In the wake of the Paris attacks and the destruction of a Russian plane by a bomb in Sinai, Russia had been once more calling for a new level of engagement with Western partners over operations in Syria. Even an ‘anti-terrorism coalition’ appeared to gain traction after the terrorist attacks in Paris. But Russian attacks on Western-backed opposition groups in Syria and continuing violation of Turkish airspace narrowed the window of opportunity for engagement between NATO member states and Russia in Syria, and Tuesday’s incident – where Turkey shot down a Russian bomber − fundamentally challenged this option. NATO allies and Secretary General Jens Stoltenberg were quick to call for ‘calm and de-escalation’ of the situation. But they face a problem: in the absence of a strategy, NATO lacks a mechanism—a form of transparent process for crisis resolution—between member states and partner nations when and if a dispute or disagreement arises.

NATO has three essential core tasks—collective defence (Article 5), crisis management and cooperative security; it does not prioritize one task over the other. Whereas collective defence applies to member states like Turkey, cooperative security involves engagement with partner nations, such as Russia, to assure Euro-Atlantic security. NATO’s role, in this sense, goes beyond protecting a member’s state’s sovereignty. This aspiration to provide enduring cooperation and cooperative security beyond members lies behind the now-obsolete NATO-Russia Founding Act on Mutual Relations, Cooperation and Security, signed in 1997.

NATO’s balance between these tasks and its role vis-à-vis partner states is ill-defined, and among the core issues the Alliance must consider at or before its next summit in Warsaw in July 2016. These discussions must include prioritizing and grouping partner nations—Russia and Sweden, for instance, are clearly not partners in equal terms – and clarifying the role of the NATO-Russia Council (NRC). The NRC is a venue for political dialogue that includes consultation, cooperation and joint action, but does not have a crisis resolution mechanism. From 2014 onwards, the NRC has not functioned, yet it is the only venue where NATO and Russia could have discussions regarding the future of Syria, focusing on ISIS as a major threat both to the Alliance and to the partner nations. Neither Russia nor the Alliance will benefit from escalation; thus, both sides should bear in mind that a troubling partnership is better than an adversarial relationship.

This is even more important because NATO member states do not have a cohesive strategy regarding Syria’s future. For some countries, like Germany, the efforts lie on refugee relief policies, while for others, such as France, the focus is the military fight against ISIS. Russia is clearly testing NATO’s response mechanisms through hybrid warfare techniques. Yet, NATO also does not have a coherent policy regarding Russia’s assertiveness in Ukraine, involvement in Syria and its annexation of Crimea.  NATO officials are in general agreement that there can be ‘no grand bargain with Russia’ as long as it continues to violate international treaties and norms. Russian aggression and assertiveness is a long-term problem for the Alliance to tackle. So far, though, NATO benefits from ‘avoid[ing] that situations, incidents and accidents spiral out of control’, as the NATO secretary general noted in his speech after the extraordinary North Atlantic Council meeting. Solidarity among allies and protecting Turkish territorial integrity is a clear role for NATO, but the Alliance’s response mechanism in crisis situations should not be exhausted and undermined with small-scale, bilateral disagreements and disputes.

NATO could move to incorporate a crisis resolution mechanism, in specified non-escalatory terms and processes, between member states and partner states, where NATO member states and Russia meet together as equals in case of a crisis. This could re-establish a communication channel between NATO and Russia in particular, especially when the NRC is not functioning. If such a mechanism were in existence today, Turkey could have taken the issue to NATO’s crisis management system and pointed out its concerns over airspace violations, rather than shooting down the Russian bomber. This could have enabled the Alliance and Russia to participate in a dialogue that has been silent for more than a year. Instead, this incident demonstrates the delicate strategy of balancing deterrence policies with engagement between a member state and a rather troubling partner nation.

When Syria’s future is discussed, as it will be, at the Warsaw summit, Russia will be an unavoidable part of the discussion. But until there is a way to de-escalate these small-scale incidents, it will be increasingly difficult for Russia and NATO to determine whether they do in fact have any scope for cooperation, or at the least collaboration, on shared challenges and threats.

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Summary

• Chatham House brought together European, Asian and American policy-makers and experts over the course of a two-day scenario workshop in November 2015. The participants were asked to take part in a structured role-playing exercise imagining a potential near-future conflict between China and Japan over disputed islands.
• The findings of the workshop, and the actions of participants in the simulation, suggested significant differences between how the United States and Europe prioritize their interests in the Asia-Pacific. In particular, the perception was that the European Union and its member states consider challenges from their ‘near abroad’ as more tangible than those emanating from Asia, and that they focus on commercial opportunities in the region. In contrast, US foreign policy in the Asia-Pacific is seen as emphasizing strategic and geopolitical challenges.
• In terms of military capabilities, Europeans view themselves as having few assets to bring to bear in Asia. European, American and Asian observers are largely unaware of French and British military capabilities in or near the region.
• Beyond the military, Europe’s other tools of leverage – diplomatic, development, economic and other soft-power instruments – are also ignored. Europeans are often unaware of the activities of their own governments in the region. This is equally true in reverse – Japan’s engagement vis-à-vis European interests (such as with respect to Russia or Syria) is little recognized by Europeans.
• European nations prefer to engage unilaterally with Asia on trade and multilaterally, through the EU, on security and geopolitical issues. However, no ideal forum for multilateral coordination exists (given the fact that the EU is not a member of most Asian regional organizations).
• The US’s greater engagement in Asia reflects the fact that the US, unlike its European counterparts, is a Pacific nation. But it can also be explained by greater domestic public support for such engagement. This reflects the presence of significant numbers of US troops in Asia and the relatively high proportion of ethnic Asians in the US compared with the EU.

Early last month NATO launched a new maritime security mission, ostensibly to prevent people smuggling across the Aegean Sea. This mission, however, was not originally a reaction to the humanitarian catastrophe at sea. Instead, it was a response to growing Russian assertiveness.

A maritime patrol unit was first discussed in the North Atlantic Council in December 2015, when the Alliance agreed to provide a ‘tailored package of assurances’ to Ankara in a period of heightened tensions after Turkey shot down a Russian jet. The package included measures such as early reconnaissance planes (AWACS), air policing, naval presence in the Eastern Mediterranean, provisions for Maritime Patrol Aircrafts (MPA) and Intelligence, Surveillance & Reconnaissance (ISR), and port visits. None of the discussion at the time linked it with protecting refugees. Now framing this decision in that light creates a new mission for NATO’s Maritime Command (MARCOM), a mission that it has never conducted before.

Neither NATO’s founding documents or the most recent 2010 Strategic Concept provide for this type of mission, and NATO units are not trained to carry out an actual rescue mission. Protecting strategic assets and goods, such as oil tankers, escorting naval vessels providing food into conflict zones, deterring piracy and monitoring the Mediterranean for terrorist activity have been the main priorities for MARCOM in the post-Cold War period. These activities and maritime exercises were aimed at defence against non-state actors.

The positioning of NATO’s maritime fleet in the Aegean Sea to save refugees, however, has the potential to be used as a deterrent against Russia’s Anti Access/Anti-Denial capacity in the eastern Mediterranean. Russia, meanwhile, has increased its naval presence at the Tartus naval base in Syria, which it has used to support its air campaigns in Syria. This level of reciprocated military build-up is hard to sustain in the long-run.   

NATO−Russia tensions

Over the past few years, Russia’s assertive policies – its multiple military operations, the continuing modernization of its army and ‘simulated attacks’ such as the one in 2013 that tested Sweden’s air defence response mechanisms − have increasingly worried the Alliance and its partners. Clashing interests over Syria’s future and Russia’s attacks against the Western-supported rebel groups have also served to increase tensions between NATO member states and Russia. Recent analysis logged 60 dangerous incidents in the Euro-Atlantic area between Russia and NATO counties in the period between March 2014 and March 2015. NATO’s preparedness has been severely tested by these incidents, and has led the alliance to strengthen its presence on Europe’s southern flank.

