Lettice Bromovsky: Now that the UK has a firm place within the ASEAN bloc, it must stand up to China’s aggressive antics

27 Aug

Lettice Bromovsky is a political commentator and contributor to Young Voices UK.

The UK has become the first country to join the ASEAN (the Association of South-East Asian Nations) as a dialogue partner in 25 years, bolstering its post-Brexit vision of “Global Britain” and further integrating itself into one of the fastest growing trade areas in the world.

Nevertheless, entering into this region comes with significant difficulties, and to put it bluntly, the UK will have its work cut out for it. The disparity of the countries within the ASEAN means that consensus agreements are difficult if not impossible to reach, and the encroaching red fog of China into the ASEAN region wields with it the growing concern of Chinese expansionism.

Deepening economic ties with the 10 member state organisation will be hugely beneficial for Britain. Boasting an annual GDP of £2.3 trillion, the ASEAN is now four and a half times larger than it was in 2000. Total trade between the UK and the 10 member nations of the ASEAN amounted to $45.5 billion at the end of Q3 in 2020.

Although there are substantial economic benefits for the UK joining, the region is plagued with an array of differing political systems and vast economic disparities. For example, Brunei and Cambodia are considered authoritarian regimes, whereas the Philippines and Thailand are deemed democracies. And while Singapore maintains a high median annual income of $59,590 in 2021, Laos’ median income remains low at $2570.

Unsurprisingly this often makes it difficult for the organisation to reach unanimous agreements. Indeed, a regular criticism of the ASEAN is its poor consensus-driven decision making approach. One particularly out-dated piece of legislation is the principle of non-interference, which prevents member-states from intervening in each other’s domestic affairs.

During the Myanmar Coup in February 2021 the shortcomings of this principle became obvious. When the UN tried to vote on an arms embargo to condone Myanmar for their clear violation of human rights, Thailand, Laos, Cambodia and Brunei abstained. This principle is warping the moral fabric of countries, over fears that it could lead to greater economic instability.

As a dialogue member the UK now has access to the high-level ASEAN summits and other top-level discussions. During these discussions, Britain can encourage deeper reform and further political stability.

Another hurdle for Britain in the region is the ever growing dominance of Chinese influence. In 2010 at the ASEAN Regional Forum, China’s then foreign minister remarked “China is a big country and other countries are small countries, and that is just a fact”. This brasen comment perfectly portrays China’s ingrained belief that small countries must adhere to the will of larger ones.

China has used the looming threat of sanctions or reduced Chinese investment as a way to control the ASEAN members and to further its own expansionist policy into the South China Sea, an essential trade route for all Asian economies.

Chinese abuse of power is not uncommon to hear or read about in the media. In fact, its growing regularity should be of great concern to western democracies. In 2012, the Philippines challenged China on its entitlements in the South China Sea. The dispute was brought before the international tribunal in the Hague. The Philippines won the case, but China refused to accept the ruling. Five years on, China still stands vehemently opposed to this ruling and has only asserted itself more aggressively in the region.

China has sunk Vietnamese fishing boats that were in contested waters between the two countries. It has occupied an exclusive economic zone owned mutually by the Philippines and Vietnam, with around 220 Chinese militia vessels. In 2020, a Chinese ship harassed Malaysian and Vietnamese gas exploits in their own economic zones. This is all on top of increasing military and naval exercises in the South China Sea as a flashy display of strength.

China’s inability to engage on a geopolitical level almost reached breaking point in recent foreign affairs. Last month a Chinese Foreign Ministry spokesperson met with the Taliban, not only recognising the violent and oppressive organisation, but going one step further to reiterate that they were ‘ready for friendly relations’.

Even today the Chinese embassy is one of the very few that remains operational after the fall of Kabul this week. At first glance this could be interpreted as China losing allies and therefore reaching for those equally desperate, but the reality is China is only interested in its own economic stability. If the disruption in Afghanistan manages to overflow into Pakistan or Central Asia, then China’s economic interests and supply chains will be most affected.

