CONVERTING TRADE INTO POWER – The European Single Market at 30

Reflections on Europe Day 2023

by George I. H. Cooke

 

The impact of trade on countries that engage in it heavily internationally, and the overall effect it is having on international relations as a whole, continues to baffle. European historian, Norman Davis, points out that “Western Europe’s greatest success story lay in the realm of economic performance. The speed and the scale of economic resurgence after 1948 was unprecedented in European history, and unmatched in any part of the world except Japan. It was so unexpected and spectacular that historians cannot easily agree on its causes. It is far more easily described than explained.”

Herein lies the crucial argument for trade and its intensification, which the European Union, as the foremost model of integration, has been able to achieve. As the Union marks three decades since the establishment of the Single Market, it is prudent to reflect upon that which has been achieved individually by countries, and collectively by the region.

Geared towards facilitating the free flow of goods, services, people and capital, the depth of integration was first envisioned in 1957 through the Treaty of Rome. Considered to be well ahead of its time, the Treaty proposed the reduction of customs duties, establishment of a customs union, creation of a common market, as well as common transport and agricultural policies, and even envisaged the setting up of the European Commission, which is one of the most unique institutions in multilateral bodies.

It was the signing of the Maastricht Treaty on 7 February 1992, that led to the establishment of the Single Market on 1 January 1993 bringing together 12 EU countries, notably, Belgium, Denmark, Germany, Ireland, Greece, Spain, France, Italy, Luxembourg, the Netherlands, Portugal and the United Kingdom. With the expansion of the Union, the Single Market now comprises of the 27 EU Member States and also includes Iceland, Liechtenstein, and Norway, while Switzerland has a degree of involvement as well.

The European Commission highlights that the Single Market has been able to make three distinct shifts - ‘accelerating the transition to a greener and more digital economy; guaranteeing high safety and leading global technological standards; and responding to recent crises with unprecedented speed and determination” – but from an analytical point of view, it has made the European Union one of the strongest trading blocs, and boosted its currency globally. This translates to power on the world stage, that many other regions which have attempted integrating can only aspire to, and are yet to realise.

While the deepened integration might be questioned against the backdrop of the exit of the United Kingdom, it needs to be examined for the progress and impact made over the last three decades. Greece, is probably the EU member that has faced the most trying of financial times in recent years, hence the Greek Foreign Ministry’s assertation that “the seamless operation of the Single Market is a precondition for a strong economy that will benefit all Member States, citizens and businesses and that will meet the conditions of global competition,” is testimony to its resolute commitment to the Single Market. In contrast, Germany, seen as the foremost and strongest economy in the Union, has benefited immensely from the Market. The Bertelsmann Foundation notes that “Germany benefited most in absolute terms from the single market, earning an extra 86 billion euros ($96 billion) a year because of it.”

At first glance it appears that all countries are benefitting from the Single Market, but it is important to note that the advantages accrued vary from one member state to another, and is largely dependent on their size, economy and strength. There is relative gain with Germany for example gaining tremendously, and Greece gaining relatively less, but gaining nonetheless.

Arguments on the contrary claim that the Single Market remains an illusion, which is yet an ‘ongoing project’ despite its many decades of implementation. Fredrik Erixon and Rositsa Georgieva of The Five Freedoms Project, claim that “While the nature and profile of the Single Market, and its regulations, have changed over the years, they often have focused on the wrong issues, or on factors that would not change the nature of markets as such.” This observation relates specifically to the Services sector, with their further claim that “The piecemeal approach to reform, followed until now, has created a complex web of regulations, administrative rules, national discretion, and partial freedoms. Fractional and incomplete liberalization have reduced the potential gains.”

Similarly, highlighting the legal obstacles to implementation, Copenhagen Economics, points out that “the functioning of the Single Market is a shared responsibility between the EU and the Member States. Differences in interpretation and application of EU law are inevitable. Despite years of hard work and substantial real progress, we appear to be some distance from having a well-functioning Single Market, free from unjustified or inappropriate obstacles to free movement.”

Although three decades might not have yielded a completely consolidated system it does however indicate much progress that is yet to be achieved by other regional groupings. The EU Commissioner for Internal Market, Thierry Breton argues that the Single Market is “much more than just a legal framework – or indeed a market. We need to continuously preserve, improve and re-invent this formidable asset.” Breton calls for three crucial measures to ensure that progress. He notes that “first, by ensuring that the rules we have agreed collectively are also applied collectively. Second, by putting SMEs at the centre of Europe’s competitiveness. Third, by ensuring that people and businesses have access to the goods and services they need, when they need them.”