Such increased tensions could create a situation whereby accidents and miscalculations lead to escalation. NATO forces and Russia are already engaged in further force posturing − the decision to accelerate Montenegro’s accession to NATO and the increased conduct of wartime exercises, such as NATO’s search for submarines in open waters (Dynamic Manta 2016), reconnaissance operations (Cold Operation 16) or Russia’s simulated exercises, for instance – which could undermine global stability. Three weeks after the Russian jet was shot down, a Russian patrol ship fired warning shots at a Turkish vessel to attract attention and avoid a collision. This event did not escalate but given the heightened tensions, similar events may spiral out of control.  

The tentative cease-fire in Syria is a confidence building measure that could normalize and rebuild relations. But further steps should be taken to establish political dialogue, open up the channels for potential meetings at the NATO−Russia Council, and increase transparency and risk mitigation in exercises and activities. The longer both sides wait, the more likely a confrontation will be.

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The US−UK ‘Special Relationship’ is in decline, and a British decision to leave the EU would hasten its demise. As Great Britain increasingly becomes just one of America’s many strategic relationships, Brexit would speed the transfer of US attention and energy from the UK to the continent. This, however, does not need to be inevitable. The necessary ingredient to reverse this decline is stronger British leadership internationally.

The US government has made it abundantly clear that its preference is to see the UK remain in the European Union. In January 2013, when David Cameron had not yet committed to a referendum, Phil Gordon, the US assistant secretary of state for European affairs bluntly stated that it is in the American interest for the US ‘to see a strong British voice in that European Union.’ The fact that a senior US official would go so far – to be seen to intervene so early in a divisive domestic political issue – spoke volumes about how important this is to America. This week, President Obama will visit the UK to send an equally firm, if polite, message to the British public.

Why does the US want the UK to remain in Europe?

From the US perspective, there are three principal elements that the UK brings to the table in the bilateral relationship. The first stems from Britain’s capabilities, particularly in the military and intelligence arenas. US−UK intelligence sharing, the closest for both countries, has a long history dating back to the Second World War. For good or ill the UK has been among America’s leading allies in every major conflict the US has been involved in for the last quarter of a century – in the Gulf War, Bosnia and Kosovo, Afghanistan, the war in Iraq, the interventions in Libya as well as current operations against ISIS in Iraq and, belatedly, Syria.

The second relates to the political value of having a reliable partner in international engagements – and thereby avoiding the perception of acting unilaterally. Shared history and values, and thus often perspectives (as well as capabilities) have ensured that the UK has long been the first port of call for the US when seeking to solve international problems or build coalitions. At the same time, Britain’s historical global reach and diplomatic experience around the world (not least in areas of current concern such as Afghanistan, Pakistan, Israel and Palestine, and Iraq) have provided American policy-makers with valuable input on foreign policy issues that has contributed to their own internal decision making.

The third area of added value for the US is Britain’s place in the EU. While British and US policy preferences may at times diverge, as they have recently on the Israel−Palestine issue, for example, their common outlooks and interests mean that Britain is the closest thing that the United States has to having a voice in the EU. At the same time, the US also sees the UK as the country most likely to support an open trade and investment agenda and a more proactive approach to dealing with the challenges in Europe’s neighbourhood, policies that leaders in both countries agree are necessary to make the EU a more effective actor and better partner to the US on the international scene.

The transition from US−UK ties to US−European ties

In recent years, however, the US has begun to diversify its relationships within Europe, in part as the UK has become unable or unwilling to step up and fulfil these three elements of paramount importance to the US.

Defence and intelligence

With regards to defence capabilities, it is no longer the UK that the United States inevitably looks to first. In Libya, the operation that started with the defence of Benghazi from Gaddafi’s forces in March 2012 (that eventually came to remove Gaddafi himself) was jointly led by the French and the British, although then-French president Nicolas Sarkozy appeared to be the driving force. More recently, it was the French with whom the US partnered in responding to the terrorist activities in Mali and who were first to support the US in action in Syria (following a UK parliamentary vote to stay out in August 2013 and a belated vote to act in December 2015). But in recent years others have worked more closely with the United States militarily as well, including in particular Poland and Denmark (although with the new government in Poland, the relationship might wither again).

This trend towards more diversified military engagement with other European states looks set to continue in the near term. Despite taking a tough position in the 2014 NATO Summit to reinforce the NATO commitment of two per cent of GDP spending on defence, the Cameron government came very close to falling below this line in 2015 (after five years of real defence cuts). The eventual decision to commit to meet this target, along with the newly released Strategic Defence and Security Review (SDSR), have somewhat reassured American policy-makers of the UK’s continued ambition and capabilities. But there remains a lack of US confidence that this is only a temporary uptick in UK attention on defence. Meanwhile, America will continue to expand its horizons.

The story on intelligence sharing is slightly different, but here too obstacles have arisen in the close US-UK exchange of information. Since the end of the Second World War, the US and UK have been part of the ‘Five Eyes’ alliance – with Australia, New Zealand and Canada – that allows the close sharing of intelligence. And arguably, within the Five Eyes, the links between the US and UK are the closest of all. However, more recently, tensions have emerged. Over the past five or so years, the British judicial system in particular has pushed back on US confidentiality rules in ways that make the US intelligence services nervous of continuing to share information; given the current close relationship, this could be more of an obstacle than it is for other countries sharing intel with the US.

At the same time, with the ISIS-inspired resurgence in the terrorist threat in both Europe and the US, it is becoming increasingly clear that the close intelligence sharing between the US and UK must take place much more widely. The current systems – through NATO or INTERPOL – have proven too slow and ineffective, as the recent attacks in Paris and Brussels have made clear. Sharing among the US and UK, or even among the Five Eyes, is insufficient – increasingly the relationships will have to be broadened.

Partnership

The US is also looking elsewhere for partnership in its international engagements, including on some of the issues that are at the top of the inbox for the American president.

On responding to Russian actions in Ukraine, it is clear that German Chancellor Angela Merkel is in the lead, both in corralling Europeans to maintain the sanctions but also in negotiating with Russian President Vladimir Putin. This was highlighted in the creation of the Normandy format in the summer of 2014, a group encompassing Germany, France, Russia and Ukraine (but not the UK or the US), to resolve the situation in the east of Ukraine. On another issue of significant import to the United States, European economic prosperity and stability, Merkel is again the leading actor in Europe.

In the case of targeted bombing in Syria, it was not the British that were first to join the United States in the offensive against ISIS, but instead the French. President Francois Hollande also proved far more proactive after Syrian President Assad crossed the chemical weapons ‘redline’ in 2013, although in the end France was left hanging when President Obama decided to step back from military action after the failure of the British parliamentary vote to authorize UK involvement.

Finally, on at least one issue of great import to the US – China – the UK appears to be diverging meaningfully. The most recent case – the UK decision to join the Asian Infrastructure Investment Bank in March 2015 – is perhaps the starkest example of such differing policy positions that have caused significant frustration in the US.

Influence in the European Union

With regards to Europe, even before the referendum was formally announced, it was increasingly clear that the UK was less inclined to engage proactively in the EU. A number of factors have ensured that, particularly since 2010, the UK has become less influential there.

British influence has been diminished through actions by the Cameron government that have, perhaps unnecessarily, antagonized many across the Channel. Many European conservatives became frustrated early in Cameron’s tenure when he decided to take the Conservative Party out of the principal conservative group in the European parliament, the European People’s Party. This sentiment only worsened in recent years as, albeit for perhaps understandable domestic political reasons, Cameron conducted an adversarial negotiation with his European partners in an effort to secure reforms to the EU and changes in Britain’s terms of membership.

