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The strategic consequences of Brexit

Giancarlo Elia Valori

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Though with a knife-edge majority, Great Britain has relinquished its economic and political relationship with the EU. Obviously account shall be taken of the many people who voted in favour of Bremain, since they will not disappear all of a sudden, but also the strategic, military and geopolitical effects of this new UK position shall be assessed.

A position which today seems to be mainly economic and commercial, but which will soon herald wider choices than the mere give-and-take between Great Britain and the European Union.

For sure the British people have never liked the European Union.

In 1975 Margaret Thatcher put strong pressures for the United Kingdom to adhere to the European Union, but the idea of the Iron Lady was to become member with a view to controlling a powerful entity, such as the EU, thus avoiding the creation of an axis between France and Germany to isolate Great Britain – as, indeed, later happened. Also from the commercial viewpoint.

Prime Minister Thatcher decided to adhere to the EU as some businessmen do with potentially dangerous companies of which they buy a significant shareholding so as to better manage them from inside.

It is worth recalling that there was still the Cold War that Great Britain was fighting with great care and intelligence wisdom.

At the time, both Prime Minister Thatcher and the other EU statesmen viewed the European bloc as an economic agreement preventing the USSR from extending its economic, if not military, influence over what the French philosopher, Raymond Aron, called “the great Central European plain.”

The plain that the Warsaw Pact planned to quickly conquer so as to reach the Atlantic and seal the UK into its North Sea.

Without Great Britain, there would be no European nuclear arsenal and the French one would fall immediately into Russian hands.

Furthermore, in her book of 2003, Statecraft: Strategies for a Changing World, Margaret Thatcher did not dismiss the possibility of Brexit as “unthinkable”, but thought that the issue had to be analyzed very carefully.

It had to be assessed in terms of strategic and commercial routes and in terms of UK influence over the EU decision- making process, as well as for assessing the balance between the euro and the pound sterling.

These are the decisive factors of the EU-UK matrix, not others.

Currently the European framework is obviously much more complex than in the 1970s.

It is not true, however, that the Union rescued Europe from the fratricidal wars which scarred it as from Napoleon I onwards. The European Civil War, as the German historian and philosopher Ernst Nolte called it.

Conversely peace in Europe was preserved by the military balance between NATO and the Warsaw Pact.

The “economic basis of the war” between Germany and France, from Alsace-Lorraine to the Ruhr region, was an old strategic concept which had already been solved with the European Coal and Steel Community (ECSC) in 1951.

Nevertheless, as from 1980 onwards, it was precisely Margaret Thatcher who put pressures on the EU to “get her money back,” by considering the agreements between the EU and the UK unnecessarily too burdensome for her country.

In her speech delivered in Bruges in 1988, the Conservative Prime Minister spoke clearly against “a European super-State exercising a new dominance from Brussels”.

This is the core of the issue: the British people have never wished to turn the economic “contract” among the European Member States into a specifically political contract. They wanted and still want to have a free hand in the global financial framework. Finally they intend to avoid the geopolitical effects of the economic and trade ties established in Brussels.

Great Britain is a State, a great nation, which needs overall global autonomy which, on the contrary, the EU manages according to covertly Franco-German interests that are potentially opposite to the UK ones.

It is not the British leaders’ perception, it is the truth and, however, in politics, perception counts as reality, if not even more.

As is in A Midsummer Night’s Dream by William Shakespeare.

With this choice, Great Britain, which still has the “imperial dominance spirit of Lawrence of Arabia” – as the former Italian President Francesco Cossiga who, however, was a close friend of Margaret Thatcher, called it – is trying to play some cards which, despite the “mists of tomorrow”, are potentially valid.

Firstly, the relationship with the United States, also at economic level, comes back to the fore.

When in 1976 the United States celebrated the bicentennial of their independence (from Great Britain, by the way), a British sailor arrived in the New York port holding a banner with the inscription: “Come back home, guys, we have forgiven you.”

Hence Great Britain still considers itself an empire – currently a British empire of finance and technology, but anyway still an empire.

With a view to becoming again “what it is” – along the lines of Friedrich Nietzsche’s journey of becoming a free spirit – Great Britain just needs to revive and revitalize its special relationship with the United States.

As early as 1958, a Mutual Defense Agreement was signed between the United States and Great Britain regarding the two nuclear arsenals while in 2010, thanks to a subsequent bilateral treaty with the United States, Great Britain had the opportunity of overcoming many of the controls and limits imposed by the Americans on its advanced defense technologies – limits imposed also on NATO members.

Great Britain is the second largest economy of the English-speaking world and the sixth largest world economy. It is the largest US trading partner and a member of the UN Security Council. It hosts the highest number of US military bases abroad and, above all, it is the global financial hub which periodically rescues US banks from their insolvency crises.

Hence it is clear that Brexit can be seen as a major US strategic success and outlines the end of the “third pole” between East and West which sometimes the EU has dreamt of being.

The dollar zone has never liked the euro. Quite the reverse, it has fought it harshly.

For the United States, the European single currency was and still is a strong competitor, as well as a threat to their role as hegemonic global financial power – an insane “Napoleon’s dream”.

Moreover, the idea of bringing the euro to an often forced parity with the US dollar has undermined EU exports, by compelling them to be carried out with a currency having a too “high” value which has restricted the end-markets.

Not to mention the many temptations generated by the euro on world commodity markets: it is true that – among many other assessments and considerations – the United States attacked Saddam Hussein for his still secret choice of trading most of his oil and petroleum products in euros.