While Breton’s assertion contributes to the concept of the Single Market being an ‘ongoing project’ it indicates the need for collective action for any progress across the grouping. This collective action might not always be forthcoming owing to domestic developments as seen with Brexit, and its impact on the region in particular, and regionalism in general. While Brexit delayed deeper integration, it also raised the question over the amount of integration. However, the United Kingdom had first raised concerns about the European model two years after joining in the mid-1970s. Therefore, the example of the Brexit needs to be examined in different light. Of relevance however, is continuous call for collective action. If Member States pull in different directions, or differ largely over policy and its implementation, the model is on rocky ground.

Yet the acceleration of economic development across the region, the enhancement of trade, and the removal of barriers, has led to the Single Market remaining a firm foundation upon which countries are able to build solid cooperative mechanisms. The Single Market also causes a return to the basic understanding that those who trade are less likely to engage in conflict.

A decade ago, the Stanford Graduate School of Business focused on the research of Matthew O. Jackson and Stephen Nei, who suggested that “military alliances alone aren’t enough to stop nations from attacking one another, and also that the addition of multilateral economic trade creates a more stable, peaceful world.” In their paper on Networks of Military Alliances, War and International Trade, Jackson and Nei observed that “once you bring in trade, you see network structures densify…trade motives are essential to avoiding wars and sustaining stable networks.”

Member States of the European Union embarked on an ambitious programme of integration after the Second World War with trade remaining at the centre, but these members did not sacrifice defence either, and many are Members of the North Atlantic Treaty Organization (NATO). Thus, military alliances have not been completely forgotten or sidelined, but have been nurtured too, and especially so in the last three decades. After the collapse of the Soviet Union and the end of the Cold War, NATO evolved, and this evolution is attributed to Member States taking concrete action to ensure their preparedness if and when required.

While Europe has been able to avoid war among its constituent, yet sovereign entities, it is today grappling with war on its border as Ukraine and Russia continue to engage violently. However, NATO not activating a no-fly zone over Ukraine despite demands for the same from Ukraine, has probably been the saving factor that has ensured that war has not spilt over into Europe, and in fact the entire world.

The collective military might, coupled with the trade prowess, has given the European Union a higher degree of power. Three decades after the Single Market came into operation it is relevant to question whether trade ensured the inclusion of power into the equation, especially in light of the strength of the currency of the EU, and its financial markets. A currency of several European member states used by approximately 340 million people daily, is today the second most widely used currency globally, with 60 partner countries or territories also using the currency in some form.

The 69^th plenary meeting of the Conference of Parliamentary Committees for Union Affairs (COSAC) is due to convene in Sweden next week. A background note for the session on the Single Market has been circulated prior to the meeting. It claims that “Over the last three decades, the single market has promoted healthy competition and created strong economies and industries across the continent. The removal of barriers for goods, services, capital and people has given us both better companies and more thriving countries, and has provided consumers with higher quality products at better prices. The single market also makes it easier to travel, study, work, live and retire in other member states…. The single market also contributes to the Union’s unique peace project as it has generated increased trade, closer contacts and greater mobility within the Union.”

Trade transposed a region that fought two world wars in the short span of two decades, and has managed to remain relatively peaceful and devoid of conflict for over seven decades. It is granted that challenges remain deeply entrenched, and much doubt is raised over collective action, but it is also true that the European model of integration remains unique and in a league of its own, well ahead of the rest. Davies’ claim remains accurate as the progress “is far more easily described than explained.”

 

 

RUSSIA OVERSHADOWS G7 2022 SUMMIT

GUEST COMMENTARY by Banura Nandathilake

Despite being an informal collective of ‘advanced economic’ liberal democratic states, the Group of 7 (G7) bringing together Canada, France, Germany, Italy, Japan and the United Kingdom and the United States have fervent goals. Held from 26 to 28 June 2022, the summit was in response to a global society capsized by division and shocks, as a call to unite and join to defend ‘universal human rights and democratic values, the rules-based multilateral order, and the resilience of democratic societies’ (G7, 2022). The viability of such remains to be seen.

Formed in 1975, leading states in a world of global economic recession induced by the OPEC oil embargo understood it may be in their mutual interest to coordinate on macroeconomic interdependencies. While it was first a forum for Finance ministers to hold annual meetings, the G7 developed into a round-table between leaders of the Western World. In 1988, Russia joined the G7, which was then named the G8 albeit temporarily until Russia’s dismissal for its annexation of Crimea from Ukraine.

The G7 states in the contemporary, with an aggregate that represents 45 percent of the global economy in nominal terms and 10% of the world’s population, hold annual summits to coordinate economic policy goals, facilitate collective action on transnational issues and propagate neo liberal norms, in conjunction with the European Union and other invitees. All 7 member states are identified as mature and advanced democracies with a Human Development Index score of 0.800 or higher.

