Boris Johnson Britain is embracing and even expanding it. In the Review, we have the first real glimpse of what he means by “Global Britain”: it is a country that is assertive, knows what it believes but picks its battles carefully.

The wider Indo-Pacific is one of three notable areas that the Review gets spot on. It recognises that here is the great engine of global growth in the coming decade and beyond. China’s “increasing power and international assertiveness is likely to be the most significant geopolitical factor of the 2020s”, it notes, arguing that the UK will need to remain open to Chinese investment and trade. On China the theme is engagement, but not at any price. It wisely observes that we and other open trading economies will have to be on guard against practices that adversely affect our prosperity and security.

But the booming Indo-Pacific is about much more than China and this is recognised by the Review, which notes the importance of UK relations with other powers in the region including India, Japan, South Korea, Vietnam, Indonesia, Malaysia, Thailand, Singapore and the Philippines.

It is these countries that would welcome the UK stepping up its military, diplomatic and trading engagement in the region, as Policy Exchange found through its recent Indo-Pacific Commission – chaired by Stephen Harper, the former Canadian Prime Minister, and backed by another former Prime Minister, Shinzo Abe of Japan, one of the biggest figures of the post-war era in the Indo-Pacific, and who popularised the term “Free and Open Indo-Pacific”.

As we found, there is absolutely zero sense from these countries that Britain is overestimating its future global role in what used to be called “east of Suez” in a past era. It has hard and soft power capabilities and can demonstrate both in the region. The deployment of HMS Queen Elizabeth, one of the two largest warships ever built for the Royal Navy, to the Indo-Pacific will be a symbolic complement to putting “diplomacy first”, which the Review ultimately recommends.

Notably, it also backs the UK joining the Comprehensive and Progressive Trans-Pacific Partnership – as recommended by Policy Exchange over the past two years. No one is arguing that this will replace the UK’s trading relationship with the EU; but until now this new world of opportunity has been badly overlooked.

The phrase “world-class” can be overused by politicians and mandarins. Justifiably, it is only used by the Integrated Review in the area of science and technology, where it is observed that Britain is ranked fourth in the Global Innovation Index, has won the second most Nobel Prizes of any nation, is third in the world for tech “unicorns” – with 77 tech companies valued at over $1billion, and is home to some of the most cutting edge medical and science research, which of course produced the Oxford/Astra Zeneca vaccine and leads the world in genome sequencing.

With this in mind, the aim for Britain to cement its position as a science and tech superpower by 2030 is not just laudable but realistic. The creation of the £800 million Advanced Research and Invention Agency will help here. Ministers must only bear in mind, as Policy Exchange has observed, that high-risk, high-reward research inevitably involves more than the usual amount of failure along the way. The destination is worth the turbulence on the way.

The context of this report is vitally important. It was already a tall order producing an integrated strategy as the UK exited the EU. The Covid-19 pandemic – a once in a century hit to the global economy – made Brexit seem almost a second order issue. So perhaps the most important section of the Review is on resilience. The aim here is to establish a “whole of society” approach to resilience, so that it involves individuals, businesses and organisations. A national endeavour, rather than a subject for a secretive Cabinet subcommittee. We have to ensure together that we are prepared for the next crisis, whatever it might be.

This reflects a broader truth that runs throughout the Review: there is no such thing as pure foreign policy any more. It’s more obvious in an area like resilience or security. We are all familiar with the idea of threats abroad that quickly lead to risks on the home front.

What the Integrated Review puts forward – and expresses better than any UK Government policy paper I have seen before – is an argument that in a more interconnected world and multipolar world, prosperity at home is more than ever the result of how Britain deals with the world. The UK, as the Review recognises, needs an integrated approach that ensures it is more agile in shaping the international order, in taking advantage of opportunities that further its prosperity, and better prepared for the shocks that will come.

Alexander Downer: A forward-thinking UK should shift the weight of its strategic policy towards the Indo-Pacific region

24 Nov

Alexander Downer is the Chairman of Policy Exchange, a former Australian High Commissioner to the UK and former Australian Foreign Minister.

Anyone who thinks Brexit represents the UK retreating pathetically from the modern world into “splendid isolation” – and that this is how our departure from the EU is viewed by our international allies – should read The New York Times a bit less, and listen more to the voices of world leaders and friends of this country who say differently.

