Britain’s essential relationships will grow in the wake of Brexit, but the EU and US will remain its principal allies, while the most promising emerging powers will pose as many problems as opportunities.
The EU
Achieving the goals laid out in the previous chapter will above all require close cooperation with the EU and its member states. The UK’s European neighbours will constitute the nearest, best-resourced and most similarly motivated group of countries when it comes to ensuring British security and prosperity. They will also be the most logical partners to help the UK pursue its global goals, given the extent of their own interests and commitments in all six areas, and given their steps (like the UK) to embed these commitments within multilateral agreements and national regulations.
Working with the EU to protect liberal democracy in and around Europe should include avoiding divergences in approach between the UK and the EU towards countries that deviate from their commitments to accountable and transparent democratic governance. For Britain to strengthen its relations with Hungary or Turkey, for example, with no regard for the ways this could undercut the policies being developed towards them by their European neighbours would not only be hypocritical; it would be counterproductive, whatever the potential near-term economic benefits for the UK. The EU remains the main upholder, inside and around Europe’s neighbourhood, of the political norms that Britain champions. If these are eroded, the UK will be less secure and less prosperous in the long term.
Similarly, the UK needs to retain close foreign policy and security cooperation with the EU if it wants to promote peace and stability in the European neighbourhood and beyond, given the EU’s economic power. The UK and the EU should continue to pursue common policy approaches to Russia, including on sanctions, and towards Ukraine and the Balkans. And the British government should avoid unnecessary divergences with the EU in its policies towards China. The UK, like continental European states, must constantly manage the tension between the economic value of links with China and the fact that it is a systemic rival on questions of security and human rights.
The UK’s European neighbours will constitute the nearest, best-resourced and most similarly motivated group of countries when it comes to ensuring British security and prosperity.
Close cooperation with the EU will be essential for the UK to achieve its other global goals. The EU27 states will be the UK’s most important partners for delivering a successful COP26 summit in Glasgow, given Italy’s co-presidency alongside the UK and the EU’s own commitment to carbon neutrality by 2050 and similar approaches to emissions trading, forest protection and the provision of financial support to developing countries for climate policy reform. The UK and Italy’s parallel presidencies, of the G7 and G20 respectively, in 2021 offer further opportunity for cooperation. The EU and its member states will also be among the UK’s closest partners in promoting norms and rules for internet governance that support individual rights, privacy protections and transparency, given the EU’s commitment to these same goals and its proven regulatory power to influence global change in the digital domain. European countries will be the UK’s closest partners in promoting the SDG agenda around Europe’s neighbourhood, given that they share concerns about instability there and are already supporting the expansion of universal health coverage and women’s economic rights. They are the UK’s peers in terms of the financial resources they put behind these objectives.
Partnership with the EU and European states will be essential if the UK’s long-standing engagement with African countries is to yield results. The EU has made Africa one of its principal regional priorities since 2017. Along with France’s interest in francophone Africa, this is due to a growing German focus on the continent following the migration crisis of 2015, and the fear that a much larger number of migrants might soon be travelling north from an unstable and environmentally degraded African continent. Assessing how the UK could join a trade partnership between the EU and the new African Continental Free Trade Area (AfCFTA) would help underpin the UK’s ongoing commercial and development investments across Africa. In the meantime, deepening bilateral security cooperation with EU partners in the Sahel – as the UK is doing with France – and in North Africa, Lebanon and Syria will be indispensable if these regions and countries are to cease being sources of instability and conflict.
The US
Despite the need for Britain to prioritize coordination with its continental European neighbours and the EU after Brexit, the US will remain the country that requires the UK’s biggest bilateral diplomatic investment. The US’s material and political support will be central to the UK’s domestic security for the foreseeable future. And relations with the US, the UK’s largest bilateral trading partner and inward investor, will be pivotal to British economic health. The fact that the differential in resources between the two countries will continue to widen over the coming decade should make little difference to the quality of the relationship – providing the UK sustains its current level of investment in international capabilities, and providing US and UK foreign policy goals remain broadly aligned.
Although the UK’s absence from EU decision-making is a diplomatic setback for the US, the UK will continue to be strategically valuable to the US in Europe because of its leading voice and presence alongside the US in NATO.