Unlike international organisations and groups such as NATO, the G7 group has no formal legal existence, no permanent secretariat or official members. It thus has no legally binding rules that abide by or ratify states to uphold decisions and commitments made at G7 meetings. As such, while compliance with G7 norms is procedurally voluntary, they are impacted by social norms of persuasion, influence, mutual accountability and reputation. Topics of conversation between member states have encompassed growing challenges such as counterterrorism, development, education, health, human rights and climate change.

The 2022 Summit

From 26-28 June 2022, the leaders of G7 States met in Elmau, Germany joined by the leaders of Argentina, India, Indonesia, Senegal and South Africa, as well as Ukraine. Representatives included German Chancellor Olaf Scholz, Italian Prime Minister Mario Draghi, US President Joe Biden, British Prime Minister Boris Johnson, Canadian Prime Minister Justin Trudeau, Japanese Prime Minister Fumio Kishida, French President Emmanuel Macron, European Council President Charles Michel and European Commission President Ursula von der Leyen,

The summit focused on the Covid-19 crisis, climate change, the Russian Ukrainian conflict, and China. 

Climate Change

The shared concerns of climate change were a major topic of discussion during the 2022 Summit. The group endorsed the goals of an open and cooperative international Climate Club, in alignment with the 1.5°C pathways and hastened the implementation of the Paris agreement. The group further pledged to commit to a decarbonised transportation sector by 2030, a fully or predominantly decarbonised power sector by 2035. However, the latter may have been incentivised by political concerns of Western states to a major degree.

Liberal Democracies of the West

Liberal democracies may be understood to exist where the state subscribes to a liberal economic system and a democratic political system. A concise summary of such is as a liberal economic system proscribes significant political control over an decentralised, capitalistic, market driven economic system, as it is understood that the market mechanism is the most efficient means of linking demand to supply, market to consumer. A democracy may be understood as a domestic political model which, in conjunction with an impartial judiciary, free media and others, elected representatives aim to promote a decentralised representative governance through accountable, transparent and inclusive institutions.

By virtue of being a liberal democracy, all member states find common ground, parallel norms, alignment of macro foreign policy goals and understanding with each other. This allows the informal G7 to coordinate hard power security and economic interdependence in addition to cooperating with civil society groups to promote human rights, and uphold a democratic zone of peace in the face of non-democratic powers. A strong culture of mutual accountability exists between G7 states. Accountability may be through internal processors of the forum, where social norms allow for persuasion and disincentivize coercion. Coercion may not at all be necessary, as liberal democratic states would all be of a positive sum world view. Furthermore, the level of trade interdependence between states would act as means of checks and balances, as every state is needed by the other, thus it is in every G7 state’s interest to be in their good books.

The Illiberal Rest

Russia and China, in addition to states such as Iran, Saudi Arabia and Venezuela are understood by the West to be illiberal states. Both major powers, albeit one a receding power, have capitalist and liberal economic systems where the state’s political machine exerts a heavy pressure on the market mechanism. While the state may be able to provide a higher quality safety net to its citizens by restraining the destructive forces of capitalism to better allocate scarce resources amongst the vulnerable, significant barriers to such exist. China’s GDP has grown at a surprising rate vis a vis other developing states, which has allowed the CCP significant geopolitical leverage. However, China’s domestic political model is authoritarian, whereby citizens do not have much say in how they are governed. Exclusive political institutions have no means of accountability or transparency, which leads to significant corruption. As Wedeman (2004) analyses, corruption is a feature of the Chinese system, thereby stifling economic and social growth. Corruption and lack of domestic checks and balances to those in power may be more apparent in Russia than China, where the control of the Kremlin and the Oligarchs have poignant effects on not just its citizens but also its neighbours; as the lack of domestic accountability may mean the lack of stringent checks balances, which then mean lesser shackles on the zero-sum ambitions.

Russia-Ukraine Conflict

The Russia-Ukraine conflict may be interpreted as a conflict between the forces of liberal democratic values of positive peace, pluralism and self-determination versus a one man’s nostalgic dreams of a ‘Neo’ USSR. Being at complete odds, the reaffirmed condemnation of Russia’s ‘’illegal and unjustifiable war of aggression against Ukraine’’ by the liberal democratic G7 states is hardly a surprise. Nor is their promise of ‘’needed financial, humanitarian, military, and diplomatic support’’ for Ukraine in its defence of its sovereignty, during its path on a free and democratic society.

The Sanctions Regime

Sanctions and more sanctions were promised by the group of seven advanced economies, who vowed to “align and expand targeted sanctions to further restrict Russia’’ in its access to key technological industrial imports and services. Such a move would severely restrict the ability to sustain their war machine thereby adhering to security commitments to Ukraine. The G7 Leaders pledged new sanctions on Russians who had committed war crimes in Ukraine, and are contributing to exacerbating “global food insecurity” by “stealing and exporting Ukrainian grain”. New penalties on Russian gold exports were further proposed, as well as a cap on the oil price to phase out global dependency on Russian energy.