It is also true that, in the phases characterized by great international tensions, Iran traded part of its oil and petroleum products in euros, especially on the “stock exchanges” in Kish and in the other islands of the Persian Gulf.

The Brexit effects, however, increase the volatility of the pound sterling against the dollar, with a spread of approximately 15% compared to the pre-referendum values.

Financial analysts’ imbalances which, by now, are mainly trolls, namely IT automatisms.

Certainly Great Britain will not be granted a preferential treatment by the United States in the framework of the TTIP negotiations.

US President Obama has explicitly warned that the UK would be at the “back of the queue” in any trade deal with his country if it chose to leave the EU and would have the same treatment and the same barriers to entry as countries like China, Brazil or India.

Nevertheless Barack Obama is about to leave the US Presidency and, if Donald Trump were to be the next President, he will have every interest in dividing the European competitors and favoring them against the aggressive practices of countries like China and, in the future, India.

Also Hillary Clinton cannot avoid using this leverage offered by Great Britain for the TTIP negotiations.

The British TTIP is a bet on the future which, however, the UK could win by relying on its great financial strength.

Bilateral trade between the United States and the UK is very significant: America is the first destination of UK exports and the United States are the third generator of imports for the UK, after Germany and China.

North America and Great Britain are the largest mutual foreign investors.

A situation which cannot change all of a sudden, in spite of the US discontent and dissatisfaction with Brexit.

Furthermore the British government stated that TTIP could provide to the British economy a surplus of approximately 10 billion pounds a year.

There is the need to recover much of the Brexit cost and rebuild a strategic and military relationship with the United States which the UK sees as the only bulwark against two EU and NATO structural dangers: the EU decision-making weakness in the Middle East and the explicit German polemic against the Atlantic Alliance’s anti-Russian posture, which has been mounting in recent months.

Two dangers that the UK wants to avert: the recovery of German geopolitical autonomy tending to Eurasia and the EU structural weakness faced with Middle East tensions.

In Great Britain’s mind, Germany is always the country of the old definition by Lord Ismay, who was NATO Secretary General from 1952 to 1957: “The Atlantic Alliance’s purpose is to keep the Americans in, the Russians out and the Germans down”.

Great Britain does not want the strategic and economic exchange between France and Germany, in which Germans buy French government bonds massively and, in return, are entitled to the “enhanced and extended protection” of the French military nuclear power.

Great Britain does not even want a euro which, as “a German mark in disguise”, penetrates the major British export expansion areas.

Moreover, considering the EU strategic inanity, Great Britain fears for its corridors to and fro its Asian Commonwealth.

With its operations in Crimea and Ukraine, the Russian Federation blocks and distorts the direct line between Great Britain and India, besides changing the balance of power in Central Asia, where the UK has still strong interests.

Since 2001 to date, Great Britain has deployed its military units in Afghanistan, in the framework of the US Enduring Freedom operation, not only for mere “Atlantic loyalty” as other countries (including Italy) have done, but to still afford the regional strategic viability and role which are essential for it to keep Northern India, the central Asian countries and the routes from Southern China.

Those who think globally, as the decision makers of what was once a great Empire, do not stop doing so all of a sudden.

Unfortunately the EU’s mistakes are known to everybody: an artificially overvalued currency – maybe to compete with the dollar; an insane disconnection between EU foreign and economic policy; the idea of simultaneously controlling 29 countries which are all competing one another, with different tax systems and public spending mechanisms, not to mention the autonomous and conflicting public debt securities markets.

The EU could certainly reform itself by establishing, within the ECB, a single market of government bonds, possibly managed (and not tiered and capped) with the issuance of “European debt securities”.

That Germany does not want, and with good reason.

Moreover the Union could also make the various Member States develop an export plan, with a view to analytically protecting one commodity or the other, without dangerous generalizations (even for us).

From chocolate to wine, up to the hilarious theory of the ”Polish plumber” – popularized by Philippe de Villiers as a symbol of cheap labor coming from Central Europe as a result of the Directive on Services in the Internal Market during the EU Constitution referendum in France in 2005 – in the field of exports, so far Italy has lost and has hence paid for its mistakes related to its “scarce incisiveness” in Europe.

It is worth recalling that the Polish plumber. was supposed to come and work in the EU at the same rates he charged in Krakow. However, the cost of living in this Polish town is very different from the cost of living in the center of Munich.

Abstract free-trade and liberal theories, typical of a bad macroeconomics handbook, mixed with archaic protectionism – this is exactly what the EU has often been.

Hence, following the ideas of General de Gaulle, another great “Eurosceptic”, the issue lies in returning to a Europe of Nations and States where only what is already in common is decided jointly – and it could not be otherwise…

This means European protection from asymmetric shocks, selective penetration of new foreign markets and domestic liberalization of goods and services.

The idea of making the EU be the comptroller of the Member States’ public budgets, with abstract and binding rules, paves the way for a number of exceptions which inhibit the rule, or for a covert economic struggle between EU rich and poor countries.

We have already experienced it in Greece and this could also happen in Italy and Spain.

Furthermore, the EU has insisted on implementing a common “foreign, security and defense policy”, with the obligation to “make the Member States’ civilian and military capacities available to the EU”.

Shall this be done in agreement with NATO? Where is the chain of command of this 29-Member State army? Who develops its plans and sets its goals?

All this is for stabilization, humanitarian and conflict prevention missions, disarmament or military assistance and advice.

And what is the role played by the United Nations, despite all its limits?

In short, as from a certain phase onwards, which we could identify with the 2001 crisis, the European Union has believed to be what it was not and had not been conceived and meant to be.