Although the UK’s absence from EU decision-making is a diplomatic setback for the US, the UK will continue to be strategically valuable to the US in Europe because of its leading voice and presence alongside the US in NATO. As the focus of US security continues to pivot inexorably towards the Asia-Pacific and an increasingly contested relationship with China, Britain’s role will be all the more important to Washington in helping deliver a more robust European capacity to deter Russian military adventurism on the eastern fringes of NATO. The US will also hope that the UK, France and Germany succeed in promoting peace and economic opportunity around the southern and eastern Mediterranean, where they and the EU bring a greater mix of economic and security incentives and threats to bear than can the US.
The UK and US will also continue to be each other’s closest allies across sensitive specialist domains that are critical to their mutual security – especially in cyber defence and offence, intelligence-gathering, nuclear non-proliferation and counterterrorism. Anglo-US cooperation on counterterrorism connects US and UK interests in Pakistan and Afghanistan – two countries that have harboured Islamist extremist plots against American and British cities and citizens – and extends into related theatres from Iraq to Somalia. Establishing a regular series of issue-specific consultations among UK and US officials, which ministers could choose to attend at appropriate moments, on issues of shared bilateral security concern and where Britain would bring specific expertise and leverage – such as security in the Gulf and approaches to international climate negotiations – would be mutually beneficial.
On the economic front, an FTA with the US would be symbolically good to conclude, but only if it could overcome sensitive obstacles, such as differences over food standards and financial services trade, without causing bilateral political ruptures. The reality is that the UK’s large and mature trading relationship with the US – accounting for some 20 per cent of British exports – already benefits from low tariffs. And the net economic value of a US–UK trade deal would be marginal at best, adding some 0.16 per cent to UK GDP over 15 years.
The Trump administration had signalled its intention to use a bilateral trade agreement as a way to prevent the UK from striking future deals with non-market economies like China; thereby building up, alongside Canada and Mexico, a network of countries committed to resisting China’s penetration of global markets. The Biden administration may prove less strident on this point. But whether a bilateral FTA proves achievable or not, both sides would benefit from negotiating agreements on regulatory convergence or equivalence in modern service sectors, such as ‘fintech’ and data management. They could also strike a bilateral investment agreement that improves access to each other’s financial and public procurement markets, and that helps address current bilateral disputes over corporate taxation.
China
The long-standing US–UK special relationship has suffered recently from divisions on how best to manage China’s rise. Whereas the threats posed by the Putin regime in Moscow tend to unite the US and the UK, China’s geographic distance means that its rise is less strategically threatening for the UK than it is for the US. China’s growing military capabilities directly challenge America’s alliance commitments and political influence across the Pacific. And China’s rise threatens to displace the US from its position of technological leadership, undermining the hegemonic influence that accompanies its position at the top of the global economic ladder. China’s rise has much less potential impact on the UK’s relative global position. To the contrary, the emergence of a vast Chinese market of middle-class consumers offers a chance for the UK to reduce its perennial trade deficit with China and find a growing outlet for Britain’s world-leading services and high-end, specialist manufacturing sectors.
One area where China’s rise clearly does threaten British interests is in its determined efforts to upend the norms that inspired the UN Universal Declaration of Human Rights, whether through Beijing’s economic bribery of countries on the UN Human Rights Council into backing its diplomatic agenda, or through its emerging position as the nucleus of a cluster of authoritarian governments that want to change cyber norms and rules to favour state surveillance. These same instincts have led the Chinese government to turn a blind eye to the environmental unsustainability and political corruption that have accompanied investments by many Chinese companies in Belt and Road Initiative projects across Asia and Africa.
The UK should pursue a circumscribed rather than open-ended economic relationship with China.
In 2019–20, deciding how to deal with Huawei became a metaphor for the British government’s dilemma in its relations with China. Deploying Huawei’s cost-effective 5G telecommunications systems could have helped accelerate the Johnson government’s economic levelling-up strategy. And, with the right oversight mechanisms and limitations on the company’s network access in place, Huawei need not have posed an insuperable threat to the integrity of the UK’s telecommunications infrastructure. But in the end, the Trump administration’s decision to block US chips and chip designs from Huawei products changed the calculus for the Johnson government. It also did Britain a favour. If the UK had continued to accept Huawei as a key provider of 5G infrastructure, the government would have been accused of hypocritically allowing a company whose technologies are integral to China’s system of state surveillance to serve as a supplier of critical communications services inside Britain’s liberal democracy.
