Finding a role

Since the Brexit referendum in 2016 there has been a continual cry from the victors to hurry up and get Brexit done.  It took until the end of 2020 before the formal and effective exit of Britain from the EU but the reality, largely played down by Brexit’s biggest supporters, is that the real business of Brexit was far more complicated than just leaving the EU.  Only now does the real work of Brexit start with Britain trying to find a new role for itself in the world.  The past few weeks have illustrated some of the opportunities and challenges which Britain will face in the coming years.

With the UK now explicitly out of the EU many businesses, and politicians, are waking up to the new harsh reality of red tape and paperwork that comes with being outside of the EU’s single market.  There are plenty of stories of fresh produce rotting on quaysides because of additional checks and paperwork, and even the UK government’s own hotline to help companies navigate the transition advised some companies that it would be easier to set up subsidiaries in the EU rather than try and deal with the new regulations.

Yet amongst this trade chaos, made only worse by Covid infections and lockdowns Britain has shown how it is able to act more effectively than the EU in at least one area.  The UK is a world leader in vaccinating its population, around half a million jabs per day are being administered with well over 10% of adults already having received their first dose of a vaccine.  This stands in stark contrast to the EU who have been slow to roll out their own programs but more significantly were months behind the UK in ordering enough doses and approving the vaccines for mass use.  The EU had to admit that getting 27 members on board and all agreeing simply slowed the process down.

The faster vaccine approval and roll out most certainly doesn’t justify Brexit, nor does vaccine nationalism make any sense because global travel and exchange simply won’t return to normal until the pandemic is defeated through global vaccination programs or the virus mutates to become much less destructive.  Yet Britain was able to act much faster than the EU, they clearly don’t have the economic heft of the EU but they can still play a global role in terms of setting policy and leadership.

CPTPP

Trade is an essential part of the new role Britain is looking to forge.  To that end, the UK has formally applied to join the Comprehensive and Progressive Trans-Pacific Partnership, CPTPP.  This Obama era deal which was to tie together many of the Pacific countries in a strong, comprehensive, and legally binding trade pact covering new industries and old.  After Trump’s withdrawal from the deal, the Japanese rightly continued to champion the deal, not wanting to waste the work that had gone into it by all countries but also because that this was a new form of trade deal for the coming decades.  It stands in stark contrast to the recently signed RCEP deal which is much simpler and will have limited impact on trade.  The CPTPP is also seen as a block against growing Chinese dominance of trade.  Although the Chinese have suggested they will join the depth and scope of the deal make that highly unlikely.  Britain clearly understands that the Pacific arena will only play a greater role in the coming years and wants to be economically integrated into it.  The EU cannot be ignored either of course and Britain will want to trade actively with the EU, how can it not when a market of 500 million people sits on its doorstep yet the 27 member EU grouping will operate differently now that the UK is no longer a key member driving policy.  The German driven trade deal with China was wholly tone deaf to the current concerns around China and the vaccine row and the EU willingness to block vaccine exports shows a very worrying and nasty face of the EU.

Does joining the CPTPP make sense for Britain?  Clearly Britain is not a Pacific nation but having chosen to remove itself from its nearest trade bloc then it has limited options.  A free trade agreement is planned with the US but that is not a priority in Biden’s administration, nor would Britain hold a strong negotiating hand when working out a deal.  With the CPTPP Britain would be joining with 11 countries many of which it already has very strong trading links with.  Japan, Australia, Canada and New Zealand are all members of the CPTPP and have been highlighted as countries Britain wants to expand trading links with.  To that end, this grouping could make perfect sense for Britain, a middle-sized power, to exert its influence under what could well become a very meaningful trading block who set the standards for future trade relations.

The UK government will certainly see the CPTPP as a key part of its trade policy, but it has still to properly formulate a more encompassing policy towards China.  The David Cameron “golden era” is certainly dead and has been shown to be a golden error yet what comes next isn’t clear.  Tensions with China have ratcheted up in the past week with Britain rolling out its already announced BN(O), British National Overseas, passport scheme which provides Hong Kong residents who are eligible for these travel documents a path to citizenship in the UK.  The swift response from China, and Hong Kong, was to cancel the formal recognition of BN(O) passports as a travel document and as a means of formal identification.   Further to that, Hong Kong explicitly stated that it would not recognize dual citizenship of any ethnic Chinese in the city.  So, for a (ethnic Chinese) Hong Kong or PRC born resident who holds a US, UK or Canadian passport for example, who entered the city on that travel document the Hong Kong authorities would ignore that and treat the person as a Chinese national depriving them of any consular assistance.  A very chilling message to many current residents and overseas visitors.  Ironically Hong Kong still promotes itself as Asia’s World City.  If that slogan ever meant anything, it is meaningless now.