The UK also no longer sends its best and brightest to EU institutions. Many of the leading British officials who once occupied high offices there have left and been replaced by other continental Europeans. This deprives Britain of an important source of influence within the EU.

It is clear that if the US wants influence in the EU, it needs more partners there than just the UK. Britain is still important, and would be a strong driver to make the institution more efficient, but as its influence declines it is no longer sufficient. A Leave vote would immediately dispose of that influence entirely.

The UK is ‘one among many’ for the US

What is clear is that increasingly the UK is not ‘first among equals’ in Europe but ‘one among many’ for the United States. America is diversifying its relationships. More and more the US can find other allies and friends to fulfil the needs in which the UK no longer has interest.

If the UK leaves the European Union, the pace of this trend will only quicken. In addition to needing to find alternative partners to address these policy gaps, the UK will likely no longer have the time to devote to the United States that it does today. If Brexit takes place, Whitehall will find itself inundated with issues which had previously been managed by the EU, from trade deals with third parties to negotiating constant market access adjustments with the EU. Thus, very quickly, British resources are likely to be pulled from the US portfolio, and issues of common concern will get drowned out by other agendas. At least for a while, the US will likely get short shrift.

America’s response then can only be to hasten its search for other partners both in Europe and beyond. And there lies an inevitable negative spiral for the Special Relationship.

Can anything be done to save the Special Relationship?

There is no question that the US and UK will continue to have a strong and positive relationship, but it is clear that, without action, either in or out of Europe, its ‘specialness’ will decline. As the arguments above lay out, the only question is how fast this demise takes place. But there is something that could not only halt, but also reverse this trend.

As President Obama made starkly clear in his interviews with Jeffrey Goldberg in the Atlantic, what he wants most from partners and allies is for them to step up – to show more leadership (a sentiment that the Republican candidates for president would push even further). With the perceived failure of interventions over the last 15 years – from Afghanistan to Iraq to Libya –many politicians and publics have become wary of foreign military intervention. This is true in Europe and the US; but Americans have often felt that they have been left holding both the bag and the blame.  

It should be noted that more leadership does not necessarily mean more military engagement. Or even, necessarily, more spending on foreign policy tools (whether diplomatic, military or development). But it does mean a willingness to step up and take responsibility for trying to guide international events and for promoting common interests.

In the UK’s SDSR released towards the end of 2015, the government stated its intention to remain fully engaged globally; however, its actions belie this. Where Asia is concerned – an issue that is front and centre for the US – the UK joins other European powers in arguing that its lack of resources in the region makes it unable to contribute meaningfully to maintaining stability. Even closer to home, in the Middle East, the UK has been wary of leading.

It is understandable why the UK is hesitant to take such a leadership role, even as part of a coalition, in some of the larger strategic challenges the world faces. There are few benefits. Merely finding the human capital to coordinate an international response is difficult. The complexity of these problems ensures they rarely work out as hoped, and more often lead to international contempt rather than approbation. Thus it is no great surprise that the UK, along with much of the rest of the world, resists the temptation to be out in front. But there are opportunities – two issues that the US would likely welcome greater British leadership on would be building support in Europe for the Transatlantic Trade and Investment Partnership and taking a more active role in maintaining stability in Asia. Further, having a stronger European partner on issues in the Middle East (from Yemen to Syria) – Europe’s near abroad – is something that many American policy-makers have suggested. 

But the UK would not have to stand alone. With a little leadership from the UK, the US would provide support, as would many others currently loath to take the lead but with very strong interests in the outcomes. But someone has to start; as Obama made clear, there needs to be less ‘free riding’.

If the UK wants to reverse the decline of the Special Relationship, it will need to show more leadership internationally. This should not be as hard as it might seem. Not only does it conform to the government’s own strategy (as laid out in the SDSR) but public concern over further interventions is weaker than one might imagine. Such a leadership role would once again show to the United States the value of the Special Relationship.

This article has also been published by Real Clear World.

To comment on this article, please contact Chatham House Feedback

The NATO Summit, to be held this July in Warsaw, will provide an opportunity for NATO to review its progress towards meeting both the new and more traditional challenges it faces. It will also make clear the political will, resources, priorities and direction of the alliance in the coming years. In light of resurgent geopolitical concerns, new and evolving challenges and long-standing structural anxieties, the summit is an important moment to review progress and define a new path forward.

Building on workshops held over the previous six months, the US and the Americas Programme at Chatham House, jointly with the Polish Institute for International Affairs (PISM) and the Center for War Studies at the University of Southern Denmark are convening an expert roundtable to provide insight and analysis towards answering these questions.

Attendance at this event is by invitation only.

 

Summary

• The United States’ transatlantic allies need to appreciate how its global leadership is changing and what this means for their interests, and respond accordingly. Notions of US decline have been overstated, but the country is not going to play the same international role in the future that it has previously.
• As the United States’ international engagement changes, Canada and Europe should increase coordination with it to prevent power vacuums from emerging. The transatlantic allies should work together to build greater links at all stages of the policy process, from perceptions of threat, prioritization, analysis, threat definition and policy formation to implementation and action.  
• As the United States’ capabilities adapt to its changed circumstances and role, so too must those of its allies. This adjustment must go far beyond military aspects to enhancing diplomatic, energy, economic, intelligence and other resources.
• In addition to the challenges around differing interests, priorities and capabilities inherent in any alliance, Europe appears to have lost its confidence. In part this is due to its growing disengagement and introspection. But Europe retains huge potential for influence if it uses its resources effectively. There is much that European states can do, individually and together, to take more control over advancing their strategic interests. Equally, by working together they can do much to nudge the United States in helpful directions to support the mutual interests of all parties.
• The conversation on reforming global institutions such as the IMF must move beyond the need for change per se towards articulating the actual shape of such changes. Europe and Canada will likely need to push the United States into accepting reform of these institutions to better reflect today’s reality and tomorrow’s challenges. Global institutions need more diversified leaderships if they are to ensure their long-term legitimacy and influence. This will be difficult to push through politically in the United States, but by working with new regional and global powers to propose reforms, Europe and Canada can help find an acceptable solution.
• The use of ad hoc coalitions does not necessarily damage the efficacy of broader consensus institutions such as NATO. In fact, flexible coalitions may often be desirable when solutions to new challenges need to be developed and agreed quickly.
• Canada and Europe should consider partnering with other actors besides the United States where necessary. This may be expedient for meeting individual objectives, and would have the secondary benefit of demonstrating to emerging powers that the West does not exclude cooperation with others out of an arbitrary loyalty to the United States.
• Europe needs to appreciate the potentially dire consequences of failing to adapt to changing US leadership and an increasingly complex world. There is a real chance that the European project could unravel in the next few years due to external and internal pressures. While many European policy-makers display an understanding of these challenges in private, in public there is little appetite for taking the decisions necessary to bring long-term stability to the continent. 

A British exit from the EU would add to growing strains on the United States’ relations with Britain and the rest of Europe, but by itself would not lead to a breakdown in transatlantic relations due to the scale of shared ideas and interests, institutional links, international pressures and commitments by individual leaders. It would, however, add to pressures on the US that could change the direction of the transatlantic relationship. From the perspective of Washington, Britain risks becoming an awkward inbetweener, beholden more than ever before to a wider transatlantic relationship where the US and EU are navigating the challenges of an emerging multipolar world. The article outlines developments in the UK, EU, Europe and the US in order to explain what Brexit could mean for the United States’ approaches to transatlantic relations. By doing so the article moves beyond a narrow view of Brexit and transatlantic relations that focuses on the future of UK–US relations. In the conclusion we map out several ways in which US views of the transatlantic relationship could be changed.

While the American election cycle could be perceived as an occasionally amusing distraction, the rise of new factions and sentiments among the electorate will have an impact not just in America’s domestic politics but also with respect to its role in the world. Recent polling by the Pew Research Center shows clearly the desire among many Americans for a different international engagement for the US, one that could have significant implications for America’s allies.