How, then, to engage economically with China when doing so exposes these sorts of profound dichotomies between the UK’s global goals and economic interests? The first step is to recognize that a broad economic uncoupling from China would be counterproductive. It would make the post-COVID-19 recovery that much harder. China already accounts for over 15 per cent of world GDP, and it is fast becoming one of the world’s most important consumer markets.
Disconnecting China from the UK economy would also risk creating a self-fulfilling prophecy, as a more resentful but still economically powerful China pursued more autarkic economic policies at home and mercantilism across the world. Containment was a viable, correct and ultimately successful strategy against the Soviet Union, which was a military competitor to the West but not an economic one. The same option does not make sense with China. Instead, the UK response needs to focus on the negative international impacts of China’s rise as a convinced authoritarian state.
The UK should pursue a circumscribed rather than open-ended economic relationship with China. This would not prevent Britain from expanding its bilateral trade and foreign investment; the UK has long mixed caution with engagement in its economic relations with other authoritarian countries, from Russia to Saudi Arabia. But there should be limits on Chinese investment in strategic UK economic sectors: not just in communications infrastructure, but also in the acquisition of high-tech start-ups whose products or processes could have dual-use purposes or would enhance China’s surveillance capabilities, as the British government has started to recognize. One way to prevent this approach from then hardening into an economic stand-off would be for the UK and China to negotiate their own bilateral investment agreement, as the EU and China did in principle on 30 December 2020. It would set out conditions for welcoming investment and delineate the boundaries to economic integration by establishing ‘negative lists’ that stipulate which sectors are off-limits to the other party. This would bring greater clarity to investors and reduce the risk of unplanned political antagonism.
Nor should the UK abandon partnership with China on international objectives of common interest, such as reducing greenhouse gas emissions or promoting economic development in sub-Saharan Africa. But the UK government should continue to call out and confront Chinese practices and policies that undermine accountable governance in Hong Kong and in partner countries around the world. If UK governments can stand by their principles, they are likely to retain the political and public support to manage this dominant relationship effectively.
Emphasis on the Asia-Pacific
The China dilemma also demands an important shift in the UK’s strategic outlook. In the coming years, Britain should increase its focus on the Asia-Pacific region, as Foreign Secretary Dominic Raab has implied it is going to do with what he describes as a ‘tilt towards the Indo-Pacific’. But this should not just be about economic opportunity or geopolitical balancing. If the UK chooses to prioritize upholding liberal democracy around the world, then it should do so where its limited resources are most needed. One of the regions where democracies have taken root in recent decades but are now vulnerable is the Asia-Pacific. The countries clustered around China are growing economically in lockstep with their giant neighbour. But they have resisted so far becoming politically subservient to Beijing, despite their integration with China’s markets and China’s growing military presence in contested maritime areas. Nevertheless, weak institutions and fractious domestic politics are undercutting nascent democracies in Thailand and Myanmar. The likelihood of a further erosion of democratic norms and practices in the region is high, including in Indonesia, Malaysia and the Philippines. For their part, Vietnam and Cambodia show no signs of political opening.
There is a limited amount the UK can do from afar. Britain does not bring the heft that the US does to the region. But it can add critical mass to the group of democracies – such as Japan, South Korea, Australia and New Zealand – that are concerned about China’s rise but fear being caught in the middle of a new Cold War between the US and China. Britain should use a significant portion of its diplomatic and military capacity to support its allies in the region, including Singapore.
British support for the resilience of the region’s democracies in this more contentious international environment might be reciprocated by closer cooperation on their part on the UK’s other global goals.
Fortunately, supporting democracies in the Asia-Pacific has long been a strategic priority for the US, meaning the UK can play a supplementing role in regional stability, joining collective military exercises, providing military training, participating in freedom-of-navigation operations and undertaking port visits. Whether the UK becomes an important member of America’s broader Indo-Pacific strategy or not, its own Five Power Defence Arrangements reflect a long-standing commitment to the security of its allies in the region that should now be reinforced and potentially expanded – to Japan, for example.
British support for the resilience of the region’s democracies in this more contentious international environment might be reciprocated by closer cooperation on their part on the UK’s other global goals, such as promoting the SDGs and fighting climate change. By playing a proactive diplomatic role in the Asia-Pacific, the UK would also make itself a more attractive candidate to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which addresses some of the data protection and financial transparency standards that the UK is championing.