The British government’s response to the situation in Hong Kong is highly commendable and Canada has also implemented preferential immigration policies partly in response to the Hong Kong National Security Law.  The next move out of Britain though made the leadership in Beijing even madder.

OFCOM and CGTN

OFCOM, is the regulator of TV services and the issuer of broadcasting licenses in the UK.  It is wholly independent of the UK government and fiercely guards its independence.   For the past year it has been conducting an investigation into CGTN, China’s flagship global news channel.  OFCOM has just published the report of that investigation and stripped CGTN of its broadcasting license.  The licensee did not have direct control over the editorial content of CGTN, and although OFCOM gave CGTN ample opportunity to rectify the situation they failed to do so and even failed to provide some basic information surrounding their application.  The regulator also made it clear that since CGTN ultimately broadcast on behalf of a political party, the CCP, then that too disqualified them from holding a license.  Reading the report leaves the reader in no doubt that OFCOM had to take the action it did, but it is wrong to say that CGTN has been banned in the UK.  Its content can still be made in the UK and distributed via the internet for instance, although it cannot broadcast in the UK.  Such fine distinctions are of course lost on the Chinese leadership.  Nor can the CCP leaders comprehend the independence of OFCOM, the revocation of the license is not the work of the government but stands separate from that.  The action does raise a fair question though, the nature of CGTN and the whole of the CCTV network has never been in doubt, General Secretary Xi Jinping has said that the media’s surname is Party and is there to promote and support the CCP’s work, so how did CGTN get a license in the first place as it has been broadcasting for over a decade?

To add to the government’s troubles, this week saw a 100-page legal opinion from a QC, Queens Counsel, a senior barrister within the English legal system, which stated as follows,

“On the basis of the evidence we have seen, this Opinion concludes that there is a very credible case that acts carried out by the Chinese government against the Uighur people in Xinjiang Uighur Autonomous Region amount to crimes against humanity and the crime of genocide.”

This follows the US government’s classification of the Chinese state policy in Xinjiang and towards the Uyghur minority as genocide and having such a high-profile declaration not only raises awareness of the dreadful situation in Xinjiang but also the expectation that governments will act against China in some way.  There have already been calls for a boycott of the 2022 Winter Olympics which will be held next February in Beijing (although Beijing seldom has snow in any meaningful amount).  Those calls will only increase as the games as the games approach.  As an aside it will be interesting to see if the games can even go ahead, the Tokyo 2020 games have already been delayed because of Covid and it is far from clear if the same pandemic concerns won’t hit Beijing 2022 as well.  China is currently operating extremely harsh quarantine restrictions for foreign arrivals and from a practical point of view simply is unable to open to the world without the risk of significant infections.

The British government finds itself in an unenviable position.  Boris Johnson has surrounded himself with a cabinet of pro-Brexit yes men and women which many commentators call one of the weakest cabinets in decades.  Brexit has consumed so much political oxygen and attention in the past few years little thought has been given to anything else except getting Brexit done.  This Brexit myopia left the country woefully under prepared when the pandemic struck last year although the recent fast vaccine roll out should hopefully pay real dividends soon.  If the vaccine is solution to the pandemic there is no obvious answer for how the government can deal with China.

As the OFCOM and QC legal opinion clearly show the government doesn’t control, nor should it, the narrative around what China does or how China’s actions should be responded to.  Boris Johnson’s government took a very strong line on Hong Kong, which infuriated China, but it is still less sure how to deal with Chinese trade and investment.  There is a growing awareness of China’s investment within the UK and of its actions globally and many are speaking up about this.  Britain is too small to stand up to China alone on many issues, but it can play a leading role as part of a broader collation of like-minded countries.  By joining the CPTPP framework it has taken an excellent first step to remain engaged in the world and continue to have a important role in global decision making.  The economic growth of the future will be in Asia and the US, much less so in Europe.  Britain may have given up its prominent EU role for lots of bad reasons, but it does have the ability to surprise on the upside by joining with others and being nimbler and risk taking when the opportunities arise.  Having formally applied the UK government will be determined to get accepted into the CPTPP grouping, being left outside is not a encouraging prospect.