Polling

To date, the campaign rhetoric of both the Republican and Democratic contenders for the White House has raised questions about America’s continuing global commitment.

But what does the public think? The Pew Research Center has recently released its periodic survey of how Americans view America’s place in the world. The results suggest that stereotypes of Americans’ isolationism or protectionism do not capture the nuance in public sentiment. Wariness of international engagement coexists with assertiveness on some issues and a belief that the US is a force for good in the world. And these views often divide along partisan lines and between generations.

A majority of Americans (57%) think the U.S. should deal with its own problems and let other countries deal with theirs as best they can, a sentiment that has increased from 46% in 2010. Moreover, roughly two-thirds say ‘we should not think so much in international terms but concentrate more on our own national problems’. In part this may be the case because a plurality of Americans thinks the United States does too much (41% too much, 27% too little) in helping solve world problems.

The fact that six-in-ten Americans believe that problems in the world would be even worse without US involvement will not reassure many non-Americans who care deeply about how and where the US is engaged, not just that it is.

American isolationism is a partisan affair. Republicans (62%) are far more likely than Democrats (47%) to voice the view that the US should deal with its own problems. Notably, about two-thirds of registered Republicans or Republican-leaning independents who favour Donald Trump (68%) express such isolationist sentiments, as do more than half of the Democratic backers of Sen. Bernie Sanders (54%). At the same time, over half of registered Democrats and Democratic-leaning independents who favour Hillary Clinton (52%) believe the US should help other countries deal with their problems.

The US has often been seen by its allies as acting in a unilateralist fashion, but the polling is more nuanced than this. About half (51%) believe that the US should take into account the views of its major allies when deciding its foreign policies. However, of more concern for America’s allies (and potentially adversaries), roughly four-in-ten (42%) believe Washington should go it alone in international matters.

Despite Trump’s criticisms, 53% of the American public holds a positive view of NATO and 77% voice the view that US membership in the security alliance has been a good thing for the United States.

In addition to some wariness with regards to engaging internationally in security arenas, Americans are also generally wary of global economic engagement – protectionist sentiment is rising. Only 44% believe such US involvement is a good thing; more (49%) say such engagement is bad, lowering wages and costing jobs. These views also differ along partisan lines with more on the right than left thinking US involvement in the world economy has been a bad thing. Trump supporters are even more against economic globalization.

Rising scepticism

The results do not show an unambiguous move towards more American isolationism or unilateralism. But the trends broadly show that the American public is moving towards, as President Obama put it in 2012, a focus on ‘nation building at home’. It should come as no surprise – President Obama has presided over a period in which the US has increasingly limited its extraterritorial ambitions to those that more directly affect its vital national interests. It is therefore worth noting that this more limited engagement is one that is, broadly, supported by the public on both sides of the aisle.

There are, as have been noted, partisan differences. But the next president will govern over all Americans not just those from their own party. They will have to function in the context of an American public, the majority of whom wants the US to deal with its own problems, letting other countries manage as best they can. While who becomes president clearly matters – they have the capacity to lead their populations in certain directions - the rising scepticism among many Americans for investing in the globalized world will resonate regardless of who takes office.

The implications for America’s allies are significant. For those issues that are not directly of concern to the United States, longstanding partners are going to have to find ways to manage on their own or with less American support. And even on those issues that are of direct national interest, they might find the US less sensitive to their interests and concerns. This could hold true not just in the realm of security but on economic issues also – if America becomes more protectionist, others will surely follow.  

Many of America’s allies have perceived the United States to be an unreliable ally in recent years. Asian partners, such as Japan and South Korea, have started to take more responsibility for their own security and are working to build additional partnerships with neighbours. European allies have been, at times, disappointed by what they perceive to be a less engaged America, such as in Libya and Syria. If the next president follows the public majority, these allies will need to get used to this new role for the United States.

This article has been published jointly with Real Clear World.

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• Chatham House brought together 32 participants over a two-day period in February 2016 to discuss the US and European responses to a simulated scenario in which alleged actions by Iran threaten the sustainability of the nuclear deal. This was the second of four scenario roundtables (the first involved a conflict between China and Japan).
• Despite the inherent challenges in the initial scenario the transatlantic partners in the simulation were able to retain a strong joint position in their negotiations with Iran throughout the scenario. The principal factor enabling the US and Europe to maintain their joint negotiating position was the framework of conditions provided by the Joint Comprehensive Plan of Action (JCPOA), which mandated specific actions, responses and timelines if events threatened the agreement. When in doubt, all parties in the simulation reverted to the agreed framework.
• The Europeans in the simulation seemed to view any indirect consequences of the nuclear deal as mostly positive whereas the Americans largely saw the externalities as negative. Equally, the scenario showed Iran as having different approaches towards the US and Europe respectively: willing to engage with the latter, while keeping the former in the cold.
• The greatest tensions occurred between EU member states, mainly in relation to differences over process rather than policy. Domestic factors in the US and Europe could, in the future, make maintaining a joint position towards Iran increasingly hard. In particular, potential stumbling blocks include immigration and social policies in response to the migration crisis in Europe; and, in the US, the significant political polarization around the E3/EU+3 deal.

With Britain’s decision to leave the EU, the clouds of uncertainty hanging over the proposed US-EU free trade deal (known as the Transatlantic Trade and Investment Partnership or TTIP) have become darker. The negotiations were formally launched three years ago and have stalled because of transatlantic differences (for instance over issues of investor protections and public procurement) as well as growing public opposition. For now, both the US and the EU negotiators are determined to weather the storm and continue talks when they meet in Brussels from 11-15 July.

The result of the UK’s EU referendum will blow a strong wind into the face of TTIP negotiators on three fronts. First, the Brexit vote will delay the TTIP talks as EU officials will focus their attention and political capital on the future UK-EU relationship. Once the UK government triggers Article 50 of the Lisbon Treaty, both sides have two years to sort out the separation proceedings. Only after it has become clear what Britain’s relationship with the EU will look like will the European side stop navel-gazing. The TTIP negotiations will likely continue in the meantime, but will be put on the back-burner.

Second, any progress on TTIP will require clarity on what both sides are bringing to the negotiating table. But until the final nature of the UK-EU relationship is known, it will be difficult for the American side to assess exactly how valuable the access to the remaining EU market is. This raises the question of whether American negotiators will put forth their best offers if they don’t know what benefits they will obtain for making concessions.

Third, with Britain’s vote to leave the EU, TTIP has just lost one of its greatest cheerleaders. French and German officials are increasingly expressing concerns about TTIP. Within three days of the Brexit vote, French Prime Minister Manuel Valls dismissed the possibility of a US-EU trade deal, stating TTIP was against ‘EU interests’. In addition, 59 per cent of Germans oppose TTIP – up from 51 per cent – according to the most recent Eurobarometer survey. Britain’s voice for further trade liberalization will be sorely missed by American negotiators eager to strike a deal.

Despite the dark Brexit clouds on the TTIP horizon, there might be a silver lining. Britain’s decision to leave the EU could bring some benefits to the US-EU trade talks in two ways. First, financial services regulation might no longer be a sticking point in the TTIP negotiations. Given London’s role as a financial centre, the UK had insisted on including a financial services chapter in the trade deal. The US, however, has resisted this. The removal of this friction could help move the TTIP negotiations along.

Second, European trade negotiators will no longer have to address British fears that TTIP could put the National Health Service (NHS) at risk. Much of the TTIP-debate in Great Britain has focused on how this deal might impact the NHS. Opponents of TTIP have argued that including healthcare in the agreement could lead to privatization and ultimately the death of the NHS. EU Trade Commissioner Cecilia Malmström spent resources and energy in correcting these misconceptions. UK withdrawal from the EU means that she can now focus on fighting other myths surrounding TTIP, which could potentially help advance the trade deal.