However, a complete restriction of the import of Russian energy may be an ambitious task. European nations such as France get a quarter of their oil and 40% of their gas from Russia. While Germany has halted the progress of the controversial Nord Stream 2 pipeline, the EU has currently agreed to reduce its Russian gas imports by only two-thirds. President Biden however is banning all Russian oil and gas imports to the US, and the UK is ready to phase out Russian oil by the end of the year. The US, UK and Ukrainian Leaders are keen for other G7 nations to follow suit.

Ukraine's President Volodymyr Zelenskyy, who joined in on a trio of meetings via Videolink, stated that the summit will show "who is our friend, who is our partner and who sold us out and betrayed us". He reiterated his calls for fresh deliveries of weaponry, as he believes Russia will want to extend the war until winter wherein they could make new territorial gains to consolidate power. The financial support of G7 allies in 2022 already amounts to more than USD 2.8 billion in humanitarian aid, and a further USD 29.5 billion is pledged in supporting Ukrainian reconstruction.

China and the BRI

A growing China poses a “threefold threat” to G7 countries — economically, ideologically, and geopolitically. China’s GDP is second only to the US and it is fast catching up. China’s growing state-overseen tech industry, fuelled by globalisation and interdependence, is fast spreading a culture of surveillance and censorship, which act as means for the globalisation of authoritarianism. Said authoritarian ideals are further spread through Chinese geopolitical projects and alliances such as the BRI, which usually focus on developing, quasi democratic states with little to no accountability such as those in Africa and Central Asia. Furthermore, China’s action with regard to the Uyghurs in the Xinjiang region and its influence in Hong Kong have drawn condemnation from G7 members. China’s growing trade and defence ties with Russia have also caused concerns.

A Western Counter to the BRI

A Western counter to the BRI emerged during the G7 summit, aptly named Partnership for Global Infrastructure and Investment. The BRI is a global infrastructure development strategy which was developed as per Chinese leader Xi Jinping's vision in 2013, as a means for China to assume a greater role in global politics by easing access to China and its capabilities and boosting global GDP. Dubbed the Belt and Road Initiative and with over 145 countries signed up, the BRI is currently constructing a network of overland routes, rail transportation, sea lanes and energy pipelines to connect China to Southeast Asia, Central and South Asia, the Middle East, Europe and Africa. However, the project has been criticised as a tool to increase China’s political leverage in developing countries. Thereby, the BRI has been criticised for neocolonialism, economic imperialism.

In such a context, the G7 had launched a $600bn Build Back Better World (B3W) initiative infrastructure plan to counter China, in private and public funds to finance infrastructure in developing low and middle-income countries over five years. By working to narrow the global investment gap, the B3W would create new Just Energy Transition Partnerships with Indonesia, India, Senegal and Vietnam, building on existing partnerships with South Africa.

While US President Biden understood that “Developing countries often lack the essential infrastructure to help navigate global shocks (thus) feel the impacts … and they have a harder time recovering,” he stressed that the B3W “isn’t aid or charity. It’s an investment that will deliver returns for everyone”. Despite being dwarfed in comparison to the multi-trillion-dollar BRI, the B3W offers means of accountability, transparency and mutual trust between the neo liberal developed states and the developing states. The initiative would, according to Biden, further allow developing states to “see the concrete benefits of partnering with democracies”. While a cynic may argue that the developed have no interest in the developing other than exploitation and/or self-interest, and such may be observed to be true, President Biden may have been right when he said that underdevelopment is “not just a humanitarian concern, but an economic and a security concern for all”.

Mutual gains depend on interdependence, and without developing countries, there cannot be any sustainable recovery of the world economy. However, the development of low-income states is necessary but insufficient for a holistic global economic recovery, which remains shadowed by the conflict of value systems: liberal and illiberal, democratic and authoritarian.

 

EUROPE DAY: HOW REGIONALISM TRANSFORMED EUROPE

 70^th anniversary of the Treaty of Paris

By George I. H. Cooke

Whilst Europe Day is marked across the European Union on 9^th May each year in marking the anniversary of the Schuman Declaration, in which a former French Foreign Minister articulated the need for political cooperation across Europe to make war unthinkable, it is the steps taken thereafter and in particular the Treaty of Paris on 1951 that deserves due emphasis.

Considered to be the deepest form of integration experienced in modern world, the European Union has member States who have pooled resources, personnel, services and even sovereignty to emerge as a formidable force on the global stage. In April 1951, France, Italy, West Germany and the three Benelux countries, Belgium, Luxembourg and the Netherlands took a bold step of signing a treaty which came to be known as the Treaty of Paris. Establishing the European Coal and Steel Community, the measures taken seventy years ago have borne fruit over the decades since then.