Britain cannot allow this blatant abuse of economic power and bullying to continue. China’s strength and confidence to punish countries is growing, it was only last year after Australia called for an inquiry into the coronavirus outbreak, that China both verbally threatened, stating that Australia was treading a “dangerous path” and then economically punished the country by imposing tariffs of 80 per cent of Australian barley and completely banning beef from Australia’s four biggest abattoirs.

The only way we will be able to combat this kind of playground politics is from a unified front. Britain needs to encourage less economic reliance on China in the region. This can be done by solidifying free trade agreements with the countries in the ASEAN. The UK has already successfully achieved this with Singapore and Vietnam, but it is imperative that we begin to forge new ones with the remaining eight members.

A diversification of supply chains will also weaken China’s hold on the region as with greater economic diversification it will be increasingly hard for China to economically coerce the ASEAN.

If, or more likely when, China next attempts to use its size and might to further its own foreign policy, an unified process of imposing offsetting measures, such as tariffs will be essential in combating this type of bullying.

Chinese aggression cannot and should not be tolerated. A unified approach against this authoritarian power is the only way to combat Chinese influence and expansion. Now that the UK has asserted its place in the region, it must begin work encouraging the tenets of a free and democratic society.

Stephen Booth: The Integrated Review – a further step towards the wider world and away from the European Union

25 Mar

Stephen Booth is Head of the Britain in the World Project at Policy Exchange.

A “Global Britain” needs to ensure it is relevant in and to all three of the world’s major economic and geopolitical hubs – Europe, North America, and the Indo-Pacific. Brexit or no Brexit, it is clear that the economic and political weight of Europe is in relative decline and that global power is shifting, predominantly due to demographics and the rise of economies in Asia. 

Brexit has only emphasised the need for the UK to diversify its international relationships and that it must be prepared to do so across a wide spectrum of areas. It was significant, therefore, that last week’s Integrated Review (IR) emphasised such coherence across government, mirroring a world where the boundaries between prosperity and security, trade and development, and domestic and foreign policy are increasingly intertwined. 

The IR reflects several concepts and recommendations that have featured prominently in the think tank I work for, Policy Exchange’s, research. Arguably, the most significant is the “Indo-Pacific tilt”. Trade policy was not highlighted alongside security, defence, development and foreign policy in the official title of last week’s IR, but did feature in its conceptual development and it is a key strand of the document. It has emerged as a key component of the UK’s new strategic approach and is central to the “tilt”.

The UK intends to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and become a Dialogue Partner of ASEAN. The UK has already secured a deal with Japan. Bilateral trade negotiations with Australia and New Zealand would be expected to bear fruit this year, while talks with the United States could take longer. 

India is an increasingly important part of the UK’s Indo-Pacific economic strategy and the IR confirmed that a potential comprehensive trade deal is a long-term ambition. We may expect to hear more about the roadmap to a deeper UK-India economic relationship during the Prime Minister’s planned visit to the country next month.

Individual free trade agreements will provide important economic benefits, particularly for certain sectors of the economy, but their aggregate impact on UK GDP is likely to be limited in the short-term. Trade deals are best viewed as important elements of a long-term strategy of diversification away from – rather than immediate replacements for – the EU market and increasing the UK’s links to the economic and political developments of the world’s faster-growing markets. 

The key to taking advantage of these opportunities will be to marry the twin aims of outwardly projecting “Global Britain” and “Levelling Up” those regions of the UK that have most struggled to adapt to globalisation. The IR recognises that for Global Britain to be a success, more of the UK must become integrated and competitive in the global economy.

For example, the government is launching new UK Trade and Investment Hubs in Scotland, Wales, Northern Ireland, and the North of England. This is a complex and long-term challenge. British businesses, smaller ones in particular, will need to be supported and encouraged to make the most of new opportunities which will take time.

It is welcome, then, that the IR acknowledges that the UK’s new trade policy is not simply a commercial endeavour. It is, rightly, viewed as an important part of a geopolitical toolkit that should be deployed to reinforce the wider economic, political and security relationships, upon which a successful Global Britain will rely. 