For now and the immediate future, Britain will remain a member of the EU and the European Commission will continue to negotiate trade deals on behalf of all 28 member states. Both the US and EU negotiators are committed to advancing the trade deal despite Brexit. The British decision to leave the EU has not weakened the case for TTIP. Speaking on the outcome of the EU referendum, United States Trade Representative Michael Froman said ‘the economic and strategic rationale for TTIP remains strong’. And his counterpart Cecilia Malmström went even further, saying that the British decision to leave the EU creates more of an impetus for TTIP to be finished this year.

Though this timeline is unlikely to be met, TTIP is likely to survive the British decision to leave the EU. However, Brexit is a serious blow that will probably push back the conclusion of TTIP by at least two years. Any deal will need to take into account the future nature of the UK-EU trade deal, which may not be known before 2018. Meanwhile, elections in Germany and France (two countries with strong public opposition to TTIP) will take place in 2017. On the other side of the Atlantic, the US presidential election adds yet another layer of uncertainty as the trade policy of the next administration remains unknown. When US and EU trade negotiators meet again this week, they should not be too worried about the Brexit storm but rather the changing climate for TTIP in France, Germany and the US.

To comment on this article, please contact Chatham House Feedback

Summary

• The Transatlantic Trade and Investment Partnership (TTIP) – currently being negotiated between the United States and the European Union – represents a bolder and riskier approach to liberalizing trade than traditional trade deals. It is bolder because it aims to cover a wide range of policy issues that are not typically included, and because it aims to be strategic and extraterritorial in its impact. It is riskier because of the difficulty in getting agreement on these issues between the parties concerned, and because the responses of other countries are uncertain.
• EU and US negotiators have much work to do if a deal is to be reached that realizes TTIP’s full potential. While progress has been made on tariff reduction, considerable ground still needs to be covered on setting standards and regulations affecting trade, which is where TTIP has the most potential to make an impact at a strategic level. Meanwhile, trade scepticism is rising on both sides of the Atlantic, with concerns about the impact of deals like TTIP on jobs and regulatory standards. The negotiation process is also now complicated by the United Kingdom’s decision to leave the EU. Making a clear and credible strategic case for TTIP may be necessary if the negotiations are to continue and be successful.
• If the United States and the EU are able to agree on the regulations and standards affecting international trade, they will have the scale to define these globally for years to come. International leadership in this area brings commercial advantages and benefits for consumers in the EU and the United States, and it also often is a global public good. However, it sometimes pits EU and US interests against those of other countries, creating scope for conflict over policies in areas such as the rules governing state-owned enterprises.
• There would be benefits to the United Kingdom, the EU and the United States if the United Kingdom joins TTIP once it is agreed. In the intervening period, it makes sense for the United Kingdom to participate actively in EU decisions regarding TTIP while still a member of the EU, as this could help to smooth an eventual British accession to the partnership.
• The soft-power benefits from TTIP are potentially substantial, but they would only be maximized if other strategically important countries, such as Turkey, are able to join. Perhaps the clearest sign of TTIP being likely to meet or exceed the highest ambitions for its strategic impact would be if it has an even broader geographical reach, drawing in countries in other regions.
• The potential security benefits from TTIP are marginal and overhyped. The benefits that unity on trade would bring to transatlantic security are intangible and hard to substantiate. The energy security benefits are likely to be limited, as the volumes of US liquefied natural gas (LNG) exports to the EU are likely to be small. If the EU and the United States are serious about using TTIP to improve security, they should include defence procurement, but this has never been on the agenda.
• Not only do the differences between the EU and the United States mean that it will be difficult to get a deal, they also constrain how any deal would be implemented and exploited for strategic purposes. If TTIP is to succeed at a strategic level, both sides must be disciplined, consistent and coordinated in using it as the reference point in their negotiations with other countries. 
• The United States is more capable of acting strategically than the EU, in part because of the difficulties for EU member states in coalescing around a shared set of strategic objectives. Until the EU is able to do this, the United States is likely to have much more influence over the strategic direction of TTIP. If the EU wants to bridge this gap, then the European Council should start by reaching a political agreement on its objectives and priorities for bringing other countries into TTIP.
• There are also strategic risks from TTIP. One is that by emphasizing the values that are reflected in international rules, the EU and the United States could make it harder for other countries to accept these rules, or make TTIP seem like an attempt to reassert the old world order. Thus, instead of having a magnetic effect, TTIP could create a rift with emerging countries, with some choosing to maintain a distance for political reasons.
• The bigger risk for TTIP, however, is failure. If negotiations break down or a deal is reached that falls short of the ambition set for it, this would send a damaging signal to the rest of the world about the inability of the EU and the United States to work together. The damage would be all the greater if the process was acrimonious, or if it exposed US indifference to Europe or latent anti-Americanism in the EU. The United Kingdom’s decision to leave the EU raises the stakes, particularly for the latter, as it is a blow to the international credibility of the EU. Agreeing TTIP would help to offset this blow, while failure would amplify it.

The British vote to leave the EU is (and should be) seen as a wakeup call for political elites on both sides of the Atlantic. Under normal circumstances, the institutional support that crossed party lines for the Remain campaign should have ensured it a comfortable victory; instead, it lost by a not-insignificant 52−48 per cent margin. Similarly, Donald Trump has alienated the establishment of both American parties – while Democratic dislike is predictable, the extent of the Republican elite’s discomfort with Trump, clearly on display at the party’s convention in Cleveland this week, is extremely unusual at this point in an election campaign which is more typically a display of ‘rally around the candidate’. But as Brexit demonstrated, the conventional logic may not apply in 2016.

There are significant differences between the UK referendum and the US elections. Some of this is structural – a national referendum operates along very different lines than a US presidential election, after all, and the US electorate is much larger and more diverse than its British equivalent. Furthermore, American voters will be making a choice between individuals as well as ideas. This does not necessarily work to the advantage of either Donald Trump or Hillary Clinton (both of whom have the highest unfavourability ratings for presidential candidates seen in decades), but highly individualized questions of personality and temperament will impact voter behaviour in a way that they did not for British referendum voters. Finally, who wins the US election will depend in very large part on state politics and electoral college math – as the 2000 election showed, the candidate who wins the popular vote does not necessarily end up as president.

But there is a far more important message that politicians in the US, UK and, more broadly, Europe, should take away from the Brexit result. Regardless of what happens in the US elections, elites no longer necessarily hold the preponderance of power. The disenfranchised who have historically either not had the mass or the coherence to communicate it now do - at least on occasion.

This is not an ideological split – Brexit voters came together from all parts of the political spectrum. Equally, in the US, Sanders and Trump voters are bucking the system in both the Democratic and Republican parties.

There is a significant backlash under way in both countries towards aspects of globalization, going beyond the traditional right/left divide. Allowing for some differences in specifics, the American and British political establishments have, over the past few decades, broadly eased restrictions on the free movement of capital, goods and people across national borders. There have been notable benefits associated with this approach that have mostly been distributed inclusively, but the costs have typically hit those already less advantaged and without opportunities or skills to mitigate them. Those who have been left out or left behind from these changes are discovering their own political power.

Politicians are going to have to find ways not just to appeal to these voters who feel disenfranchised by existing structures, but also address their legitimate concerns. There will of course be partisan policy solutions put forward on both sides. But inevitably the political leadership is going to have to find ways to bridge party lines to realize solutions to those social and economic inequalities. Ignoring them, as many have in the past, is increasingly a quick path to losing power.

Unless the world wants to turn back to more isolationist and protectionist times, with the slower growth and inequalities that this includes, politicians are also going to have to do a better job of explaining the benefits of globalization. And, more importantly, they will have to ensure that these benefits reach their broader population more equitably and that the costs are better mitigated. 