Whilst the treaty was expected to ensure stability in Western Europe as the Cold War had commenced and the rapid division of the world was taking place, the significant aspect of the Treaty was that countries were pooling their most important resources through this agreement in a bid to consolidate their positions, collectively. Seen as the precursor to the current day European Union, the Treaty of Paris was a harbinger of its time as it provided an example of integration, collective action and a sharing of resources which would ultimately benefit the signatories. The advantageous situation would then spread across the rest of the region too, and lead to the EU of today.

The treaty which came into force on 23^rd July 1952 and would end half a century later in 2002 revolutionized trade and regionalism, as it aimed to organize the free movement of coal and steel and more critically it opened access to resources of production.  Through the Treaty these countries witnessed the established of a common High Authority which was geared towards supervising the market, monitoring compliance with competition rules and also ensuring price transparency.

Given the animosity, destruction and tension that the Second World War had spawned the efforts made to collaborate at this juncture were laudable as the common market that was being created would give rise to economic expansion, generate employment and improve living standards, all of which was in a debilitated state following the travails of conflict that had been witnessed in the preceding years. Interestingly the Treaty ensured fair and equal access to the sources of production, and guaranteed prices whilst improving working conditions.

Institutionalization of the Treaty

The Treaty led to the creation of a series of institutions including a High Authority, an Assembly, a Council of Ministers and a Court of Justice, all of which ensured the implementation of the Treaty and adherence to that which had been pledged by member States. The High Authority, which is today’s European Commission was independent. This is the unique characteristic of even the Commission today where Commissioners though coming from countries across the EU, sit as Europeans as opposed to natives of their respective countries. This allows for decision making that is beneficial for the entirety of the Union. The lesson that could be derived from the European Commission is that in a regional grouping while the voices of all member States are relevant and crucial, it is the objective of ensuring that action is taken to promote the integration of the whole that matters the most. The model of the European Commission is the only one of its kind in existence today and is worthy of emulation given its reflection of the views of the whole, rather than its parts. This is where true synergy is harnessed.

Seven decades ago when the High Authority was established it became a supranational entity tasked with supervising the modernization and improvement of production, ensuring the supply of products under identical conditions, developing a common export policy and, from a labour perspective, was entrusted with the mandate of improving the working conditions in the coal and steel industries.  To ensure clarity of purpose and efficiency of service the Treaty also saw the creation of a Consultative Committee which comprised the key stakeholders in the Coal and Steel industry, notably the producers, workers, consumers and dealers, who were directly responsible and would have the task of ensuring the success or failure of the Treaty.

Further, the Treaty established the Assembly, which would lead to the European Parliament as we know it today, which at the time had 78 members, drawn from national parliaments. Whilst there were 18 representatives from Germany, France and Italy, 10 from Belgium and the Netherlands and 4 from Luxembourg, the supervisory power they possessed ensured guidance in keeping with national sentiments. Even the European Parliament which gradually transformed from a body of appointed individuals to one which consisted of elected representatives, displayed the potential of integration and collective decision making for countries which only a few years before had been at war which each other.

The Council that was formed led to the subsequent Council of the European Union that is in existence today, with 6 members at the time from the member States, and with a rotating presidency for 3 months. Geared towards ensuring smooth functioning of the action being taken by the High Authority, this was also the body that was responsible for the final decision making process.

Finally the Treaty also created a Court of Justice, which later transformed into the Court of Justice of the European Union with 7 judges to ensure that the Treaty was accurately interpreted and implemented.

Evolution of the Treaty

The Treaty of 1951 would see several amendments pursuant to discussions among member States who perceived the review as being necessary to keep the values and principles enshrined in the Treaty relevant and timely. While the Merger Treaty of 1965 brought together the European Coal and Steel Community with the European Economic Community and the Eurotom, there was also the Treaty of Greenland in 1984, the Treaty of the European Union in 1992, The Single European Act of 1986, the Treaty of Amsterdam of 1997, the Treaty of Nice in 2001 and the most significant could be considered to be the Treaty of Rome of 1957 which truly moulded the EU into what it is today.

Taking Regionalism forward

Upon reflection of the journey taken by Europe from the Treaty of Paris onwards, it is evident that visionary decision making, clear strategizing and effective implementation of policy were highly essential and valuable attributes. The decision to pool the most important of resources, notably coal and steel and the creation thereby of an oligopoly controlled by the signatories of the Treaty would lead to integration in Europe which went beyond the economic dimension and gradually saw it progressing to its current state of being the deepest form of integration on the planet.

