Foreign Affairs: Global Role, Emerging Powers and New Markets

Lord Kerr of Kinlochard Excerpts

Thursday 6th December 2012 Lords Chamber

[Lord Kerr of Kinlochard]

My Lords, I thank the noble Lord, Lord Howell, for securing this debate. I also congratulate him on the style and stamina that he showed on the Front Bench, sometimes under grave provocation—sometimes from me. I thank him very warmly.

I had intended to say a word about China but my fox has been elegantly shot—it could not have been better shot—by the noble Lord, Lord Bates. I shall therefore say a word about Korea and make one general point.

Korea is the world’s 12th largest economy—larger than the whole of ASEAN. Last year, it grew faster than any other OECD country and it has the greenest growth strategy in the OECD. It is a major inward investor here. It is a country that the Minister knows very well and, as he knows, Korean markets are now more open to British exports than ever, thanks to the free trade agreement that has come into force.

I need to declare an interest. I am the UK president of the UK/Korea Forum for the Future—a role I inherited from the noble Lord, Lord Richard, when I came to this place. I had inveigled him into doing it when I was Permanent Secretary at the Foreign Office, and the moment I arrived here he passed the role to me with all the dexterity of a Welsh fly-half. In that semi-official capacity, I congratulate the Minister on the Opportunity Korea initiative, in connection with which events will take place in Birmingham, Manchester, Edinburgh, London and Bristol in February. Creating greater interest in this country in the Korean market and in Korean culture is an extremely good idea.

In that context, I hope that the Minister can persuade his colleague, the Foreign Secretary, that it is high time that a British Foreign Secretary visited Seoul. The last British Foreign Secretary to visit Seoul was Douglas Hurd—now the noble Lord, Lord Hurd of Westwell—who did so 20 years ago. Frankly, that is not good enough when we are talking about a relationship with a country which takes us as seriously as the Koreans do, which has such a difficult political environment in its immediate neighbourhood and which is such an important market for us.

People in Korea have a real respect and affection for this country. The foundations of that are partly historical, with the valour of British forces 60 years ago, and partly due to recent partnerships, such as the fact that in Brussels the British were the most powerful supporters of the Commission in securing the free trade agreement. The Koreans know that. They would be delighted if we took more interest in them but they would be disillusioned if we took less interest in Brussels and therefore were able to exert less influence on behalf of the interests that we have in common. Therefore, the last point that my noble friend Lord Hannay made today was very important. I know that Koreans are puzzled at our present stance on the European Union.

I was in Australia last week. Friends there also expressed some puzzlement about our stance on Europe but I was not able to provide an explanation. They asked me why, alone with the Czechs, we chose from the outset to play no part in new EU mechanisms to reinforce the very fiscal discipline which the Chancellor was again preaching yesterday, even though no intra-EU fiscal transfers were envisaged. They have noted that this time we alone—without even the Czechs—chose from the outset to stand aloof from proposed arrangements for improved banking supervision in Europe, arguing that they were relevant only for eurozone member states, even though all other non-eurozone member states will be arguing this week in the European Council for arrangements that will permit them to join and even though our self-exclusion is causing real concern in the City. Noble Lords will have noted the important article by Gerry Grimstone, chairman of Standard Life and TheCityUK, in this week’s FT. I quote:

“British practitioners, politicians and officials need to engage more at the European level and to do so at an earlier stage—building alliances, and proactively informing and shaping the EU … agenda. Whether it is on banking union or on particular markets directives, we need to be at the table with an open, constructive and thoughtful approach. The UK voice needs to be firmly but constructively heard”.

That is the authentic voice of the City, unlike what the mayor was telling us this week, although his motives may be slightly different. He may have personal ambitions rather than the ambitions of the City at heart, and I do not want to go into any piffle.

I now want to make a half point and will then make my final point. My half point is about our global role and the fact that rhetoric is no substitute for resources. What one needs for a global diplomacy is diplomatic boots on the ground: local knowledge, linguistic skills, a real understanding of local markets, and sensitivity to national customs and history. It would be an illusion to pretend that one can be global on the cheap, yet I fear that that is what the Foreign Secretary is being asked to do. If the noble Lord, Lord Howell, were ever to bump into the Chancellor of the Exchequer—as I suppose is conceivable—this is a point that he might want to make to him.

My bigger point about our global role is as follows. When I was a young member of the Diplomatic Service, I witnessed daily battles between the advocates of a blue water diplomacy based on the United States and the Commonwealth and the advocates of being at the heart of Europe. By the time I became head of the service, the battle was long over. All had recognised that the dichotomy was false. It was accepted—not least because our American and Commonwealth friends had gently and persistently reminded us—that we best advance the interests that we have in common with them when we exert maximum influence in the EU. The obverse, by the way, is also true. When in Washington, I discovered that we are heard with greater attention there when it is thought likely that we will be able to deliver EU support for deals that we strike with the Americans.

We do not have to choose—indeed, we must not choose—between a blue water and a continental strategy. They are mutually reinforcing and we need both. If we punch above our weight—in the uncharacteristically belligerent words of the noble Lord, Lord Hurd of Westwell—it is not because of any innate diplomatic skills but precisely because our foreign policy is woven from the twin, mutually reinforcing strands of worldwide reach and continental heft. That is why I can give only two cheers for talk of a new global role. It will deliver among emerging powers and new markets only if they perceive that we are at the heart of all key Brussels debates, building alliances in support of common, and Commonwealth interests, and that we are set to remain their natural influential and permanent point of entry into the 500 million-strong EU market. If we lose influence in Europe, we shall find it hard not to lose influence with them; and if we lose interest in Europe, we may find that they lose interest in us.