Foreign Affairs: Global Role, Emerging Powers and New Markets

Lord Anderson of Swansea Excerpts

Thursday 6th December 2012 Lords Chamber

[Lord Anderson of Swansea]

My Lords, I begin by formally proposing the noble Lord as chairman of the possible international affairs committee. I had the privilege of following him as chairman of the Foreign Affairs Committee. I have enormous respect for him and the work that he did on the Front Bench, when he was always courteous and on top of the subject. He always answered questions, which is not always the case with those on the Front Bench. I fondly welcome him to the Back Benches.

Lest this should appear to be an obituary, I detected at least one blind spot in the noble Lord’s analysis, on which I shall focus. I agree with him that we need to seek markets for our goods and services worldwide and to be ever ready to respond to global trends. However, I stress that our core area is our own region here in Europe, which accounts for 50% of our trade. It is manifestly not a case of either/or. Recent surveys predict a slower growth of our exports into the European market. Clearly the dominance of the City of London—which can, I hope, look after itself—has recently been challenged by the governor of the Bank of France, which is the penalty of our choosing to be outside the euro. Of course we need to increase our exports to the BRICs and elsewhere but there is evidence of slower growth in those markets. For example, the projected growth for Brazil this year is just under 1%; the projection for India in the financial year 2012-13 is 5.5%—the lowest for a decade; and in the third quarter, growth in Russia fell to 2.9% and in China to 7.4%.

Our starting point is surely the wisdom of the Oracle at Delphi: know thyself. We need a realistic, not a nostalgic, analysis of our strengths and weaknesses and the global environment in which we trade—know thyself. Of course, as the noble Lord said, we emerged with many advantages from our history, not least of which is the English language, our centres of excellence, our military, our diplomacy and our universities. However, the Government should be worried about the self-imposed threat to our economic prospects posed by the sharp decline in student applications from India.

Our history has made us members of key international organisations: the UN Security Council, NATO, the EU and the Commonwealth. The last, in my judgment, is surely the blind spot of the noble Lord's presentation. I consider myself a Commonwealth man, having chaired the UK branch of the Commonwealth Parliamentary Association for four years, but I do not recognise the picture painted by the noble Lord. Recent CHOGMs have raised hopes of deep institutional change, but Commonwealth institutions are now in some considerable disarray. Successive Governments in the UK have worked hard to develop relations with India, a key emerging market. Frankly, however, India has little interest in the Commonwealth and is very hard-nosed on commercial matters, as we have seen on the Typhoon purchase.

In a lecture on 19 June 2007, the then Commonwealth Secretary-General, Don McKinnon, gently but effectively undermined much of the thesis of the noble Lord. I certainly do not accuse the noble Lord of this, but some in his party use Commonwealth enthusiasm as a cover for their anti-Europeanism. The Commonwealth that they favour is mainly the old dominions. That leads to symbolic and often silly gestures such as the recent agreement on the co-location of embassies with Canada at a time when our foreign policy formulation is increasingly based on close working relationships with our European partners. This is on a par with the threat by former Defence Secretary Liam Fox to leave the European Defence Agency, with its pooling and sharing—happily, the Government now appear to be rethinking this—as well as with the severing of relations with their natural allies in Europe, the European People’s Party.

An audit of relations with the EU has been ordered by the Foreign Secretary in an effort to placate anti-Europeans. I understand that the Foreign Office recently met Professor Sejersted of Norway to discuss the methodology and conclusions of his similar audit in Norway. He concluded that Norway’s relationship amounted to integration without representation—hardly a model for others.

Of course the EU may now develop a tighter inner core. We are likely to find ourselves, albeit with variable geometry, on the exterior. However, our policies seem designed to lose good friends such as Poland. Surely the Government should recognise that to leave the EU or to seek unrealistic objectives would be a major blow to our trade, not only with the EU but with third countries. I cite the recent reply in the European Parliament given by Commissioner De Gucht, who said:

“The Commission takes the view that if a Member State were to leave the European Union it would no longer benefit from preferential arrangements included in EU trade agreements. In such circumstances, a Member State would not be subject to the Union’s common commercial policy and could no longer benefit from agreements negotiated on that basis. Moreover, a third country offers concessions to the EU on a reciprocal basis, expecting market access to the Union as a whole. Third countries would be unlikely to offer as generous concessions to a Member State which has activated Article 50 that could only offer access to its own market”.

We should quite properly look at a free trade agreement with the US. There will be better prospects for that after the likely failure of the Doha round. We should remember that it is the European Union which will negotiate on our behalf as I hope we move step by step towards a free trade agreement. If any state were to leave the European Union, it would lose bargaining power and would receive less generous concessions from third parties.

My conclusion is that we should seek to boost trade throughout the world, both in the Commonwealth and elsewhere. In the debate on the future of the EU we have natural allies, but currently the Government seem to be doing their best to irritate them. Even very strong Anglophiles such as Mario Monti publicly state their exasperation and despair at UK policies. He says, in effect: “Make up your minds. Do not marginalise yourselves by your actions, which will make planning more difficult for us”. In short, we should know ourselves and avoid ideological illusions.