Whilst regionalism as a concept has evolved from its original form of being dependent on geography alone, to now embracing economics, finance, defence, language and even religion, the notion and potential of regionalism was first given meaning through the European Union. Other regional groupings aspire to progress accordingly but of essence is the need to develop indigenous models as opposed to attempting to emulate the same journey taken by the Europeans. The Coal and Steel Pact was of prime importance to the Europeans, and while economics and trade are crucial for all geographical regions, it is but one of the means through which integration can and should be achieved. Similarly the comparison of the EU with other regional groupings is unfair and irrelevant as the conditions, circumstances and context of Europe is vastly different to other regions.

From an Afro-Asian perspective, the Association of South East Asian Nations (ASEAN) has been able to make steady progress, and the African Union (AU) has also attempted deeper integration. However the South Asian Association for Regional Cooperation (SAARC) which is brimming with potential and has the ability to become a shining example of harnessing the value of collaborative action is far from where its founders expected it to be, owing chiefly to bilateral issues which are spilling over onto the regional table. Whilst this must be avoided for the sake of the whole, it needs to be a part of the past, as countries surge forwards to realize the potential of the 21^st century. Similarly the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) is another grouping with much opportunity as it bridges SAARC and ASEAN, and brings together key countries who can achieve much more than is being experienced at present. Unfortunately the realization of potential has not reached fruition as member States still discuss the visionary potential and are slow to take concrete steps towards realizing that true value.

Whilst multilateralism continues to dominate the international sphere and augments bilateral engagement, models of regional groupings like the European Union which bring together a multiplicity of countries, need to be studied for what they have achieved and the mistakes they have made, analyzed for their progress and understood for the realization of scope in similar bodies elsewhere in the world, especially in Asia. The world of 1951 was vastly different from the one in which we exist today. Having come out of a deadly destructive world war, a few countries of Europe took the bold decision of cooperating to ensure stability, development and prosperity. The fruits of their endeavours are being felt decades later. It was the visionary leadership of the time to which the Europeans of today are thankful, as a region shattered by war, rose once again, and become a contender on the global stage as a collective unit, and not individual countries. This is the effect of collective action and as Europe Day is marked on 09^th May in commemoration of the Schuman Declaration, the lessons of the Treaty of Paris ring true today and are worthy of critical study, to promote stability, cooperation and prosperity.  

 

 

 

BREXIT AND BEYOND: STRATEGIZING BRITISH FOREIGN POLICY IN 2020 THROUGH THE COMMONWEALTH

by George I. H. Cooke

As the United Kingdom exits the European Union, and Euro-skeptics draw parallels to a doomsday scenario, in which more members will opt to leave, it is relevant to reflect upon the United Kingdom, the country that is to be directly impacted in the months and years ahead. Member states of the EU still have each other and even have neighbours such as Serbia, Montenegro, Albania and even Turkey, all of whom are keen to gain membership. The EU will ride out the storm that hit it in the last five years since the now infamous referendum which David Cameron promised and held, and respected as he exited Downing Street. His successors have gambled as did Theresa May in holding elections and hoping to obtain a larger majority, but instead lost more seats. Her successor Boris Johnson, who was one of the architects of Brexit, who campaigned vigorously with Nigel Farage of the United Kingdom Independence Party for Brexit in 2005, had more success in the polls in 2019 and is now prepared to lead his country out of the regional grouping. 

What options lie ahead for the United Kingdom? How will foreign policy be impacted? What will happen to the position of leadership the UK enjoys on the world stage? While questions abound, it is relevant to focus on the mechanisms within the United Kingdom which the country has relied on for centuries and attempt to understand how the UK has weathered many a storm and still retained its advanced place on the world stage

The United Kingdom, having ruled large swathes of the world for most of the 19^th and 20^th centuries and yet after giving up the empire in stages throughout the second half of the last century, has proved her ability to remain relevant and resilient against many odds. Having been a dominant naval power, which transformed into an industrial power house and built a remarkable empire which conquered countries across continents, the loss of one of its initial colonies, America, was soon overcome through a galaxy of other acquisitions of territory, earning for itself the designation of being an empire on which the sun never set.

As the 1^st of February 2020 dawns, the United Kingdom will turn another page in its dotted history, and gradually, but surely return to its position of prestige on the world stage. The referendum of 2015 is now a part of history and the steps being taken, although not irretrievable are certainly momentous for a country that shook the very fundamentals upon which two particular concepts of International Relations discourse, those of sovereignty and regionalism, have long been established.

Sovereignty challenged from within

The calls for the referendum centered on numerous issues, one being the diminishing sovereignty that the British people enjoyed over their policy formulation and implementation, as it was argued that Brussels, dictated terms and conditions. This, it was noted, was owing to the supranational form of cooperation that the European Union created. British people must decide on their own future, was the call, in a bid to strengthen sovereignty of a country that had delicately balanced and ensured a Union of its own for centuries. Yet the day after the referendum, when Nicola Sturgeon, first Minister of Scotland said that she intended “to take all possible steps and explore all possible options to give effect to how people in Scotland voted - in other words to secure our continuing place in the EU, and in the single market in particular”, alarms bells rang at Downing Street and the new Prime Minister Theresa May flew swiftly to the north to reassure Sturgeon.

