When the UK left the EU, few could have predicted that it would be called on quite quickly to play an outsized foreign and economic policy role in the conflict in Ukraine. But we have learned that the UK has significant tools which stem directly from its leaving the EU. Able to sanction Russia based on its own internal concerns, and not required to broker internal deals with 27 other member states, the UK was able to do two dramatic things. First to impose very significant sanctions on Russia and second to announce immediate reduction to zero tariffs and no regulatory barriers to all Ukrainian products. By contrast, the EU had to agree among the EU-27 on a sanctions policy as the EU has a common commercial policy. Famously, individual member states wanted their own specific exemptions (Italy for fashion goods, for example). Germany, in common with other member states, is highly reliant on Russian gas and oil and forced the EU to limit its sanctions in this regard.
Outside of the EU, the UK can have a closer partnership and some influence over the US. The latter was able to apply one of the few sanctions to have immediate effect, the application of the Foreign Direct Product Rule which prevents the export of any product produced anywhere in the world with US technology. This ban has applied to chips produced by the Taiwan Semiconductor Company which Russia was dependent on. It will be important to ensure that China or other supporters of Russia do not collaborate to circumvent these rules. The UK could adopt a similar rule as its technology is also used in manufacturing all over the world. If the EU were to attempt this, it would require the approval of all member states, something quite unlikely because of the reluctance of some, notably Hungary and Germany to be so openly hostile to Russia. While sanctions on oligarchs have a marginal impact on Putin, sanctions targeting Russian manufacturing, especially in the areas he wants to demonstrate success such as technology have proven much more effective.
The Ukraine crisis has also shown that the UK, particularly its PM, and foreign and defence secretaries, understood much more quickly than most global leaders what the stakes are, and that this was really an opening salvo in a much bigger battle between liberal democracies based on markets and competition, and autocratic, crony states based on the projection of personal power. Indeed, as the Prime Minister noted while he was Foreign Secretary, one of the principle opportunities of Brexit was the role the UK could play “like a giant synchrotron accelerating and catalysing” economic development all over the world. It was the UK’s unique combination of soft power, substantial economic power as the world’s fifth biggest economy and a commitment to open trade and competition that could help renew the stalling global system.
Viewed in this light the UK outside of the EU could solve a global problem. In the current crisis, the PM, foreign and defence secretaries grasped early on that pragmatic approaches of cohabitation with states like Putin’s Russia or Xi’s China were not possible, and that one system was measurably better for people than the other. The West could have reacted differently. Indeed, a German official responding early on to a request from the Ukrainian Ambassador in Germany for weapons responded as many were then thinking – why would we give you arms now? By the time you receive them you will be overrun.
Instead it would be better to plan the future of containment of the Russian threat. Forgotten was Churchill’s injunction, “you cannot negotiate with a tiger when your head is in its mouth”. Pragmatism could have prevailed, with no provision of materiel and relatively minor sanctions along the lines of those imposed post-Crimea in 2014 which cost only about one per cent of Russian GDP. Ukraine would indeed have been overrun in a self-fulfilling prophecy and we would now be talking about an agreement with Russia as it reshaped its borders to include a large chunk of Ukraine, or perhaps the partition of Ukraine itself. But Russian gas would continue to be flowing to Germany, and the rest of the EU, and the China-Russia axis would be growing stronger.
Boris Johnson, Liz Truss and Ben Wallace can be credited with ensuring this did not happen immediately and might not happen at all. It was the UK that led by example, dragging a reluctant EU with it, and persuading the US to properly engage. This outsize role has been recognised both by the President of Ukraine and also perhaps most tellingly by Putin himself who has just recently banned the PM and leading Cabinet members of the UK from Russia (he has not yet done this to other European leaders). We are in a different world as a result. Johnson understood the stakes clearly when he said that Putin must fail, and be seen to have failed. Every Cabinet member is under no doubt that part of their job is to ensure that their departments are doing everything in their power to see to that end.
This is all to the good because it will be necessary to demonstrate this same clarity and conviction when it comes to a threat which is much, much larger but arguably less immediately urgent, China. China also projects its power through its state-owned enterprises (SOEs) and the West has no response to the activities of Chinese SOEs and other supposedly private firms that benefit from government privilege and benefits all over the developing world in a voracious hunt for resources. These companies operate like the East India Company did in the 1700s. As a result of their activities, CHEC, a subsidiary of a Chinese SOE, actually owns land in Sri Lanka (which defaulted on its debt to CHEC leading to the Chinese company being given a 99-year lease of the land around the Hanbantota deep sea port). China has also established facilities that ring the Indian ocean. It has turned the South China Sea into the Lake of China, and is now seeking control of some of the most important shipping lanes in the world with its security deal with the Solomon Islands.
Meanwhile the West fiddles with its obsession with pronouns and (in the case of the UK) cake, while Rome burns. No one’s rights will matter much if this central battle for the most basic of human rights is lost. China’s ambitions are not limited to the Indian ocean and Africa, but include Central and South America, Africa and Asia – anywhere, in short, where western companies driven by commercial considerations and not political ones are not of the field. China’s belt and road is their version of the expansion of western powers in the 18th and 19th centuries. As China, and Russia have correctly noted, the West is distracted. Putin banked on it. So too does Xi. Even ISIS, momentarily out of Western newspapers front pages, looks at the West with a mixture of bafflement and amusement.
Battlefields exist all over the world, primarily in the developing countries where most of the world’s population actually lives. They too are observing – even the big politically powerful ones like Brazil and India who are hoping that they can remain non-aligned in this battle of economic and democratic ideas. It is time for those countries that form the core and beating heart of economic liberalism to force a choice upon them. When the immediate fire has been successfully fought we must start to build up the common defence of economically liberal democracy. The building blocks are there. The Five Eyes security partnership, AUKUS, the newly launched Atlantic Charter, and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) are some. Multilateral institutions like the WTO lumber on like giant embattled ships on the dangerous seas, but these too must be revived and refitted for purpose.
The future of the world’s people depends on this more than anything else. We were wrong to think that the forces of distortion, cronyism and autocracy had lost when the Berlin Wall came down. They were merely reassembling, and now they are on the march. They must fail.