After all, even the old anti-Soviet dissident Vladimir Bukovsky, was not entirely wrong when, from his new English homeland, equated the European Union with his old USSR.

Hence if the EU is able to reform itself not only at organizational, but also at domestic financial level, it will be in a position to keep on selling its merchandise: protection against asymmetric shocks, a strong currency widespread in the world, as well as a free internal market.

Conversely, if it continues to pursue its Napoleon’s dream of “uniting Europe”, it will have to face “one, a hundred, a thousand Brexit” – just to paraphrase Che Guevara’s words.

Furthermore, the issue does not lie in asking – as the Italian politicians do – for “greater budget flexibility” in exchange for abstract reforms which may be suitable for the Finnish people, but not for the Flemish population.

The problem is completely different: to have the possibility of drafting autonomous budgets so as to subsequently check their effects over a period of two years, without prior diktats.

Briefly, a more modest EU will survive very well – even after Brexit.

Advisory Board Co-chair Honoris Causa Professor Giancarlo Elia Valori is an eminent Italian economist and businessman. He holds prestigious academic distinctions and national orders. Mr. Valori has lectured on international affairs and economics at the world’s leading universities such as Peking University, the Hebrew University of Jerusalem and the Yeshiva University in New York. He currently chairs “International World Group”, he is also the honorary president of Huawei Italy, economic adviser to the Chinese giant HNA Group. In 1992 he was appointed Officier de la Légion d’Honneur de la République Francaise, with this motivation: “A man who can see across borders to understand the world” and in 2002 he received the title “Honorable” of the Académie des Sciences de l’Institut de France. “

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From Russia with Love: Controversy Around the Russian Aid Campaign to Italy

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As Winston Churchill said in the mid-1940s as the end of World War II approached, “Never let a good crisis go to waste.” At the time, the British Prime Minister was presumably referring to the Yalta conference and the resulting alliance between him, Stalin, and Roosevelt, the trio that would lead to the founding of the United Nations, thus generating opportunities within a crisis. Although the statement dates back more than 70 years, it continues to be relevant even today. In recent years the Kremlin has not hesitated to make a crisis fruitful, using it to regain its position as a significant player on the global scene (i.e., Libya, Ukraine, Syria). And the global health emergency triggered by the COVID-19 pandemic is no exception.

On March 22, Italy began to receive the first Russian aid, following a telephone call between Italian Prime Minister Giuseppe Conte and Russian President Vladimir Putin. A goodwill gesture labeled “From Russia with Love” in honor of one of the most successful films in the 007 sagas. Along with the mission and medical material, however, came a military contingent led by General Sergey Kikot, head of 104 health workers and other assistance personnel.

Although welcomed with great appreciation, the reception of the Russian aid operation has raised several doubts concerning the authenticity of its objectives. In this regard, it is necessary to stress that until the beginning of April, Italy faced the crisis almost entirely on its own.

Initially, Europe and its member states revealed themselves to be reluctant to cooperate. Instead of showing solidarity towards their then most affected member state, the allied governments reacted through the closure of the borders, a move that resulted in the delay of the arrival and exchange of necessary medical equipment on European soil, thus worsening the Italian situation. The apology addressed to the peninsula by EU President Ursula Von Der Leyen is dated April 1 (“Ursula von der Leyen: Scusateci ora l’Europa è con voi”). In the letter addressed to the newspaper “La Repubblica”, the President apologized for the lack of promptness of help from the European community, calling Italy a source of inspiration in the fight against COVID-19 and stressing its importance as a member state of the European Union. Besides, in the letter, it is repeatedly stated that although the European response was initially delayed, Europe is now more united than ever in the fight against the virus. A battle that cannot be won if not together.

Faster in the solidarity response, conversely, proved to be third countries, including not only Russia, but also China, and Cuba. Pending a European response, and just when the number of casualties exceeded that of China, a series of aid from the communist giant arrived in Italy. Between 12 and 18 March, an equipe of medical experts landed in Rome and Milan along with supplies and technical support, including respirators, masks, and protective suits and dressings. Similarly, on March 26, Cuba sent a medical team consisting of 52 healthcare professionals.

While not much has been spoken about the other foreign aid, and although Italy was facing great difficulties and was in definite need of help, the arrival of the Russian contingent has caused quite a few perplexities. Questions were raised concerning the consequences of the Russian aid campaign to Italy. Did the Kremlin expect anything in return? What would be the cost to the Italian government of these disinterested contributions, and what the strategic motives behind the humanitarian mission? Alexander Baunov, senior fellow at Moscow Carnegie Center, in the article “Is the Kremlin using the crisis as an opportunity to score propaganda victories?”, pointed out how, for countries that would like to see the world order turned upside down, this pandemic presents an excellent opportunity.

Prior to discussing the underlying motives at the heart of the Russian aid campaign, it is of interest to observe how the same information has been presented by the two respective governments. While in Russia the press focused on the gratitude shown by the Italian people for the assistance received, in Italy, media appeared more critical, questioning the implications of the campaign.

More specifically, La Stampa, one of the longest-selling and oldest newspapers on the peninsula, expressed its doubts about the matter, in particular through the work of the journalist Jacopo Iacoboni. (“Nella Spedizione dei Russi in Italia, il generale che negò i gas in Siria”, “Militari di Mosca acquartierati nella foresteria dell’esercito italiano, i timori di un’“occupazione” russa in Italia” ). The correspondent voiced his perplexity over the quality of the aid received, pointing out that about 80% of the material was obsolete and not working. The usage of the Aventa-M fan model (at present, there are 150 fans of this type on Italian soil) has, in fact, been suspended in Russia after having caused the death of 6 people, between 9 and 12 of May, for catching fire. In addition, the journalist, given the large number of military presence in the contingent, expressed his fears for the security of the country’s sensitive data, depicting the aid more as a geopolitical move than as an act of solidarity.