The Scottish leader’s statement that she thought “an independence referendum is now highly likely but I also think it is important that we take time to consider all steps and have the discussions, not least to assess the response of the European Union to the vote that Scotland expressed yesterday,” was not what was expected by leaders in London, or even hard line Brexit campaigners. Even if they had not envisaged such an outcome, they certainly hadn’t bargained for such stiff resistance from Scotland in relation to the results.

Theresa May’s “commitment to preserving this special union that has endured for centuries” was a quick fix attempt to reassure the people of Scotland that despite their leaders’ sentiments, the central government would respect the “union, not just between the nations of the United Kingdom, but between all of our citizens.” Sovereignty and its preservation, which had been a crucial element of the Brexit campaign, was under fresh strain, not from Brussels this time but from within the United Kingdom itself.

Similarly, views expressed by Gerry Adams, the Sinn Fein President that “the British government should respect the popular vote in the North for European Union membership by bringing forward a referendum on Irish unity. The Irish government, too, should act on this,” created further concern as another integral part of the country, which shares the only tangible border with the EU, was appearing to test sovereignty at its very core. Given that the Good Friday Agreement and relative peace in Northern Ireland, arrived at through a delicate and complex process, might be jeopardized, the cautious note of the Prime Minister led to her delaying invoking Article 50 to commence the process of leaving the Union.

Regionalism threatened

The European Union is held up as the most integrated, progressive and visionary regional grouping of all those that exist at present. From its initial steps through the Coal and Steel pact, to the complex, multinational union of today, the EU has been the epitome of regionalism. Yet the results of the 2015 referendum sent shudders through this hugely consolidated structure with nationalist frontrunners such as France’s Marine Le Pen claiming that “this is the beginning of the end of the European Union. And I hope the birth of the Europe of nations, a Europe of cooperation that we’ve been propounding for years.”

Geert Wilders, leader of the Party for Freedom in Netherlands proclaimed that “We want to be in charge of our own country, our own money, our own borders, and our own immigration policy. As quickly as possible the Dutch need to get the opportunity to have their say about Dutch membership of the European Union.” Related issues such as the Euro were being raised in Italy with Luigi Di Maio, Vice President of the Lower House of Parliament stating that “We want a consultative referendum on the Euro. The Euro as it is today does not work. We either have alternative currencies or a 'Euro 2’”. The decade long process of building a region of stability and certainty upon this overarching concept of regionalism was facing its gravest threats.

Other regional blocs, which aimed to emulate the EU and its comprehensive progress, especially in understanding mechanisms such as the European Commission, which remains one of the most unique apparatus aimed at protecting regional interests over national interests, were suddenly faced with the daunting question of whether integration needs to adopted only up to a certain stage, and if the EU had integrated too much.

United Kingdom: Having it her way

The ensuing crisis created by the referendum and the need for its implementation, given the democratic form of governance prevalent in the United Kingdom, was yet another scenario unfolding in which the UK had had her way. From the refusal to convert the Sterling Pound to the Euro and the rejection of the offer to join the Schengen Agreement, the UK has consistently ensured that she was able to chart her own course despite being within a grouping such as the EU.

In the developments post January 2020 it is apparent that the United Kingdom will once again push for swift settlement of the multitude of issues arising out of this move to depart. From travel to savings, pensions, investments, personnel, the value of the Pound, the proposed Free Trade Agreement, the border with Northern Ireland and numerous other issues that require settlement, the task ahead for British leaders is daunting to say the least, but undoubtedly a challenge they will accept and emerge from relatively unscathed, if past experiences are to be relied upon. 

The United Kingdom is today a United Nations Security Council Permanent Member, a position retained through her victorious alliance during the Second World War. The Prime Minister is the current Chair-in-Office of the Commonwealth, a position which will be relinquished later this year to Rwanda. The UK is a leading power in the North Atlantic Treaty Organisation (NATO), an integral member of the G7, possesses the fifth largest economy with a $2.83 trillion GDP, and also has the eighth strongest military in the world with an estimated defence budget of $47.5 billion. 

This is a country which gave up an empire and gained the Commonwealth. It is a nation that despite many trials and tribulations has always been able to survive and remain resilient in the face of much resistance and strife. The foreign policy trajectory actively pursued in the UK indicates a nation state which, through centuries of experience, is at the top of her game, still, and doesn’t appear to be about to lose that exalted position among nations. 