So the Brexit vote does not necessarily presage a Trump victory on 8 November, but it shows in stark terms that the world has fundamentally changed – the time when elites alone could call the shots is gone. Politicians, including Hillary Clinton, will need to respond proactively to the causes of the dissatisfaction rather than waiting until the next time they need the public vote.

To comment on this article, please contact Chatham House Feedback

Summary

• Chatham House brought together 22 participants over a two-day period in May 2016 to discuss US and European responses to a potential conflict between Turkey and Russia. This was the third of four scenario roundtables (the first two involved a conflict between China and Japan and a potential breakdown in the Iran nuclear deal, respectively).
• The scenario was designed and the roundtable took place before a number of crucial subsequent developments, including the partial restoration of Turkish/Russian relations, the British vote to leave the European Union (EU), and the attempted coup against Turkish President Recep Tayyip Erdoğan. This paper should be read and understood in that context.
• In our simulation, the United States and Europe worked closely together, with cooperation particularly in evidence between the US and Germany. While the US was slightly more willing than Europe to threaten sanctions against Russia, transatlantic unity was not seriously threatened by a Turkey/Russia conflict.
• Western states were wary of bringing NATO into the picture for fear that this would be perceived as militarizing an already tense situation. The EU was also sidelined in favour of more ad hoc negotiating strategies.
• Russia was effective in using international law to defend its position, even as it took steadily more aggressive action in Syria. Neither the West nor Turkey deployed an effective countermeasure to this tactic.

Even though President Barack Obama cautioned that the UK would be at the ‘back of the queue’ for a trade agreement with the US if the country chose to leave the EU, in the post-Brexit world a deal might be struck more swiftly. Various ideas for bringing the UK and US into a formal trade arrangement have been floated – ranging from a bilateral UK-US trade deal, or the UK joining NAFTA (the North American Free Trade Agreement between the US, Canada and Mexico), to the UK becoming a part of the TPP (the Trans-Pacific Partnership that the US is pursuing with 11 other countries along the Pacific Rim). However, one option stands out: opening the Transatlantic Trade and Investment Partnership (TTIP), which the US and EU are currently negotiating, to the UK after Brexit.

Good reasons for Britain in TTIP

First, from the perspective of the UK, signing up to TTIP would mean a more comprehensive deal with the US than a bilateral UK−US trade agreement. For instance, Britain is very keen to include financial services regulation in any trade agreement with America, but given Washington’s reluctance, this ambition might only be achievable if other countries like France and Germany throw their financial weight into the negotiations.

Second, continuing involvement in the TTIP negotiations allows London to begin securing its trade position with the US now. Though its influence in the EU may weaken as it heads for the exit, Britain could make the best use of influencing the EU position on TTIP while it is still a member. It could then accept the terms of TTIP and accede as a third party relatively quickly after exiting the EU. Official negotiations on a UK−US-only deal would have to wait until the UK has left the EU, as trade talks fall under the exclusive competence of the EU.

Third, for the US and EU, having the UK as a party to TTIP would ensure the scale of the deal is not reduced, and thereby maintain the strategic appeal and ability to set global standards. At the moment, the UK is the EU’s second-largest economy, accounting for approximately 18 per cent of GDP. With Britain in TTIP, the sheer size of the transatlantic market space will have more pull for other countries to adopt the common transatlantic rules in order to gain market access.

Fourth, the UK joining TTIP as a third party would establish the agreement as an ‘open platform’ that is available for other countries to join. Michael Froman, the United States trade representative, has characterized TTIP as being such an open agreement. EU representatives have been more ambivalent, though this is starting to change in the wake of Brexit. David O’Sullivan, the current EU ambassador to the US, recently said that as ‘we’ve always seen TTIP as a potential open platform, [the] UK could still benefit [from it] even not as a member of the European Union’. While now might not be the right time to expand the TTIP bloc beyond its original participants given that negotiations are already complex and drawn out, it would be beneficial for the negotiating partners to send a strong message that countries that are willing and able to commit to the high TTIP standards will be welcomed later on.

Obstacles to Britain in TTIP

But before the UK could be added to TTIP after Brexit, major hurdles will have to be jumped and crucial questions answered. The first obstacle is actually getting a TTIP deal, which will require significant efforts by political leaders and negotiators on both sides of the Atlantic.

Second, selling the ‘UK in TTIP option’ to Brexiteers will not be an easy task. After all, Leave campaigners argued that the US−EU deal might undermine the NHS and was thus presented as one of the reasons to cut loose from Brussels. As the major rationale behind TTIP is regulatory harmonization, if the UK were to sign up to TTIP it would still have to apply many EU rules. This, however, would go counter to the arguments for leaving the EU in the first place.

Third, it will be a challenging job for the UK to untangle its trade relationship with the EU while at the same time negotiating TTIP together with the EU. It would be easiest if the UK decided to remain a member of the EU customs union. Britain would then be required to impose the EU’s external tariffs on countries like the US. This would fit seamlessly with the ‘UK in TTIP’ option. But as the UK will most likely pull out of the customs union, it will be more complicated than that.

Finally, the timing of Brexit and the TTIP negotiations could cause complications. In the unlikely event that a US-EU free trade deal is concluded and ratified while the UK is still a member of the EU, the agreement (or the parts of it that fall under national competence) would most likely continue to apply to Britain after Brexit without the need for accession. If the TTIP negotiations continue beyond Brexit, then the UK would move from negotiating as part of the EU bloc to becoming a third party. This raises the issue of whether the UK and EU continue to negotiate as one bloc vis-à-vis the US.

Special economic relationship

Still, the depth of the economic ties between the US and UK means that the TTIP option is likely to be welcomed favourably by both countries. The US is the most important single export market for the UK, with goods and services worth £45 billion shipped in 2015. Last year, the US ranked third (after Germany and China) as a source for UK imports. With nearly $1 trillion invested in each other’s economies, the US and the UK are also each other’s largest investors. Given this special economic relationship, Britain is unlikely to be at the ‘back of the queue’ in any event. But the TTIP option is the best path to preserving and strengthening the relationship post-Brexit while also realizing the wider strategic benefits of a transatlantic trade agreement.

A version of this article appeared on Real Clear World.

To comment on this article, please contact Chatham House Feedback

Our September issue marks a return to IA’s typical range and breadth of coverage, after the July special issue on China and May’s section on Brexit. In the featured article for this issue, Sara E. Davies and Belinda Bennett examine the gender differential in health outcomes for victims of the Ebola and Zika crises. They highlight the disproportionate impact that such crises have on women, not only from a health perspective but also in terms of economic andsocial factors. In particular, they analyse the ‘women-specific advice’ which was distributed during the Ebola and Zika emergencies, revealing the incorrect assumption of gender equality in the regions affected. Their article reasserts the importance of gender-sensitive policy-making on the part of the governments and NGOs which respond to global health emergencies. Elsewhere in the issue Robert Falkner provides an initial reflection on the 2015 Paris Climate Change Agreement, while Michele Acuto and Steve Rayner demonstrate the growingrole of global ‘city networks’ in international diplomacy. African countries are the focus of three articles: the use of Information Communications Technology by government authorities in Somaliland is assessed by Alice Hills; Kristof Titeca and Daniel Fahey look at differing representations of rebel groups in the Democratic Republic of Congo; and Alex Vines contributes a review article on Angolan politics. These are just a selection of the many fascinating pieces of research in our new issue. Several of the authors have contributed supplementary commentaries related to their articles, which will be published over the next month on our Medium blogsite. Follow our profile by clickinghere, and keep up with the latest International Affairs news, content and editorials.

Economic populism is on the rise on both sides of the Atlantic. In the US, both Donald Trump and Bernie Sanders have made protectionist arguments and appealed to voters who feel left behind by globalization. In Europe, left-wing groups like Syriza in Greece and Podemos in Spain as well as far-right groups like France’s Front National, Germany’s Alternative für Deutschland (AfD) and the UK Independence Party are capitalizing on the anti-globalization mood.