The diatribe became more heated when Russian Defense Ministry spokesman Igor Konashankov intervened, accusing the journalist of russophobia and spreading false information.

Tensions culminated in an appeal to Russian institutions from Rome by Foreign Minister Luigi di Maio and Defense Minister Lorenzo Guerini to respect freedom of the press, including the right of criticism, defined as a fundamental value at the base of the country.

On the other hand, the Russian media decided to focus their attention on the appreciation expressed by the Italians. Alongside the news of the mission’s arrival on Italian soil, media reported flags displaying the message “Spasibo Bolshoe” (thank you very much) held by smiling Italians gazing at the camera from their balconies. “Thank you, Russia, we won’t forget” “Dear Merkel, thank you for abandoning us” these the recurrent headlines on the subject (Baltnews, RT, BBC Russia, Rya Novosty, VestyRu, TsarGrad). Among the most well-known personal expression of gratitude, it is worth mentioning the former Prime Minister Silvio Berlusconi’s private message to Putin and a video posted by the Italian singer Pupo, in which the singer tries to pronounce a few words and sings in Russian.

From the Russian media, however, the Italian response to Russian aid seems to have found more support than what appears to have actually happened. According to EUvsDISINFO weekly report – “Coronavirus: BBC challenges pro-Kremlin reporting from Italy” – Italians have been portrayed replacing European flags with Russian ones, as proof though only an isolated video was found. Another recurring narrative denounced by the EU taskforce portrays Italian citizens engaged in playing the Russian anthem from their balconies during the lockdown. However, again, only one video to confirm the statement. The video was filmed outside the UGL Workers’ Union, a section of the extreme right-wing Italian political party Casapound.

Let us now turn to the controversies surrounding the interests behind the Russian aid contingent.

Amidst the most commonly discussed assumptions, one wonders whether, as a result of the disinterested aid, Russia does not expect something in return.

A common belief is that the Kremlin, having in Italy its closest ally within the European Union, could count on its help to put pressure on Brussels to review the question of sanctions, imposed following the illegal annexation of Crimea. A strategy that had already been employed in the preceding years with regard to Italy unsuccessfully (Following a unanimous vote held in December 2019, the European Council had extended the sanctions until July 31, 2020). As alleged evidence to this would seem to be the letter dated April 27 from the Chairman of the Foreign Affairs Commission of the Russian Duma, Leonid Slutsky, forwarded to the Italian senators. The letter expressly asks for help on the issue of sanctions. In order to avoid misinterpretation, clarification was promptly provided by the President of the Foreign Commission of Palazzo Madama, the senator of the 5 Star Movement Vito Petrocelli, who stated: “The appeal of my Russian counterpart Leonid Slutsky did not concern at all the European sanctions against Moscow linked to the Ukrainian issue, but the international sanctions that prevent countries such as Iran, Syria, Venezuela, Cuba and others from adequately combating the spread of COVID-19, creating further risks of contagion for the entire planet.” The letter would, therefore, refer to the UN General Assembly decision, which rejected the Russian resolution presented on March 25, also signed, among other countries, by China, Iran, and Venezuela, to suspend the sanctions due to the current health emergency.

Although there was some controversy following the letter’s receipt, it seems, nonetheless, quite far-fetched for the Russian mission to Italy to be solely dictated by the possibility for the latter to provide help concerning the suspension of sanctions against the Kremlin.

In this regard, it is of interest to remark that during its most critical moments (WWII, Cold War), Italy has always sided against Russia. On the contrary, the most probable scenario seems to be the Kremlin’s aim to gain credit with Rome in those areas of friction where bilateral relations prevail, i.e., the energy market and the Libyan question.

Italy is the fourth Russian trade outlet after the Netherlands, China, and Germany, and the fifth source of imports. In this regard, the Italo-Russian Chamber of Commerce (CCIR), founded in 1964, is very operative, bringing together the main Italian companies operating in Russia and vice versa. Russia is also the leading supplier of energy in Italy: from the latter, it purchases oil for about 15% of imports and gas for 30% of total imports. Italy acts, therefore, as the natural bridge between Russia and the European Union. This role, among other things, is witnessed by the massive Italian presence at the International Economic Forum in St. Petersburg, which, in addition to the political presence, sees the participation of all the most significant Italian companies and their chain of small and medium enterprises. Not to mention the investments of the two major Italian banks, Intesa Sanpaolo and Unicredit. Italy and Russia live in a relationship of economic symbiosis, as evidenced by the ever-increasing commercial exchange (EUROSTAT).

Simultaneously, the ongoing instability in Libya presents several challenges for Italy. Among the broad spectrum of interests in ending the Libyan crisis, in addition to energy and security issues, the issue of migration is undoubtedly the most urgent. Indeed, the migratory flow on the Italian coast risks having a significant impact on public opinion and political developments in the country. In this regard, Russia, which is also involved in the country, would thus play a key role in the negotiations to end the conflict.

In addition to whether the bill would have been presented to Italy once the aid had ended, further concern relates to security. Due to the presence of a large military convoy, the motive behind army personnel deployment and not just medical staff was questioned. Widespread speculation was that Moscow, accessing various hospitals’ databases, was engaged in a data-mining mission. Now, that would seem more like a scenario worthy of the Cold War era. What seems more reasonable, especially given that, at the time, Russia was still one of the countries less affected by the virus, is that, in the Kremlin’s perspective, the Italian situation presented itself as an excellent opportunity to gather useful information about COVID-19 and its possible mutations.

