The UK’s Fine Foreign Policy Line Post-Brexit

Ever since the UK voted to leave the European Union, one warning from the country’s largely pro-Remain foreign policy establishment has rung out loud and clear. Divorced from the European Union, the UK risks finding itself marooned between the continents of Europe and the United States, and not strong enough to act independently.

But few can have imagined that what might be called London’s transatlantic dilemma would pose itself so sharply so soon - in fact even before the UK had formally left the EU. Nor that it would take so many forms. 

The issue that loomed largest in London concerned the Chinese telecoms giant, Huawei, and what role it might play, if any, in the development of the UK’s 5G infrastructure. After a fraught few days, the Government’s National Security Council met, chaired by the Prime Minister, Boris Johnson, and produced a classic compromise. 

On the one hand, Huawei would be permitted to take part in the development of the UK’s 5G. On the other, it would be barred from any sensitive areas - technological or geographical - and would be required to cut its current share of the UK’s telecoms market to below 35 per cent.

Now many in the UK, myself included, might be surprised at the extent to which Huawei has already penetrated the country’s telecoms market. A few years ago, I was astonished to see an enormous tower with the company’s name greeting drivers as they approached the city of Reading, to the west of London, where its UK operations are based.

The very notion that a Chinese company, and a telecoms company at that, would be so brazenly advertising its presence seemed hard to reconcile with this country’s long suspicion of communist regimes. It is hard to imagine a Russian company being permitted to do the same.

Somehow, though - with its cheap and efficient technology - Huawei has gained a secure foothold in 15 years of operating in the UK. It sells not only mobile phones to ordinary Britons, but serious hardware to many of the country’s telecoms companies, including the once state-owned British Telecom.

So the question facing Boris Johnson’s government was not whether Huawei should be permitted to sell in the UK market - that argument, clearly, was over. The new question was whether it should be involved in the development of 5G, where it could, according to some experts, potentially pose a risk to British national security.

Huawei’s opponents included many Conservative MPs and a substantial chunk of public opinion. Their view was - and is - that China remains a communist state and that no Chinese company, even a technically private one such as Huawei, can be truly independent of the Beijing government. But the argument was not confined to the domestic considerations. Coinciding as it did with Brexit, the UK’s decision had far-reaching international implications.  

The US administration, up to and including President Trump, had made no secret of its objections to Huawei. Their argument was that if Huawei were allowed to help develop the UK’s 5G, this could compromise not only the UK’s security, but  US security, too, because of the intelligence-sharing arrangement known as “Five Eyes”. Within this group, the US, Australia and New Zealand had already ruled out cooperation with Huawei, and Canada was dithering. There were warnings that, if it went with Huawei, the UK could be ejccted from this exclusive club.

Once upon a time that choice might have been obvious. Now, however, it was hugely complicated by Brexit. Expanding trade outside the EU, particularly to growing markets and particularly to China, is a priority of the UK’s post-Brexit policy - but so is a bilteral trade deal with the United States. Despite Boris Johnson’s carefully crafted compromise, it is still not at all clear how these essentially either-or choices can be reconciled.

Pressure from Washington was heavy and overt - highly unusual from one close ally to another. In the weeks before the decision, there were high-level visits both ways. As a pro-Brexit prime minister, however, Johnson could hardly boast that he had restored UK sovereignty, while capitulating to the US on Huawei.

In the event, Johnson appears to have squared the circle, for the time being at least. Huawei’s activities in the UK will be “limited”, but the company will not be excluded from the development of 5G. Republicans in the US Congress were outraged - one accusation was that the UK was sacrificing the “special relationship” for the “surveillance state”. But Donald Trump himself expressed mere “disapppointment”. But there could yet be further repercussions - on the feasibility of a bilaeral trade deal, for instance.

Nor is Johnson completely out of the woods at home. Many of Johnson’s Conservative MPs wanted Huawei banned altogether. They could mount a challenge when the 5G legislation comes before the House of Commons, though Johnson’s majority is probably big enough to withstand a rebellion.

The UK’s decision could also embolden EU countries to keep their own markets open to Huawei, adopting a formula that sets limits, similar to that devised by the UK. In that event, the ideological and trade rift between the EU and the US would only be widened, potentially complicating the UK’s position in future.

This is because what to do about Huawei is only one of several transatlantic dilemmas already facing the UK in the wake of Brexit. Another, which surfaced in some ill-tempered exchanges at the recent World Economic Forum at Davos, is the UK’s plan to levy a special tax on US multinationals, such as Google and Amazon, which currently pay negligible amounts outside the US.

As a member of the EU, the UK could have been part of a concerted EU effort to make such US companies pay - the EU’s collective clout forced a US rethink on steel tariffs in the early 2000s and Brussels has generally managed to hold even the protectionist Donald Trump at bay. By itself, however, the UK is in a much weaker position. The US wants the UK to wait until a new international tax regime has been agreed.

As with Huawei, there could be a double cost for London of defying the US. One would be Johnson’s hopes of a swift trade deal ; the other would be the risk to his credibility, because a “Google tax”, so-called, is highly popular with the British public, who believe that the US tech-giants do not pay their way. 

It is not just in the area of commerce, however, where the US and the EU are at odds and the UK now finds itself straddled uncomfortably in between. One of the most conspicuous and urgent concerns policy towards Iran, where the UK sides with the EU in hoping that the 2015 nuclear agreement can hold. When the US recently assassinated Iran’s military commander, Qassem Soleimani, Boris Johnson and UK ministers stopped short of condemning Washington specifically, while calling for “de-escalation” on all sides. Such a stance was unlikely to command huge credibility either side of the Atlantic.

Donald Trump’s long-awaited Middle East peace plan, just presented in Washington with great fanfare, places the UK in a similarly difficult position: its instincts would place London far more in sympathy with those Europeans who reject the one-sided nature of the proposals. Any opposition, however, has been tempered by the need not to alienate the United States at such a time. answering questions in the House of Commons, Boris Johnson was overwhelmingly positive in his assessment, and appealed to Palestinians to “engage”.

It is early days, and there is an 11-month transition before the divorce from the EU is finalised. But the outlines of the foreign policy dilemma the UK will face as an independent actor are already clear. To make its mark, London will need its diplomacy to be newly nimble and adroit. It will need an ability to spot potentially fruitful alliances on issues as they arise. It will take a whole different way of looking at the world. And it is worth asking: this time next year, how far will the UK have come?
Views expressed are of individual Members and Contributors, rather than the Club's, unless explicitly stated otherwise.