Manifestations of the current anti-trade and anti-globalization movements include opposition to trade initiatives like the Transatlantic Trade and Investment Partnership (TTIP) and the Trans-Pacific Partnership (TPP) as well as populist calls for an end to the austerity measures and economic reforms that were introduced in the wake of the euro crisis. There have been questions regarding whether capitalism can respond to the rise in inequality seen in many Western states. Many populists also share a distrust of those they perceive as elite policy-makers and a desire to reclaim national sovereignty from international institutions. Thus, the rise of populism could have far-reaching consequences for trade and economic policy-making and the existing trade and broader economic architectures.

The US and the Americas Programme at Chatham House and the German Marshall Fund of the United States in cooperation with the Konrad Adenauer Stiftung will convene an expert roundtable to provide insight and analysis geared towards examining key drivers behind the rise of economic populism, its implications for the international economic system, and possible ways to mitigate the effects of populism in the economic arena.

Attendance at this event is by invitation only. 

The Chatham House Rule

To enable as open a debate as possible, this event will be held under the Chatham House Rule.

With Donald Trump in the White House, US trade policy will probably look very different from the past 70 years - seven decades across which successive Republican and Democratic administrations have participated in and led global trade liberalization initiatives. If the president-elect delivers on his major campaign promises on trade, the negative effects on the American economy would be severe and the United States would give up its role in shaping the global trading system.

But there is no need to panic. Trump will likely leave behind the rhetoric of the campaign trail once he sits in the Oval Office. Trump will probably moderate his proposals, because a faction of the Republican-dominated Congress continues to support free trade. He might also be reined in by his team, though that depends on who best catches the ear of the president: individuals such as Vice-President-elect Mike Pence, who has supported free-trade agreements in the past, or trade-skeptical advisors such as Dan DiMicco, who now heads the transition team for the Office of the United States Trade Representative. 

So what does the Trump presidency actually mean for trade?

Trump won’t likely follow through on his most extreme plans, such as leaving the World Trade Organization. But he will lead a more protectionist United States that focuses on its trade deficits – with particular attention being paid to China and Mexico. Trump will probably impose tariffs on imports from those countries; however, duties will be lower than the mooted 45 per cent and 35 per cent, respectively. With regards to China, Trump will probably bring trade cases against Beijing’s subsidy arrangements and look into alleged currency manipulation (even though most economists accept that the renminbi is no longer undervalued).

Given the prominence of the North American Free Trade Agreement on the campaign trail, Trump will have to address the deal with Canada and Mexico. Whether that means renegotiating or pulling out remains to be seen. One thing is certain: Trump will not move forward with mega-regional trade accords such as the Trans-Pacific Partnership or the US-EU Transatlantic Trade and Investment Partnership. Those would-be pacts are a lost opportunity, but this is not the end of the trade world. Trump will focus instead on striking trade deals with individual countries. One such potential bilateral trade deal could be a US–UK agreement, which Trump and his advisers, despite the prognostications of the current president, see at the front of the queue.  

Opportunity to rethink the trade framework

The fact that Trump is not necessarily against free trade per se bears hope. And there is another silver lining in the dark cloud hanging over trade. Trump has pointed to some valid concerns about the current trading system. His victory can be an opportunity to address these shortcomings. 

NAFTA does need an update. The agreement entered into force in 1994 - before the internet took off. Thus, provisions to include standards to protect digital freedoms could modernize NAFTA and expand its scope to cover 21st century economic issues. In addition, labour rights and environmental protections were not included in NAFTA but were incorporated into side agreements with weak, unenforceable provisions. By better addressing labour and environmental issues, NAFTA could be significantly upgraded.

Trump will aim to tackle unfair competition and look to enforce existing trade deals more vigilantly. This is another important and legitimate issue, and could be tackled in conjunction with European allies. The European Commission has recently proposed redesigning and updating its trade defence instruments because non-market economy practices and state intervention by some WTO countries - for example, China’s overcapacity in the steel sector - have hurt domestic industries. Without action by major players such as the United States or the European Union, China would have no incentive to reform its distortionary policies. Trust in the rules-based trading system requires that existing trade agreements are properly and fairly enforced.

Trump’s win highlights the need for better compensation for those who have felt the adverse effects of trade. His victory was partly fuelled by tapping into economic anxieties and appealing to voters who feel left behind by globalization. Better mechanisms to cushion the blows to the losers of globalization are indeed required. In the United States, Trade Adjustment Assistance has been insufficiently funded and is ineffective. More needs to be done to replace the wages of workers whose jobs have been lost due to trade and to provide them with skills training for re-employment. This reconsideration of assistance for those who are hurt by free trade could provide a foundation for the future. Once the current wave of anti-trade sentiment subsides, new trade agreements can be struck that don’t leave so many citizens feeling left behind. 

Instead of worrying about how Trump might blow up the underpinnings of the global trading system, this is an opportunity to rethink what a new trade framework might look like.

This piece was published in collaboration with Real Clear World.

To comment on this article, please contact Chatham House Feedback

The liberal international order has always depended on the idea of progress. Since 1945, Western policymakers have believed that open markets, democracy and individual human rights would gradually spread across the entire globe. Today, such hopes seem naïve.

In Asia, the rise of China threatens to challenge US military and economic hegemony. In the Middle East, the United States and its European allies have failed to guide the region toward a more liberal and peaceful future in the wake of the Arab Spring. And Russia’s geopolitical influence has reached heights unseen since the Cold War, as it attempts to roll back liberal advances around its periphery.

But the more important threats to the order are internal. For the past half-century, the European Union has seemed to represent the advance guard of a new liberalism in which nations pool sovereignty and cooperate ever more closely with one another. Today, as it reels from one crisis to the next, the EU has stopped expanding.

Other countries will probably not follow the United Kingdom out of the EU. But few European leaders appear willing to continue relinquishing sovereignty, whether to manage flows of refugees or to ensure the long-term viability of the single currency. Many European politicians are demanding more national sovereign control over their destinies rather than more integration.

Across the Atlantic, the US commitment to global leadership, which until now has sustained the liberal international order through good times and bad, looks weaker than at any point since the Second World War. After the costly wars in Afghanistan and Iraq and the chaos that followed the intervention in Libya, President Barack Obama consistently encouraged allies in Europe and the Middle East to take greater responsibility for their own security. In his presidential campaign, President-elect Donald Trump twisted this argument into an explicitly transactional bargain: America would become a mercenary superpower, protecting only those countries that paid, so that it could focus on making itself great again at home. In so doing, he ignored the hard-won lesson that investing in the security of its allies is the best way of protecting America’s own security and economic interests.

Meanwhile, America’s rebalance to Asia is in jeopardy. With Trump promising to roll back the Trans-Pacific Partnership, Beijing has wasted no time in laying out its own vision for a more integrated Eurasia that may exclude America and in which China will play the leading role. We may be on the brink of a Eurasian century, rather than a Pacific century.

Sustaining an international liberal economic order

In the past, as other political systems have crumbled, the liberal international order has risen to face its challenges. Yet so long as the economies of its leading members remain fragile and their political institutions divided, the order they have championed is unlikely to regain the political momentum that helped democracy spread across the globe. Instead, it will evolve into a less ambitious project: an international liberal economic order that encompasses states with diverse domestic political systems.

This need not be bad news if it allows democracies and their illiberal counterparts to find ways to coexist. Non-Western rising powers, China chief among them, will remain committed to sustaining the international economic order of open markets and free flows of investment. After all, only through continued integration into the global supply chains of goods, services, people and knowledge can emerging markets meet the aspirations of their growing middle classes.