Thus, Italy would have represented both a study opportunity to train and test the capabilities of Russian departments specializing in chemical, radiological and biological defense, as well as a chance to examine the data stored in the national health system, collecting all the information needed, in order to gain a better understanding of the virus. To suggest the hypothesis, the fact that Russian convoys, consisting among others of an entire department highly specialized in bacteriological containment operations, were located in Bergamo, Lombardy, the most affected area in Italy.

Even though some have regarded the Russian aid campaign with fear and criticism, including Josep Borrell head of the European Union’s foreign and defense policy, who warned against Chinese and Russian propaganda, the Italian government has been clear about the matter. To reiterate the Italian position and avoid further ambiguity, the foreign minister Luigi di Maio in a recent interview for the newspaper “Il Corriere Della Sera” reported that there was no new geopolitical scenario. In what he described to be a matter of “realpolitik,” he stated, “There is only one country that needs help and the other countries that are giving it.”

A few weeks after the end of the Russian mission (May 7), one wonders whether there will be any consequences on the international geopolitical scene. Nonetheless, when addressing Russia’s attempt to re-establish itself on the international stage, in Italy’s case, it appears erroneous to refer to the mission as of an attempt to penetrate new geopolitical spaces. Russian solidarity should rather be regarded as an effort to maintain a political status quo already considered favorable. From the friendship of former Prime Minister Silvio Berlusconi with Vladimir Putin, to Enrico Letta, the only EU leader at the inauguration of the Olympic Games in Sochi, to Matteo Renzi, former Prime Minister, and Matteo Salvini, leader of the right-wing party “The League”, who openly criticized the European Council for the renewal of sanctions against Russia, to an intense series of agreements and protocols of economic, political and cultural cooperation, Italo-Russian relations appear well-established.

Italy has long stood as the founding country of the EU closest to the Kremlin, and bilateral relations seem to be facilitated by the presence of shared interests based on economic cooperation (CCIR) and the lack of historical political and social issues (Siddi). Relations are determined not only by commercial interests but also by the fruitful cultural and social exchanges between the two countries. Italian institutes of culture are very operative in the Federation, as well as the Dante Alighieri Societies, particularly active in the teaching of the Italian language, along with various cultural and tourist exchange initiatives. Despite the consequences and the underlying motives behind this humanitarian mission remain hence difficult to be predicted, it is nevertheless interesting to stress that a link between the two countries already existed. And although Italy has been part of the western economic and military structure (EU and NATO founding member) since the first post-war period, positive dialogue with the Kremlin has continued and continues to evolve.

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UK’s post-covid foreign policy

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UK’s foreign policy post corona is likely to be driven by some crucial economic factors. On the one hand, it is likely to work closely with countries like US, Japan Australia and India, to reduce its dependence upon China. On the other, UK can not totally bank on the US for achieving its economic goals, given the unpredictability of US President, Donald Trump.

UK needs to look at new Free Trade Agreements (FTA’s) and also be part of arrangements, such as the Trans Pacific Partnership which enable it to diversify it’s supply chains

Important economic decisions of UK with a bearing on UK-China economic ties

UK has taken some important steps with an eye on enhancing self-sufficiency, and reducing reliance on China given the changing environment.

The Boris Johnson government has set up a committee — ‘Project Defend’ — which seeks to study UK’s economic dependence with hostile countries (with a specific thrust on China) especially for sensitive imports. Based on the findings of this report, UK will work towards relocation of pharmaceutical companies. While changing supply chains over night may not be an easy task, this is an important decision which the Boris Johnson Administration has taken.

UK’s recent decision on Huawei

The Boris Johnson Administration has also recently taken a decision to reduce Huawei’s participation in the 5G network to zero by 2023. In January 2020, Boris Johnson had given a go ahead to Huawei’s participation in the ‘non-core’ element of the 5G network, with important restrictions, as well as a 35% market share cap. This decision drew flak from a section of Conservative Party politicians, who for long have been arguing that the UK needs to be cautious with regard to close economic ties with China, since this has serious security implications. The Trump administration had also expressed is displeasure with the Boris Johnson administration. The US President and senior officials in his administration had expressed their unhappiness, saying that this decision could have an impact on security cooperation between both countries.

In the aftermath of the coronavirus pandemic, ties between UK and China have gone downhill (senior officials of the Johnson administration have criticized China for suppressing information with regard to the outbreak of the pandemic), and Johnson’s decision was driven by two factors. One increasing pressure from Conservative MP’s who had threatened to vote against the government’s decision and second the fact, that UK is keen to go ahead with an FTA with the US (there have been differences between the US and UK however on the issue of the FTA, with the US urging UK to make a choice between China and the US)

Apart from this, the recent US sanctions imposed on Huawei, have also played a role in Johnson’s decision of reducing Huawei’s participation by 2023 (the Trump administration has made it compulsory for foreign manufacturers using U.S. chipmaking equipment to obtain a license before being able to sell chips to Huawei).

D 10 network

Interestingly, the UK has also proposed, that a group of 10 countries, dubbed as D10, joins hands to provide an alternative to Huawei’s 5G network and other technologies with the aim of reducing dependence upon China. The proposed grouping should consist of US, UK, Japan, South Korea, India, New Zealand, Australia,

UK has thus taken the lead in providing an alternative. Significantly, US President Donald Trump has also stated, that he is keen to expand the G7 and include not India, South Korea but also Russia.