West Asia referred to as the Middle East

Countries that fall within the West Asian region or those to the north of Africa that straddle global territory from Europe to Central and South Asia have long been termed the Middle East. From peace accords to conflicts, this terminology has remained in use. Yet a clear viewing of the map would clearly indicate that the region hitherto referred to as the Middle East isn’t the middle of the East by any stretch of the imagination, especially in the current context of world affairs. At a time when Britain ruled a major portion of the world, and power was centralized within the context of Europe, it was understood that everything beyond Europe was the East and it stretched to the Far East where countries like China lie.

In the 21^st century, when global affairs are widespread, and the United Kingdom plays an important role, it is relevant to note that it is not the most dominant force it once was. Yet even at this juncture, when the subject of International Relations requires evolution and appropriate terminology suitable for the times, the term Middle East remains part of the vocabulary of the West and is even used in countries within this particular region. This century is argued to be the Asian Century, and thus usage of terms, especially by countries in Asia, in identifying this region as West Asia is appropriate and timely, but it is yet to happen.

High Commissioners and not Ambassadors

Whilst non-Commonwealth countries exchange ambassadors, it is an accepted norm within the Commonwealth for countries to exchange ambassadors who are identified as High Commissioners. India, which took on the British with Gandhi and Nehru at the helm, is a significant example of a country that, despite a bitter struggle with her colonial master, opted to join the Commonwealth and retain this terminology as well.

The usage of this term to date signifies the importance of the Commonwealth and the monumental role that the United Kingdom has played in this grouping. This role has seen the gifting of Marlborough House, the former residence of Queen Mary, for the establishment of the Commonwealth Secretariat; Commonwealth scholarships that have benefited thousands of students over the years in undertaking higher education and granting them opportunities in other Commonwealth states; the impressive quadrennial games which are said to be the third largest sporting event in the world after the Olympics and Paralympics; and the numerous programmes and initiatives, including the Queen’s Commonwealth Canopy (QCC) which is designed to generate a network of forest conservation projects across member states and connect them through programmes of preservation for future generations. All of these initiatives have been possible owing to the dynamic leadership and cooperation stemming from Downing Street, which has ensured that the Commonwealth is relevant and Britain’s contribution is not overlooked or underestimated.

In its initial years the Commonwealth faced pressure and much doubt was expressed over its potential to exist. Then Australian Prime Minister Robert Gordon Menzies, who served twice from 1939 to 1941 and 1949 to 1966, opined that “there has been a great stirring of minds on the subject of the British Commonwealth and Empire. Its name; its structure; its internal rights and duties; its means of family consultation; its place in the world -- all are in debate. In the nature of things, uniformity of ideas about it would be unlikely.”

Relevance of the Commonwealth

Decades later when we reflect upon the Commonwealth and its achievements, which abound in multiple sectors, it is possible to note that its very existence in 2020 is one of its greatest accomplishments, and the British deserve a significant amount of credit for this feat. Even when the UK opted to move closer to Europe and get deeply involved in the activities of the EU, at gradual stages of growth and integration from 1973 onwards, the Commonwealth remained a key foreign policy priority for the British government.

The inability for Vanuatu to host the Commonwealth Heads of Government Meeting (CHOGM) in 2017 led to the United Kingdom stepping in and offering to host it in London in 2018. This was yet another momentous opportunity for the British to take over the Chair-in-Office position which will be retained until the next CHOGM. Prince Charles’ position as the next Head of the Commonwealth was also established at this meeting at which The Queen requested that her son continue what her father started.

It is in and through the Commonwealth that the United Kingdom will seek its greatest source of support post-Brexit, and the mechanism through which the country will look to work more with fellow member states in this grouping. Likewise member states of the Commonwealth will see renewed interest, formidable policies, favourable trade, fresh opportunities and above all a rejuvenated platform from which regionalism in its newest form, which Peter Katzenstein defined as “regions (that) are politically made”, wherein there is less emphasis on the geographic aspects of regions altogether and instead focus is on the political and ideological characteristic of the regions.

It is at this stage that the Commonwealth is being reborn. Serving the interests of the UK, and its member states, it also possesses the potential to become the new, innovative form of regionalism, which would also bode well for other aspirant groupings and unions.

Winston Churchill played a fundamental role in leading the United Kingdom and the allied powers to victory in the Second World War. Similarly Boris Johnson is determined and resolute as he takes on the challenge of leading the United Kingdom out of the European Union and into a new form of existence. Despite the challenges faced a century ago and throughout the 1900s, and through the difficulties forecast for the country in the short to medium term after leaving the EU, the United Kingdom will bounce back reinvigorated and re-energized to take on the world and continue to secure the special place the country has on the global stage, owing to her timeless policy of strategizing amongst all else, her foreign policy.