The difficult four: India, Russia, Turkey and Saudi Arabia
Developing the relationship with India, a pivotal regional democracy, as part of this shift in British strategic focus will prove a complex task. India’s importance to the UK is inescapable. As shown in Tables 3 and 4, India will be the largest country in the world by population very soon and will have the third-largest economy and defence budget at some point in this decade. It is also an English-speaking country with a large diaspora in the UK, reflecting the two countries’ deep historical linkages. As a result, India is always on the list of countries with which a new UK government commits to engage. But it should be obvious by now that the idea of a deeper relationship with India always promises more than it can deliver. The legacy of British colonial rule consistently curdles the relationship. In contrast, the US has become the most important strategic partner for India, as recent US administrations have intensified their bilateral security relations, putting the UK in the shade.
While giving India the attention it deserves, the UK government needs to accept that gaining direct national benefit from the relationship, whether economically or diplomatically, will be difficult.
At the same time, India’s complex, fragmented domestic politics have made it one of the countries most resistant to open trade and foreign investment. With average GDP per capita of still only around $2,000, India’s interests rarely align with those of smaller, more economically developed democracies. This also limits its capacity to undertake a proactive foreign policy on the global issues that matter most to the UK. For example, India shies away from joining Britain and others in supporting liberal democracy beyond its shores. To the contrary, the overt Hindu nationalism of the ruling Bharatiya Janata Party is weakening the rights of Muslims and other minority religious groups, leading to a chorus of concern that intolerant majoritarianism is replacing the vision of a secular, democratic India bequeathed by Nehru. And the government’s broader crackdown on human rights activists and civil society groups is no longer being actively challenged by the judiciary, leading to growing complaints about erosion of the rule of law, not only from domestic groups but also the UN and other democracy-watchers. While giving India the attention it deserves, the UK government needs to accept that gaining direct national benefit from the relationship, whether economically or diplomatically, will be difficult.
Russia is another of the world’s great powers, whose actions are of direct importance to the UK. Russia’s position reflects the drive and capacity of its leaders to use the country’s two principal sources of national power – abundant oil and gas and a modernized military, including world-class cyber and intelligence capabilities – to pursue their interests with disregard for international law, and scant concern for domestic opposition.
As an anchor of the liberal democratic camp and NATO, the UK is a danger to President Putin’s understanding of the Russian national interest. Whatever the logic for bilateral economic engagement or diplomatic cooperation, over containing Iran’s nuclear programme, for example, such opportunities will be overshadowed by Russia’s interest in seeing the UK become weaker over the long term. Nor is there a credible prospect of the government resetting its relations with Russia in the wake of the latter’s brazen use of Novichok, a type of nerve agent, on British soil and more recently against the opposition activist Alexei Navalny in Russia. Instead, the UK will need to support European efforts to contest the Russian government’s disinformation campaigns, financial support for illiberal parties and attempted subversion of democratic politics in Europe. It will also need to join European partners in countering Moscow’s overt or covert military threats against democracies in the region, given that such abuses have become increasingly frequent in recent years.
As an anchor of the liberal democratic camp and NATO, the UK is a danger to President Putin’s understanding of the Russian national interest.
Turkey is another country in the European neighbourhood that demands attention as the UK sets about defining its post-Brexit foreign policy goals and priorities. Turkey’s large, still youthful population and relatively low GDP per capita offer significant opportunities for growth in the next decade, providing the country’s government can deliver the right conditions. If it does, Turkey’s GDP per capita could grow from around $9,000 in 2019 to $23,000 in 2030, as shown in Table 3. Trade between Turkey and the UK stood at only £19 billion in 2019, which provides a strong incentive for the UK government to deepen economic relations post-Brexit, even though Turkey’s own access to the UK market risks being hampered by the terms of its membership of the EU customs union.
As with India, however, Turkey presents Britain with as many challenges as opportunities for partnership. Given the country’s strategic position between Europe and Asia, the Turkish leadership sees risks in the shifting balance of global power. Turkey’s role as one of the largest members of NATO is of less value when Russia no longer poses an existential threat to Europe and the US. And Turkey’s own interests in protecting its borders with Iraq and Syria, and its need for constructive relations with neighbouring Iran, often clash with those of the US and other NATO allies.