It is noteworthy that the IR underlines the UK’s ambition to “move from defending the status quo within the post-Cold War international system to dynamically shaping the post-Covid order.” An important aspect of this means using “regulatory diplomacy” and working with like-minded partners to influence global rules.

This is particularly relevant in emerging technologies, as systemic competition intensifies, in particular with China. This is an often-underappreciated benefit of concluding trade agreements, particularly with platforms such as the CPTPP. It helps to embed and promote high-quality rules. 

The IR’s emphasis on the UK “as a global services, digital and data hub” highlights that the UK’s natural economic strengths often sat uneasily within the wider EU’s order of priorities, where the UK’s approach in these sectors has often differed from the other big players, France and Germany.

In my previous column, I noted that the UK is now able to put forward a distinct voice and approach that plays to its competitive advantage and confronts head-on the political reality that global power is shifting away from Europe, particularly in these innovative fields. France, Germany and the Netherlands have all adopted their own national strategies for the Indo-Pacific, prompting the EU to signal that it will set out a common vision in the “coming months”. The challenge for Brussels will be to produce something pragmatic that rises above the lowest common denominator.

Several commentators have remarked that the IR says relatively little about how the UK views its long-term relationship with the EU developing, both in terms of future cooperation and competition. This is perhaps unsurprising given the proximity of the publication of the IR to what has been a turbulent Brexit process.

In recent days, we have seen examples of both forces at work. The UK and the EU, along with the US and Canada, have co-ordinated new sanctions against China over its treatment of Uighur Muslims. However, the threat of an EU vaccine export ban, chiefly targeted at the UK, illustrates that any UK strategy for national resilience must now consider the prospect of an uncooperative EU.

The EU acting as a bloc can have the advantage of economic scale and collective weight but, due to internal tensions, it can lack coherence and focus, often particularly evident in its efforts to implement a collective foreign policy.

There follows a strong argument that the advantages of the EU were better suited to the relatively benign international order of the late twentieth century – an order underpinned by the US security guarantee – and its drawbacks less so to a world increasingly characterised by great power rivalry and systemic economic competition. Many within the EU have historically been reluctant to acknowledge that the transatlantic relationship, based as it is on NATO, is fundamentally asymmetric.

It is also worth recalling that during the Brexit negotiations, it was the EU that held out hope of a formal agreement with the UK on foreign and security policy. The UK ultimately decided it would not pursue such an agreement. The UK has made it clear in the IR that its commitment to European security is “unequivocal”, that it “will continue to be the leading European Ally within NATO”, and will “actively support” EU-NATO exercises.

However, in terms of direct engagement with Brussels, the IR highlights the opportunity for a “distinctive approach to foreign policy” outside the EU and the advantages of flexibility and coherence from acting independently. The UK has also committed to finding “new ways of working with” the EU on “shared challenges” and “where our interests coincide”.

There remains no sign that the UK is interested in any formal agreement with Brussels in this area. The implication is that the merits of cooperation will continue to be assessed on a case-by-case basis and therefore cannot be taken for granted, particularly if the economic relationship were to be further soured.

Daniel Hannan: Ignore the Europhile sneers. Joining the Pacific bloc marks the rebirth of Global Britain.

3 Feb

Daniel Hannan is a writer and columnist. He was a Conservative MEP from 1999 to 2020, and is now President of the Initiative for Free Trade.

She’s unstoppable, that Liz Truss. The epidemic has put most Whitehall ministries in damage limitation mode, but the Department of International Trade is on a roll, signing 62 free trade agreements to date – plus, obviously, the deal with the EU itself.

Those who can’t bear the thought of Brexit succeeding are, naturally, scoffing. These deals, they say, are largely replicas of what we already had as EU members. Their new line of criticism is, I suppose, an improvement on the position that they took until 12 months ago, namely that we would barely be able to strike any deals at all.

But it’s still not true. Many of the “rollover” treaties go further in small ways: more generous quotas, fewer restrictions. True, these liberalisations are chiefly tokens of intent. But that intent is real. With limited capacity, our priority has been to negotiate new FTAs – that is FTAs with countries where the EU currently has no trade deals, such as Australia and the United States.