Three recent examples stand out for me. The first is Stephen Harper, former Canadian Prime Minister, Chairman of the International Democrat Union – an alliance of Conservative and right-leaning parties – and Chair of Policy Exchange’s Indo-Pacific Commission. Announcing the launch of that commission over the summer, he argued that the “declinist” view of the UK “flies in the face of much available evidence”, noting that “Britain remains the world’s fifth largest economic power, with a proud history as a seafaring, trading nation and a commercial network that has outlasted the Empire”. He is spot on.

The second is Shinzo Abe, former Japanese Prime Minister, and the most significant Asian democratic politician of the post-war era. In the foreword to the new report from Policy Exchange’s Indo-Pacific Commission, published on Monday, he says: “As a leading global power, Britain has a major role to play in the Indo-Pacific,” observing that “on the security front, the British military, and the Royal Navy in particular, will be a welcome presence in the seas of the Indo-Pacific.”

Third comes Scott Morrison, the Australian Prime Minister, who was awarded the inaugural Policy Exchange Grotius Prize, named in honour of the founding father of international law, on Monday. On the commission’s proposal for Britain to shift the weight of its strategic policy toward the Indo-Pacific, he said: “I couldn’t agree more and have conveyed the same to Boris. I endorse the report’s ‘new vision for a reinvigorated community of free and independent nations with one overriding goal in mind: to reinforce a sustainable rules-based order in the Indo-Pacific region (IPR) that is resilient but adaptable to the great power realities of the 21st century.’”

There you have it. We’ve grown used, in recent decades, to gloomy domestic talk of Britain’s post-imperial decline but – as I have found in my own experience, as Australia’s Foreign Minister and latterly as the Australian High Commissioner in London – international perspectives tend to tip the scales the other way. The UK’s friends are united in their belief that there is an important role for this country to play and a whole world beyond Europe that wishes to give a very warm welcome.

Nowhere is that more true than the Indo-Pacific – home to some of the fastest-growing economies of the 21st century. Britain, out of national self-interest more than anything else, should be working hard to build new trading relationships here, backed up with diplomatic and military heft. It is a very positive sign that the first major free trade deal signed by UK Government was with Japan, the third largest economy in the world.

As Liz Truss, the UK’s International Trade Secretary, recognised at the time, the deal was an important step towards joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which would, she argued, “give UK business a gateway to the Asia-Pacific region and help to increase the resilience and diversity of our supply chains”. Policy Exchange’s Indo-Pacific Commission backs up that idea strongly, noting that it would link the UK to more than 13 per cent of global GDP and the world’s third-largest free trade area.

As the report also makes clear, there has been far too much focus in foreign policy circles over the last 30 years on the economic and military might of China, at the expense of the rest of the Indo-Pacific region. I firmly believe that China should be engaged with, rather than contained, and that its importance to the world’s economy has only been underlined in the past year as we have battled a pandemic that emerged in Wuhan and led to a global economic shutdown.

However, even in a year such as the one we have had, it is vital to note the huge economic transformation that has been going on in China in recent decades is part of a wider regional trend driven by other economic powerhouses, including Japan, Taiwan, South Korea, India the Association of South East Asian Nations, and Australia.

Of course, Britain cannot overplay its hand in the region as it seeks to play a greater role in what used to be called “east of Suez” in colonial times. Wisely, the emphasis in the Commission’s report – contributed to by key political and diplomatic thinkers in countries from New Zealand to Sri Lanka – is not on the UK acting as a “leader” in the Indo-Pacific, but rather as an “enabler” and facilitator for others in the region, which should take the lead.

This will apply in particular to one of the most attractive ideas in the report – a new Indo-Pacific Charter, which would in effect be a clear set of mutually shared aspirations for the future of future of Indo-Pacific relations that other major global players like the UK, and the US – which has a greater military and diplomatic presence there than any other foreign power – can support.

This charter could be as significant in the 21st century as the Atlantic Charter, signed by Churchill and Roosevelt in 1941, was in the 20th century. Suggested principles include no nation being “prevented by any other from free and full access to the high seas/global commons of the Indo-Pacific, for any peaceful purposes, including trade”. Without basic rules such as this, the region clearly will struggle to prosper.

There can be no forcing or co-opting of independent sovereign nations into submitting to such principles. But the idea, as Morrison observed in his brilliant speech accepting the Grotius Prize, is instead nations “freely submitting to such rules” around economic, security and global environmental issues “because it is in their broader national interest to do so”.

It will be in Britain’s national interest to engage more fully in the future in a prosperous Indo-Pacific. Likewise, as we have seen with Policy Exchange’s Indo-Pacific Commission report and the warm response to it, nations in the region see it as in their national interest to welcome the UK with open arms.