UK also keen to play an important role in the TPP

While on the one hand, the UK is trying to reduce its dependence upon China, by joining hands with the US and like minded countries, on the other UK is also seeking membership of the Comprehensive and Progressive Agreement for Trans Pacific Partnership (TPP) which consists of 11 members (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam).

While the idea of the TPP was proposed by former US President, Barack Obama, though the first decision taken by Trump was to withdraw from the agreement. Japan has been playing an important role in the CPTPP, given it’s strategic importance. Efforts are also being made to expand its membership, so that dependence upon China is reduced.

The UK faces numerous challenges, while on the one hand it does need to reshape the economic relationship with China, on the other hand this can not be done overnight, so enhancing FTA’s and joining the CPTPP is important in this context. 

From a purely strategic perspective, the UK-US relationship has been important and with Johnson and Trump at the helm, and increasing convergence on attitudes vis-à-vis China, this is likely to get further strengthened (though there could be differences on both economic and geo-political issues). The idea of the D10 grouping mooted by UK has also sent a clear message, that in spite of numerous economic challenges, the UK is keen to emerge as an important player, in its own right, in the post covid world order.

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What is Multilateralism in European Terms?

Dr. Andrey KORTUNOV

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The term “multilateralism” is not specifically elaborated in Russian international relations theory. For a long time, it has remained in the shadow of the much more popular term “multipolarity,” although the latter is gradually being replaced in Russian literature by the term “polycentrism.” Sometimes, it seems that “multilateralism” and “multipolarity” are used in Russian scientific and political discourse as synonyms, both reflecting the democratisation of the international system that began with the collapse of the “unipolar world” at the beginning of the century.

Yet, “multipolarity” is obviously not the same as “multilateralism.” The former denotes pluralism in the distribution of power in the international system among three or more independent decision-making centres, while the latter describes a possible way for these centres to collaborate. Without multipolarity, there can be no multilateralism, since a unipolar or bipolar system simply does not provide enough actors for multipolar interaction. But multipolarity does not necessarily imply multilateralism, since relations within a multipolar system can theoretically come down to a set of bilateral relations between individual centres of power.

In the United States, at least prior to the Trump administration, multilateralism was formally considered the preferred foreign policy practice, especially in relations with allies. For example, NATO is a multilateral military-political alliance and the North American free trade area (NAFTA, recently superseded by USMCA) is a multilateral trade and economic integration initiative. Yet, the United States has acted as the undisputed leader in all multilateral agreements, which has raised questions as to how multilateral these agreements really are. As for Donald Trump, he has expressed doubt as to whether multilateralism is an effective means for promoting American interests at all, preferring, wherever possible, to negotiate with partners in a bilateral format.

Unlike the United States, EU countries consider multilateralism not only a convenient format for foreign policy but one of its fundamental principles. This principle is embedded in many official EU documents, including the Treaty on the European Union (Article 21). The commitment to multilateralism was once again reaffirmed last spring when France and Germany announced the creation of the international Alliance for Multilateralism, already joined by about fifty countries from various regions of the world. “Multilateralism” in European political discourse is, however, often little more than a uniting slogan, representing one of the basic values of the European Union that distinguishes the EU from other global players who prefer a unilateral foreign policy (USA, Russia, China).

That is why the essay Multilateralism: Variants, Potential, Constraints and Conditions for Success, authored by one of the pillars of modern German foreign policy thought, Professor Hanns Maull, and published by the German Institute for International and Security Affairs (SWP), merits careful reading. For over twenty years, Hanns Maull has held the Foreign Policy and International Relations Chair at the University of Trier in Germany and is now a professor at the Johns Hopkins University in Bologna. Let us discuss the main points of his essay.

Interpretations of the Term

The author of the essay offers the reader three levels of understanding of multilateralism. The first level of understanding, designated by Maull as Multilateralism I, reduces this concept to diplomatic interaction between three or more states (or other actors) in international politics. This understanding does not present any difficulties or controversies: multilateralism comes down to formal issues and is contrasted to unilateral and bilateral formats. Nor does this understanding offer any substantive content: participants in the multilateral format can pursue any goals and base their cooperation on any principles that suit them. From the essay, we may conclude that, for example, the three agreements made in the second half of the 18th century between Russia, Prussia and Poland on the partition of the Polish–Lithuanian Commonwealth fall well under the definition of multilateral diplomacy, since all three parties participated in all the agreements.

Modern German foreign policy employs a broader interpretation of multilateralism, designated by the author as Multilateralism II. The essence of the German understanding is that multilateralism, in addition to formal criteria, should also include substantive criteria. Therefore, it includes interaction of more than two actors with action within the framework of international organizations, oriented towards the principles and norms and carried out in accordance with the rules and regulations that underlie those organisations (such as, for example, the United Nations Charter). In this version, a multilateral foreign policy stands not only for a specific diplomatic approach but also for a commitment to certain principles, substantive goals and methods of foreign policy. Ultimately, we are talking about a limited set of common values that do not exclude conflicts between individual participants. A possible example of Multilateralism II is probably the way European countries cooperated within the framework of the Conference on Security and Cooperation in Europe (CSCE) in the 1970s and 80s, while maintaining a mostly competitive relationship between two different social and political systems.

Historically, this understanding of multilateralism is closely connected with the concept of the Western liberal world order, the foundations of which were laid in 1945 and which began to claim universality after 1990. Yet, this does not mean that Multilateralism II must inevitably disappear along with the decaying liberal world order. It may be based on other values and principles; the main element is the creation of common norms in world politics, to be agreed in a multilateral format. In fact, multilateral mechanisms should enable us to agree on common norms and values, a universally desirable world order and regulatory practices acceptable to each individual participant in multilateral negotiations.

