Stephen Booth is Head of the Britain in the World Project at Policy Exchange.
The narrative of the Conservative Party Conference has been dominated by domestic political and economic turmoil. However, foreign affairs do not stop for domestic politics and there are a significant number of items in Global Britain’s in-tray for the new Government to grapple with.
The Integrated Review of security, defence, development and foreign policy published in March 2021 recognised the growing strategic significance of the Indo-Pacific and introduced the “tilt”. While the Integrated Review also discussed the central importance of the Euro-Atlantic Region to UK interests, it was published well before Vladimir Putin’s brutal invasion of Ukraine dramatically altered the geopolitical landscape in Europe. The Prime Minister has therefore undertaken to update the Review in response.
As the Defence Secretary, Ben Wallace, made clear at a Policy Exchange fringe event at conference, this Government does not consider greater UK engagement in Europe and the Indo-Pacific to be an either/or choice. However, such a role needs to be paid for. “If I want to be in two places at once, the defence budget of the United Kingdom has to grow. It simply can’t pretend it can do two things for the price of one,” he said. In her conference speech, the Prime Minister reiterated her commitment that the UK will increase defence spending to 3 per cent of GDP by 2030. With the public finances under pressure, savings will have to come from elsewhere if that target is to be met.
Meanwhile, after 45 years of outsourcing its trade policy to Brussels, the UK has successfully built the capacity within the Department for International Trade to negotiate agreements with several partners simultaneously. Many said it could not be done, but the UK replaced virtually all the 60 or so trade agreements built up during its EU membership. In addition, the UK broke new ground with Japan on digital services and has concluded negotiations to reach entirely new trade agreements with Australia and New Zealand.
However, that was the relatively easy bit. Though logistically challenging, replacing EU trade agreements was largely a matter of preserving the status quo, which suited all parties involved.
UK deals with Australia and New Zealand faced resistance from some in the UK farming lobby but these agreements are not generally politically contentious, since they are countries with similar legal systems, deep cultural links, relatively smaller markets, and comparable levels of GDP per capita.
Other trade negotiations will be more challenging. Boris Johnson and India’s Prime Minister, Narendra Modi, previously set a deadline of Diwali in later October to conclude talks on a UK-India deal. The new International Trade Secretary, Kemi Badenoch, told another Policy Exchange fringe that the UK was still working towards that date but added that, “I am not in a rush to sign any trade deal. As we used to say, ‘no deal is better than a bad deal’.”
It will not be easy because there are far more barriers to address, and the economies are at different stages of development. This will require the government to make trade-offs and some export sectors will be happier with the outcome than others. This is the reality of complex trade negotiations.
However, there are grounds for optimism. While India has traditionally been reluctant to conclude trade agreements, it recently concluded an agreement with Australia. The deal is not entirely comprehensive, but India agreed to immediately eliminate tariffs on 85 per cent of its imports from Australia.
Badenoch also stressed that, while trade deals are important, they are not in themselves a metric of success. “Trade deals are like the motorway. It is fantastic when you get them built. But if cars aren’t going back and forth, then you might as well not have built them. The going back and forth are the exports and investments,” she noted.
Last month, the Prime Minister acknowledged that a trade agreement with the US is not a short-term prospect. This has little to do with UK-US relations and more to do with President Joe Biden’s reluctance to enter trade negotiations with anyone. A US deal would be nice to have, but the US is already by far the UK’s largest individual trade partner – underlining Badenoch’s point that trade is about more than trade deals.
The India deal and UK accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) remain important strategic objectives. But now is the time for the Government to also concentrate on the less glamorous work of supporting businesses, particularly smaller firms not used to trading internationally, to exploit the trade and investment opportunities these deals offer.
Meanwhile, the events in Ukraine and the consequent energy crisis highlight the need and the opportunity to develop a post-Brexit, post-EU European policy. Today, the Prime Minister is travelling to Prague for the inaugural meeting of the “European Political Community”, the concept originally conceived by Emmanuel Macron.
Participating countries have agreed to alternate meetings in countries inside and outside the EU every six months – and the UK has reportedly offered to host a second meeting. As I noted in a previous column, if the UK is able to shape it, such a forum could be valuable for discussing issues, such as intergovernmental cooperation on energy security and migration, where the agenda cannot be set on the EU’s terms and non-EU states have a significant stake in cooperation. It could help to put the UK-EU relationship in the appropriate broader geopolitical context, which would better reflect the UK’s outsized contribution to European security. It therefore deserves a chance.
Developing the symbols of a Global Britain in the wake of Brexit – the trade deals, the AUKUS deal as part of the Indo-Pacific tilt, and disentangling the UK from the Brussels architecture – has been a valuable and important task. Now the challenge is to make them work in practice.