EU members have lost interest in using the lure of EU membership to help underpin Turkey’s democratization and modernization, given the growing abuses of power by President Recep Tayyip Erdoğan’s government. Turkish authorities have eroded the rule of law, stifled independent media, and imprisoned journalists and opposition political figures. This has led to a fractious and transactional relationship, disciplined only by Europe’s fears of a new wave of migrants from Turkey’s borders. Under Erdoğan, Turkey is also testing the limits of what it means to be a NATO ally, as evidenced for example in its recent purchase of a Russian air defence system. In addition, the discovery of large gas fields in the eastern Mediterranean has brought to a head Turkey’s long-standing disputes with Greece and Cyprus over the delineation of maritime boundaries. Turkey is now in the perverse situation of challenging the territorial interests of Greece, another NATO member.
The British government must avoid personalizing its bilateral relations with Turkey around President Erdoğan and should take a longer view of this important relationship.
In this context, Turkey will undoubtedly play an outsized role in the future security of Europe’s neighbourhood. This means that it should be a priority for UK diplomacy as well as for the government’s prosperity agenda. But the UK government must remember that a stronger economic relationship will be precarious, given the politicization and fragility of the Turkish economy, and contingent, given that the pursuit of closer bilateral relations could put the UK in opposition to its continental European neighbours and the US. And yet the result of the 2019 mayoral election in Istanbul – which was won by an opposition candidate, Ekrem İmamoğlu – shows a strong appetite among Turkey’s increasingly urban population for political plurality. The British government must avoid personalizing its bilateral relations with Turkey around President Erdoğan and should take a longer view of this important relationship.
Saudi Arabia presents a similarly difficult balancing act. There is a constant tension between, on the one hand, the long-standing British desire to remain influential in Riyadh and pursue economic opportunities with the largest Gulf monarchy and, on the other, the UK’s global goals. Saudi Arabia remains one of the most powerful countries in determining the future of the Middle East, which is of direct importance to British security. As much as its wealth, the country’s position as the guardian of Islam’s two holiest shrines in Mecca and Medina places Saudi Arabia at the heart of Middle East politics. Saudi Arabia will be the main regional determiner of prospects for a widespread peace between Israel and the Arab world, and for a future peace deal between Israel and the Palestinians. The kingdom will be central to any sustainable diplomatic solution to the regional challenges posed by Iran’s revolutionary leadership, which also comes under the UK’s purview as a permanent member of the UN Security Council. And recent decisions to draw down its brutal intervention in Yemen and set aside its dispute with Qatar may improve stability in the Gulf.
Saudi Arabia also matters to the UK globally. Even with an accelerating global energy transition away from fossil fuels, and a simultaneous erosion of Saudi Arabia’s geo-economic power as a result of the shale oil boom in the US, the kingdom remains one of the wealthiest states in the world, with the capacity to spend that wealth in pursuing its international interests. Sustained global demand for oil over the next two decades at least, plus the low cost of its extraction in the Gulf, means that Saudi Arabia will continue to play a swing role in managing global economic crises. It will also be pivotal to the economic prospects of middle-income and developing countries that are of interest to the UK for the foreseeable future.
In addition, Saudi Arabia plays a central role in the way in which Islamic theology is taught around the world. Having bankrolled in the past institutions from Pakistan to Indonesia that have propagated literalist interpretations of Islam and nurtured violent extremism, it is now extending internationally the deradicalization approaches it has successfully rolled out at home. This will matter to UK security interests in Pakistan, to the political evolution of Southeast Asia, and to the prospects of groups such as ISIS and Al-Qaeda continuing to recruit Salafist extremists in order to target Britain.
As with Turkey, however, Saudi Arabia stands on the opposite side of many of the UK’s global goals and values. Saudi Arabia has been obstructive in recent climate negotiations, reflecting its continued dependence on fossil fuels for its economic health. It also stands in the opposite corner on issues of human rights and support for democratic governance. Saudi Arabia is deepening its relationship with China not only economically but politically: for example, at the UN it has backed China’s right to repress its Uighur minority in Xinjiang. It opposes political reform across the Arab world as well as at home, for fear that this could enable political Islam to gain a foothold. Its economic and political governance lacks any meaningful accountability or transparency.
Britain’s relations with Saudi Arabia will struggle to paper over these contradictions. Participation in the latter’s Vision 2030 modernization programme could yield major economic returns for the UK, diversifying the bilateral economic relationship beyond energy investments and aerospace and defence exports. But, given the central role of the Saudi royal family in the kingdom’s economy, British business would need to continue turning a blind eye to the brutal ends to which Crown Prince Mohammed bin Salman and parts of the ruling elite are willing to go to sustain political power. This will prove an increasingly difficult proposition for many British companies.