Multilateralism III represents a more radical understanding of the term. Whereas the main task of Multilateralism II is to achieve the broadest possible compromise on the basic issues in the regulation of international life, despite significant differences in the interests of the participants, Multilateralism III is to find “right” or “appropriate” solutions to the problems of world politics, i.e., achieve a transition to “effective global governance.” If Multilateralism II proceeds from what the participants in the system think achievable, Multilateralism III operates in terms of what is desired and what should be done. In the first case, we are talking about a tactical alliance of players with very different aspirations and, in the second case, about a strategic partnership of like-minded parties who interact with one another to achieve common goals.

Accordingly, in order to move from Multilateralism II to Multilateralism III, two complex problems must be resolved. First, tactical allies should become strategic partners, that is, agree on a general picture of a desirable future, on practical steps to make this future possible, on an equitable distribution of the burden and costs associated with this transit, etc. Second, international institutions must be established that are capable of ensuring effective coercion of independent players in the international system to implement multilaterally adopted decisions. As history shows, for example, in the case of multilateral efforts to combat climate change, even a general agreement on the principles, values and goals of cooperation does not necessarily guarantee that the international community will move towards its stated goals.

Why is a “Multilateral” Foreign Policy Necessary?

Proponents of multilateralism (any of the above variants) rely in their reasoning on three interrelated assumptions: regarding the magnitude of impending global challenges; the persistence of a trend toward power diffusion in world politics; and the great potential of multilateral cooperation.

The first assumption, according to Maull, needs no detailed justification. Some of the global challenges — from climate change and a possible environmental disaster to uncontrolled development of new technologies and the threat of a global nuclear war — call into question the continued existence of mankind. Another thing is equally obvious: many of these challenges place extremely high demands on the quality of global governance, including not only cooperation between states but also involvement of non-state players — private businesses, international organisations and civil society. Constructive co-operation, even between such large states as China and the United States, will not in itself suffice to solve the problems. Within the framework of today’s predominantly Westphalian international system, achieving a new quality of global governance does not appear feasible.

Power diffusion is likely to continue. Consolidation of the world based on a revival of a unipolar or even rigid bipolar system seems unlikely. Nation-states will remain the main players in world politics, with preservation (at least formally) of the principles of sovereignty and territorial integrity. At the same time, the number and international activity of non-state players will continue to grow, undermining the hierarchy in world politics and economics. Traditional formats of international cooperation will increasingly prove ineffective and the need for complex new multilateral and multi-level formats will grow. A multitude of multilateral schemes crop up in international relations, which could not have existed even theoretically throughout human history.

Proponents of multilateralism suggest that the transition to a new level of global governance will make it possible to use resources more efficiently, streamline strategies and priorities, avoid duplication of efforts, etc. Maull, however, entertains serious doubts about this assumption. First, transferring even some of the functions of national states to multilateral structures is already difficult since the states themselves have long become much less omnipotent on their own territory. Second, the effectiveness of existing multilateral structures — from the United Nations and the European Union to the International Monetary Fund and the World Bank — is also controversial. Global governance based on multilateralism has yet to prove its worth.

Multilateral Diplomacy: Benefits and Challenges

The obvious advantage of multilateral diplomacy, according to the author, is its inclusive nature: only multilateralism allows the broad coalitions necessary for resolving complex problems to be formed. In addition, multilateralism enhances the international legitimacy and sustainability of any agreements. Of course, this only applies to situations when the multilateral coalition is sufficiently representative, that is, when the problem is solved bearing in mind the positions and interests of all significant players.

On the other hand, it is precisely these features of multilateral diplomacy that, in some cases, turn out to be its downfall. It can be difficult to focus the agenda in multilateral negotiations, as each of the participants has its own priorities. Multilateral negotiations usually require more time and resources than bilateral ones, not to mention unilateral actions. Procedural issues are much more difficult to negotiate in a multilateral format than a bilateral one.

Decisions made following multilateral negotiations often turn out to be half-hearted, fuzzy and declarative, as negotiators focus on the search for the “lowest common denominator,” allowing them to keep the support of the maximum number of contracting parties. Multilateral negotiations can be blocked by any of the participants. There is an inverse proportion between legitimacy and effectiveness: high legitimacy is achieved at the cost of low effectiveness and vice versa. The same correlation usually applies to the time needed to reach an agreement and its stability: agreements concluded in a scramble are generally less stable and reliable than ones resulting from lengthy negotiations.

As a general rule, we can conclude that multilateral and representative formats have no alternative when it comes to fundamental systemic problems in world politics or economics. Even so, when it comes to the need to respond quickly to a sudden challenge, the actions of small groups of players who are more interested in solving the problem may be more effective. Of course, you have to pay with a part of legitimacy for efficiency and effectiveness.

There are many other problems and difficulties associated with multilateralism. For example, it is not entirely clear how to distribute the responsibilities and burdens associated with implementing an agreement “fairly” among all the participants in multilateral negotiations. The question of what measures should be taken with respect to those who take a selective approach to multilateral agreements or even sabotage their implementation is also not a simple one.

