Breen, John Harley

Haacke, Jürgen

LSE Research Online

  Jürgen Haacke and John Harley Breen Steering UK–Southeast Asia relations post-Brexit  Article (Accepted version) (Unrefereed)   Original citation: Haacke, Jürgen and Breen, John Harley (2018) Steering UK–Southeast Asia relations post-Brexit. East Asia Forum. pp. 1-3. ISSN 1839-0242  Reuse of this item is permitted through licensing under the Creative Commons  © 2018 The Authors  © CC BY-NC-ND 3.0  This version available at: http://eprints.lse.ac.uk/90341/ Available in LSE Research Online: October 2018  LSE has developed LSE Research Online so that users may access research output of the School. Copyright © and Moral Rights for the papers on this site are retained by the individual authors and/or other copyright owners. You may freely distribute the URL (http://eprints.lse.ac.uk) of the LSE Research Online website.     East Asia ForumEconomics, Politics and Public Policy in East Asiaand the Pacifichttp://www.eastasiaforum.orgSteering UK–Southeast Asia relations post-Brexit17th March, 2018Authors: Jurgen Haacke and John Harley Breen, LSEThe shift in global economic activity towards the thriving economies of South and East Asia will‘determine where the golden opportunities of the future will be and where we must be too’.This was the position communicated [1] by Liam Fox, the UK Secretary of State for InternationalTrade and the President of the Board of Trade, on 27 February 2018.Fox’s rhetoric reflects a wider theme in the UK government’s foreign policy since 2010 [2]:economic power has shifted from the West towards East Asia. But the Secretary’spronouncement risks being understood — once again — to refer primarily to opportunitiesassociated with India and China. By not explicitly mentioning Southeast Asia, Fox hasintensified the question of how London will approach this region in the future.The United Kingdom has longstanding security and economic interests in Southeast Asia.London is a member of the Five Power Defence Arrangements and has a residual militarypresence in Brunei. Two-way trade with Southeast Asia may only constitute a fraction of theUnited Kingdom’s trade with Europe but it still amounted to £32.4 billion (US$45 billion) in 2016— a 9.1 per cent increase from 2015. The United Kingdom’s main trading partner in the region isSingapore, through which trade with other ASEAN states is often routed.Beyond its bilateral ties, London’s relationship with ASEAN is mediated through the EuropeanUnion, one of ASEAN’s most generous dialogue partners. The EU has an enhanceddialogue partnership with ASEAN [3], currently geared towards supporting ASEAN Community [4]-building. With the United Kingdom’s withdrawal from the EU approaching, London has todecide whether it wants a formal partnership with ASEAN — and, if so, what kind ofarrangement. The ASEAN Charter lists possible options, including full dialogue partner, sectorial                               page 1 / 3East Asia ForumEconomics, Politics and Public Policy in East Asiaand the Pacifichttp://www.eastasiaforum.orgdialogue partner or development partner.The ideal scenario for London would be a simple transition from being part of the EU–ASEANdialogue partnership to enjoying the status of full dialogue partner on its own. This is not verylikely.ASEAN imposed a moratorium on awarding dialogue partner status in 1999 to consolidate itsexisting dialogue relationships in the wake of the Asian financial and economic crisis. If thestatus of dialogue partner is not, or is not immediately, available, the United Kingdom mayconsider applying for development partner status (as Germany did). It could also argue in favourof negotiating a ‘bespoke’ partnership that better takes account of the United Kingdom’s entirerange of links, interactions, interests and contributions vis-a-vis the region.The initiative for any formal relationship needs to come from London as ASEAN is unlikely tomap out a pathway for the United Kingdom to work towards a formal relationship. But a call for a‘bespoke’ arrangement in name might lead to raised eyebrows because it is probably not clearto all ASEAN members why London should receive a special formal relationship status. Toattain such status London may also be asked to first demonstrate its commitment to ASEAN’sgoals through further substantive cooperation and sustained engagement.London must also decide whether to prioritise slowly building a formal partnership with ASEANor to initially focus on greater economic opportunities. Having a formal partnership with ASEANwill not necessarily guarantee that the United Kingdom’s trade prospects dramatically improve.Greater trade in goods is not always dependent on a free trade agreement (FTA), which oftendo not remove non-tariff barriers, especially given that the UK has strong service exportindustries.Still, the United Kingdom is positioning itself as a country that is keenly interested post-Brexit [5]in exploring FTAs with relevant trading partners beyond Europe to meet its prosperity interests.Pursuing this objective in Southeast Asia is not straightforward, but possible choices includefocusing on bilateral FTAs with selected ASEAN states, the long-term vision of an ASEAN–UKFTA and London joining the Comprehensive and Progressive Agreement for Trans-PacificPartnership (CPTPP).Since the concluded but long-stalled EU–Singapore FTA might enter into force before theUnited Kingdom exits the EU, London may be able to ‘grandfather’ an existing deal. Singaporeis unlikely to object. Singapore is currently the United Kingdom’s largest trading partner inSoutheast Asia and one of the few Asian countries where the United Kingdom has a tradesurplus in goods and services.While statistics hide many truths, they do show that the United Kingdom’s market share ingoods is now falling behind Germany and France in some Southeast Asian countries. Sinceimproved market access in ASEAN states will remain of interest to London, focusing on theCPTPP [6] might be a logical step. But aside from the question of whether joining thisarrangement is politically feasible, it remains unclear whether significant investment into such amove would be compatible with quickly building a partnership with ASEAN.                               page 2 / 3East Asia ForumEconomics, Politics and Public Policy in East Asiaand the Pacifichttp://www.eastasiaforum.orgAs the United Kingdom exits the EU, the challenge will be to develop a coherent policy towardsSoutheast Asia that takes account of the United Kingdom’s wider geopolitical and securityinterests, while strengthening its economic ties with Southeast Asia — a market of over 640million people. The United Kingdom must also balance a long-term strategy for engagingASEAN with the high-profile pursuit of new FTAs.Jurgen Haacke is Director of the Saw Swee Hock Southeast Asia Centre at the London Schoolof Economics and Political Science (LSE). John Harley Breen is a Researcher at the Saw SweeHock Southeast Asia Centre, LSE.Article from the East Asia Forum: http://www.eastasiaforum.orgURL to article:http://www.eastasiaforum.org/2018/03/17/steering-uk-southeast-asia-relations-post-brexit/[1] communicated: https://www.gov.uk/government/speeches/britains-trading-future[2] since 2010: https://www.gov.uk/government/speeches/britain-s-prosperity-in-a-networked-world[3] partnership with ASEAN: http://www.eastasiaforum.org/2017/01/03/the-eu-and-asean-after-brexit/[4] ASEAN Community:http://www.eastasiaforum.org/2017/05/12/the-way-forward-for-the-asean-community/[5] post-Brexit:http://www.eastasiaforum.org/2016/06/27/can-asia-shield-the-world-against-europes-brexit-woes/[6] on the CPTPP:http://www.eastasiaforum.org/2018/03/04/the-new-trans-pacific-partnership-hunkers-down-against-trump/Powered by TCPDF (www.tcpdf.org)                               page 3 / 3

Steering UK–Southeast Asia relations post-Brexit

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Steering UK–Southeast Asia relations post-Brexit

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