Britain as the “Great Trading Nation”

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Written by Frank Maxwell

Amidst the tumult of Britain’s post-referendum politics, it can be easy to forget just how much foreign policy discourse in London has changed in the span of just nine months. In offering merely verbal support for Donald Trump’s missile strike against a Syrian airbase and declining to commit to backing any further American intervention, May’s government has broken subtly but decisively with British foreign policy precedents of the past two decades.

Since Tony Blair defined his rules of intervention in 1999, successive British prime ministers had joined with their American and European counterparts in interventions ranging from Kosovo to Iraq and Afghanistan. David Cameron’s premiership seemed at one point like it would be the apogee of this era after 2011 Libyan intervention, but it ultimately spelled the end of Britain’s appetite for armed humanitarianism. Parliament refused to allow Cameron to pursue military action in Syria in 2013, and an inquiry into Cameron’s handling of Libya resulted in a scathing condemnation of what is now seen as a failure. Were it not for the Brexit referendum, the chaos of post-Gaddafi Libya might have been the defining black mark on the former PM’s legacy.

Instead, it was Brexit that determined how David Cameron’s “abroad” legacy would be seen. In addition to bringing down one prime minister, last June’s referendum also imposed an entirely new set of international priorities for his successor. Faced with the dual challenges of exiting the European Union and securing the UK’s place as a global economic player, trade relations have now been placed at the core of how of the UK defines its place in the world and take precedence over all other foreign policy matters facing Theresa May’s government. While May and her ministers may have come in for some ridicule when Whitehall officials branded the UK’s ambitions as Empire 2.0, they have been aggressive in trying to set the parameters of Brexit negotiations and visiting potential markets since taking office. As seen with the Syria strike, nothing else currently merits much more than a verbal response.

Those travels, of course, are primarily an opportunity to pitch Britain after Brexit as a “great trading nation.” Fortunately for observers, they also provide a window into the government’s priorities when it comes to future partners. May’s first overseas trip since initiating proceedings to leave Europe, for example, was to Jordan and Saudi Arabia. The Jordan visit was highlighted by May’s pledge of a £1 billion aid package to boost employment and education for Syrian refugees, as well as further support for the Jordanian air force and new initiatives to counter violent extremism. The main target of the trip, however, was Saudi Arabia, which will soon be listing Saudi Aramco as the cornerstone of its Vision 2030 economic reform plan.

The fact that the chief executive of the London Stock Exchange (LSE), Xavier Rolet, accompanied May on her trip speaks volumes about what the British hope to get out of the Saudis. The LSE is looking to win the bidding for the listing of Aramco and cash in by hosting the international component of its initial public offering (IPO). If the LSE succeeds, it would be a major boon for a post-Brexit City anxious to prove that it still has the gravitas to attract major investment. Wherever the Saudis choose to list Aramco, however, the UK and Saudi Arabia each feel they can gain from the economic changes happening in the other: just as Britain seeks to encourage Saudi investments into its post-Brexit economy, the Saudis are hoping to secure investments from the United Kingdom that will help push their reform plans forward.

Saudi Arabia and its neighboring Gulf emirates are clearly important to May’s plans, considering that her most recent Middle East trip came just four months after a visit to the Gulf Cooperation Council in Bahrain. To replace its current position in the EU, however, the UK will need to rekindle a global network of trade partnerships that draws on Commonwealth heavyweights like India, Canada, Australia and New Zealand but also the United States and China. While Theresa May was in the Middle East, Chancellor Philip Hammond was in India meeting with Narenda Modi’s finance minister and announcing a new fund of up to £220 million to invest in India’s renewable energy industry. The perfect opportunity, of course, for Hammond to push discussions of a UK-India free trade deal. Also apparently keen to for an agreement is Australia, the first country to set up a Trade Working Group with the UK and with whom the UK enjoyed two-way trade worth some £16 billion in 2015.

Of course, all of these hoped-for trade relationships are just that: aspirations. The harsher reality of Britain’s new role in the global economy is that, even if the free trade agreements May and her allies manage a promising start, it will take years of negotiations and immense political capital to bring them to fruition. In the meantime, Britain will likely lose free access to its most important market—the European Union—and will need to stomach inevitable hits to growth and exports between now and the brighter future the Brexit camp promised.

If nothing else, though, the “trading nation” argument put forward by the Brexiteers last year will have come to fruition: given the overwhelming complexity of the EU exit negotiations and the time it will take Theresa May and her government to work out new trade agreements with both Europe and other hoped-for partners, her foreign policy legacy will almost certainly be dominated by trade and little else.