In multilateral negotiations, mutual confidence between participants is more critical than in bilateral negotiations because there is always a fear that groups of participants might coordinate their negotiating positions behind the scenes so that the others will have to face a consolidated opposition promoting unilateral interests in a coordinated manner. Digressing for a moment from the discussion of Maull’s essay, we may note that it was precisely such a problem that arose in the work of the Russia–NATO Council, established at the NATO–Russia Summit in Rome in May 2002. The Russian side proceeded from the Council becoming a fully-fledged multilateral organisation with each participant acting in its individual capacity. Western countries turned the Council into a mechanism for bilateral cooperation between NATO and Russia, de facto abandoning the principle of multilateralism. A similar situation arose over time in the Group of Eight, after it was joined by Russia. On many fundamental issues, Moscow was forced to confront a combined coalition of the other seven members of the G8. The transformation of a formally multilateral format into a virtually bilateral one significantly reduced the effectiveness of the two negotiation platforms, both for Russia and, ultimately, for its Western partners.

Conditions for Effective Multilateralism

Given the above problems, we can formulate several conditions that might allow multilateral negotiation to be successful. These conditions relate mainly to the approaches and expectations of negotiators. First, participants should be interested in achieving sustainable results, not winning a diplomatic “victory” over partners by securing tactical advantages. A diplomatic “victory” of this kind could undermine the agreement at some point and turn it into a defeat.

Second, participants must be orientated on compromise, including a willingness to make concessions. Practice shows that violation of a reasonable balance between concessions by the parties inevitably undermines the stability of the agreement.

Third, negotiators should proceed from the principle of “diffuse reciprocity,” that is, be prepared to demonstrate solidarity with partners in difficult situations, sacrificing their immediate interests for the sake of longer-term gain, if necessary.

Fourth, negotiators must have “internal legitimacy”, that is, be able to make commitments on behalf of those they represent. This means that only strong leaders with broad political support in their own countries can be successful negotiators.

Fifth, implementation mechanisms should be identified from the outset. If these conditions are not met, multilateral negotiations will prove useless at best and harmful at worst, acting as a smokescreen masking the unilateral actions of certain players.

The author emphasises that the success of multilateral diplomacy paradoxically depends on the willingness of participants to make unilateral and bilateral steps. Practice shows that, behind any success of multilateral efforts, there is always a leader or group of leaders who take the initiative in determining the agenda, prioritising its issues and maintaining the negotiation schedules, as well as acting as mediators in reaching a compromise. The multilateral format does not cancel out and will not replace the bilateral format but it is a necessary addition to or prerequisite for the latter. An example of such a combination is the bilateral German–French negotiations on creating the Alliance for Multilateralism.

Alliance for Multilateralism

The Alliance for Multilateralism, as an informal association of countries promoting multilateral approaches to resolving international problems, remains a flagship foreign policy project of Germany. Although this initiative has a very brief history, its work allows us to draw some conclusions about the possibilities and limitations of Multilateralism in world politics.

First of all, the initial meeting of interested countries was held on the sidelines of the UN General Assembly in New York in September 2019 by seven states: Germany, France, Canada, Mexico, Chile, Ghana and Singapore. These countries are very different in size, economic development and political systems. For example, according to the Freedom House classification, Mexico and Singapore are among the “partly free” countries. So we may conclude that the desire for multilateralism (perhaps even in the format of Multilateralism II) is not a feature inherent exclusively in liberal democracies.

In addition, the first practical steps made by the Alliance confirm the assumption that multilateral structures tend to focus on relatively uncontroversial, technical issues, where there is more chance of developing a common position. One such issue was the Alliance’s proposal to ban lethal autonomous weapons systems (even though the countries most actively working on such systems did not participate in the Alliance). More complex issues, such as freedom of trade, the future of international law and international organisations, human rights, etc., were left on the periphery of the Alliance’s attention. We should add that most of the decisions taken by the Alliance are to be implemented by the interested players on a voluntary basis.

Such a choice of priorities raises the fundamental question of whether the transition to a new level of global governance can go from bottom to top — from specific, depoliticised and relatively simple issues to more complex, sensitive and politically loaded problems, or whether it should go from top to bottom — from general, politically determined, fundamental problems to technical details. If we assume that a bottom-up transition is feasible, the Alliance’s work should be welcomed and supported in every way. If the only possible transition is top-down, then the Alliance’s work may even be counterproductive because it creates the illusion of moving forward where, in fact, no progress is being made. Replacing strict international legal rules with voluntarily assumed obligations, for all its attractiveness, can erode the foundations of the modern world order without creating any effective alternative.

It Is Not That Simple

The essay by Hanns Maull leaves us with the feeling that only the very first steps have been taken so far in studying the complex problems of multilateralism and the number of questions that arise significantly exceeds the number of available answers. In any case, it seems obvious that multilateralism (just like, for example, multipolarity or polycentricism) can in no sense be considered a universal mechanism for resolving all international problems. The multilateral format, as the author rightly notes, has many significant drawbacks: it is cumbersome, complex, slow and often has disappointing results. Multilateralism cannot and will not replace the bilateral approach and unilateral foreign policy actions.

Even so, one may agree with the author that multilateralism has its obvious comparative advantages. It would be a mistake to ignore or downplay such features of multilateralism as democratism, representativeness and the legitimacy and sustainability of the results of multilateral negotiations. Multilateralism is a chance for relatively weak players to make their voices heard and their interests taken into account. It is also an opportunity for relatively strong players to make their leadership more civilised, less burdensome and less intrusive for all other participants in the international scene.

Ultimately, however, multilateralism, like any other format of diplomatic activity, will always be as effective or ineffective as the players who practice them want. So far, most of these players are guided by an understanding of multilateralism somewhere between Multilateralism II and Multilateralism I, gradually sliding from the first to the second. Reversing this negative trend to start moving towards Multilateralism III will require tremendous efforts.

From our partner RIAC

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