Where there are serviceable existing arrangements, we have tended to say, in effect: “Let’s leave things roughly as they are for now, and agree to come back to it next year”. Even in these cases, though, we have often taken the opportunity to go further. The UK-Japan deal, for example, is more comprehensive when it comes to services and cross-border data flows than the EU-Japan deal, even though the latter had only just entered into effect.

This week, Britain took a momentous step when it applied to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a free trade zone comprising Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

Again, many Europhiles are sneering. Joining a Pacific trade pact, they say, defies geography. And it is of course true that Britain is not a Pacific country (other than in the technical sense of owning the Pitcairn islands). But we have exceptionally close links to a number of CPTPP members. Australia, New Zealand, Singapore and Canada are common law, English-speaking nations. So, to a degree, are Brunei and Malaysia.

One of the arguments for Brexit was that, in the internet age, cultural proximity trumps physical proximity. That argument is stronger now than it was a year ago. The lockdown has habituated us to using Zoom or Teams for important discussions. When travel returns, it is hard to imagine that business people will be as ready to hop over to Düsseldorf for the day to make a presentation. If you’re online, Rotorua is no further than Rennes – indeed, nearer in the sense that it shares your language, legal system and accounting methods.

Another argument for Brexit was that, by global standards, the EU was a slow-growth region. That argument, too, is now looking stronger. Although we talk of the pandemic as a global event, the truth is that it hit Europe much harder than Asia, Africa or the Antipodes.

But the biggest difference between the EU and the CPTPP is that the latter is a trade agreement rather than a state-in-the-making. Its members simply seek to maximise their prosperity through greater specialisation and exchange. Joining the CPTPP does not involve making budget transfers to its poorer regions, or accepting the supremacy of its laws over our parliamentary statutes, or adopting a common flag, passport or anthem. Nor does it require a member to alter its standards on non-exported goods and services.

Viewed purely as a trade pact, the CPTPP is preferable to the EU because it elevates mutual recognition over harmonisation. The essence of the CPTPP is that its members agree to refrain from certain actions that would restrict free commerce. It is perfectly possible for CPTPP members simultaneously to have ambitious trade deals with each other and with the EU – as, for example, Japan and Canada do. On services and on professional qualifications, CPTPP uses a “negative list” approach. In other words, it assumes that whatever is legal in one state is legal in all the others unless it is expressly exempted in the treaty.

It is fair to say that the CPTPP is wide rather than deep. It does not go as far as, say, the Australia–New Zealand deal, which is arguably the most advanced on the planet. But, as Australia and New Zealand demonstrate, a deeper trade deal can nestle within a broader one.

Our aim should be to negotiate a deal similar to that which Australia and New Zealand enjoy with one another – assuming that is, that our protectionists in DEFRA and the NFU will let us. We should, in other words, seek both to participate fully in the CPTPP and, under its auspices, to secure even more ambitious agreements with the countries closest to us in terms of GDP per capita and regulatory interoperability – namely, Australia, Canada, New Zealand and Singapore.

Indeed, New Zealand, Singapore and Chile – three of the world’s greatest free-traders – are currently setting the pace when it comes to digital trade. If Britain peels itself away from the wary and watchful EU, which has never been comfortable with the free-wheeling nature of the internet, and joins these Hayekian states, it is likely to end up crafting standards on digital trade that every competitive country will want to adopt.

Finally, there is a geopolitical case for membership. Donald Trump’s decision to pull out of the Pacific deal at the last minute opened the door to China which, three months ago, created a rival trade pact with Australia, Japan, New Zealand, South Korea, and all ten members of ASEAN.

My guess is that the Biden administration will want to reverse Trump’s mistake. After all, many of its leading members had been involved with putting the Trans-Pacific Partnership together in the first place under Obama. British membership of the zone, as well as being in itself a useful counterweight to Beijing’s ambitions in the region, will set the context for UK-US trade talks.

To sum up, then, our CPTPP application will boost jobs and growth, strengthen the Anglosphere, improve the prospects for a bilateral American deal, accelerate our pivot to the fastest-growing markets on Earth, and elevate Global Britain. Not bad. Not bad at all.