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.