It is in the West’s interests that China’s economic development continues smoothly. US and European markets for goods, services and infrastructure should remain open to Chinese trade and foreign direct investment, as long as Chinese companies abide by their WTO commitments and by US and European rules on security and transparency and the protection of intellectual property. European countries should take the same approach toward Russia, on the condition that Russian companies abide by EU rules. A mutual commitment to the international liberal economic order would help Western governments and their illiberal counterparts keep open other avenues for cooperation on shared challenges, such as terrorism and nuclear proliferation.

Meanwhile, European governments and businesses should take part in the Chinese-led strategy to connect northeast Asia with Europe across the Eurasian continent, a component of a series of regional infrastructure investments known as the Belt and Road Initiative. Today, the world is experiencing a structural decline in growth rates of trade, as emerging markets like China make more of their own products and developed countries bring some production back on-shore. Against this backdrop, ramping up investment in infrastructure that can connect the thriving coastal areas of Asia to their underdeveloped hinterlands and then to Europe could create new opportunities for economic growth in both the liberal and the illiberal worlds.

Similar cooperation will be harder to build with Russia. Russia’s system of centralized, opaque political and economic governance makes deeper integration incompatible with the EU’s market and rules-based system. And NATO members have begun a much-needed upgrading of their military readiness in the face of recent Russian provocations. EU and NATO tensions with Russia will likely persist. However, the initiative to build new Eurasian economic inter-connections could provide an alternative way for the United States and Europe to engage Russia in the future.

A period of awkward coexistence

The countries that built the liberal international order are weaker today than they have been for three generations. But liberal policymakers would be wrong to hunker down or resort to containment. An extended stand-off with those who contest a liberal international order may accidentally lead to outright conflict. A better approach would be for liberal countries to prepare themselves for a period of awkward coexistence with illiberal ones, cooperating on some occasions and competing on others. Time will then tell whose form of government is more resilient. If history is any guide, liberal democracy remains the best bet.

An extended version of this article appears in Foreign Affairs.

To comment on this article, please contact Chatham House Feedback

As US and European governments grapple with the challenges of reinforcing their economic relationships, traditional negotiations over tax and trade policy may soon be overwhelmed by a far thornier issue: the regulation of data storage, protection and analysis. As traditional global trade in goods and services has levelled off, cross-border data flows continue to expand rapidly.

Christopher Smart will outline the economic promise of data analytics to drive dramatic productivity gains, particularly for industry and financial services. He will explore contrasting political debates in the United States and Europe over personal privacy and national security and analyse how these have influenced many of the assumptions that drive the regulation of data flows. 

This event is open to coporate members only.

This event will be preceded by an informal, welcome reception from 12:15.

To enable as open a debate as possible, this event will be held under the Chatham House Rule. 

The transatlantic partnership has provided the backbone to the liberal international order ever since the end of the Second World War. The tumultuous political events of 2016 denote a brutal rupture from the dominant global position of the transatlantic partnership and threaten to undermine the partnership itself. Only by understanding that the current problems facing the transatlantic relationship have deep structural roots will it be possible to find ways to prevent further erosion, sustain the benefits of the existing partnership and build opportunities for transatlantic cooperation in the future. 

Ahead of the publication of his new paper, Robin Niblett, will join us to share his thoughts on the challenges, opportunities and potential strategies towards securing the future of the transatlantic relationship. 

Attendance at this event is by invitation only. 

Summary

• As the US government and European governments once again grapple with the challenges of reinforcing and expanding the transatlantic economic relationship, traditional negotiations over trade or tax policy may soon be upstaged by a far thornier and more important issue: how to regulate the storage, protection and analysis of data.
• Growth in the traditional global trade in goods and services has levelled off, but cross-border data flows continue to expand rapidly and the challenges of developing policies that protect privacy, security and innovation are already tremendous. For example, data analytics are driving dramatic productivity gains in industry, particularly for large and complex installations whose safety and efficiency will increasingly depend on flows of data across jurisdictions. Meanwhile, ‘fintech’ (financial technology) start-ups and large banks alike are testing new modes of accumulating, analysing and deploying customer data to provide less expensive services and manage the risk profile of their businesses.
• While the US debate on the use of data has often been framed around the trade-off between national security and personal privacy, Europeans often face an even more complex set of concerns that include worries that their digital and technology firms lag behind dominant US competitors. The political and regulatory uncertainty helps neither side, and leaves transatlantic companies struggling to comply with uncertain and conflicting rules in different jurisdictions.
• A global consensus on data regulation is currently well out of reach, but given the expanding importance of data in so many areas, basic agreement on regulatory principles is crucial between the US and the EU. This paper proposes a ‘Transatlantic Charter for Data Security and Mobility’, which could help shape a common understanding. While it would hardly resolve all concerns – or indeed contradictions – around the prevailing traditions on both sides of the Atlantic, it could provide the basis for better cooperation and establish a framework to protect the promise of the digital age amid an unpredictable and emotional debate.

While trade and tax remain at the heart of the difficult economic conversations between Europe and the US, a new issue has emerged as a potential source of even greater friction: data.

Growth in the traditional global trade in goods and services has levelled off, but cross-border data flows continue to expand rapidly and the challenges of developing policies that protect privacy, security and innovation are already tremendous. For example, data analytics are driving dramatic productivity gains in industry, particularly for large and complex installations whose safety and efficiency will increasingly depend on flows of those data across jurisdictions. Meanwhile, ‘fintech’ (financial technology) start-ups and large banks alike are testing new modes of accumulating, analysing and deploying customer data to provide less expensive services and manage the risk profile of their businesses.

The rules that govern the collection, transmission and storage of data are perhaps one of the more surprising controversies in the transatlantic relationship. Similar liberal democracies with similar geostrategic interests might be expected to approach the handling of personal, corporate and government data in more or less the same way. And yet the US and its key European partners have struck different balances in the trade-offs between national security and citizens’ rights, between freedom of expression and personal privacy, and between free enterprise and market regulation.

While the US debate on the use of data has often been framed around the trade-off between national security and personal privacy, Europeans often face an even more complex set of concerns that include worries that their digital and technology firms lag behind dominant US competitors. The political and regulatory uncertainty helps neither side, and leaves transatlantic companies struggling to comply with uncertain and conflicting rules in different jurisdictions.

This makes more determined efforts by US and European policymakers to agree basic principles that will guide the usage and protection of personal and commercial data all the more important. While common regulations or even greater alignment among regulators seem out of reach, a ‘Transatlantic Charter for Data Security and Mobility’ would provide a set of principles for more specific rules amid political landscapes and technological developments that are evolving rapidly. It could also provide the basis for firms, whether in manufacturing or financial services or health care, to draft their own voluntary standards on how they protect data even as they develop new algorithms that improve productivity, safety and customer satisfaction.

Embarrassing leaks, careful denials and endless lawsuits will continue to shape the awkward efforts of policymakers to find common ground around issues like cyberespionage, defence of common networks and the sharing of personal data with law enforcement. Cyberattacks with the aim of disrupting government operations or influencing election campaigns will add still further pressures. These will all serve as a noisy backdrop to a related but separate debate over how commercial firms should exploit the opportunities of global networks and ‘big data’ analytics while protecting national interests and privacy.

Yet, setting common guidelines for commercial data transmission and storage remains crucial both to protect the goods and services that already depend on sophisticated data-gathering and analysis, and to support the next generation of productivity gains and business opportunities.

Global firms yearn for clarity and predictability as they organize themselves to make the most of the data revolution. Neither is likely to become a reality soon. The EU’s new General Data Protection Regulation will take effect in 2018, but its implementation will inevitably be coloured by the fact that American firms currently dominate the information technology business. Last year’s ‘Privacy Shield’ agreement between the US and the EU renews the permission for firms with transatlantic business interests to transfer data, subject to compliance with basic standards of protection, but the agreement remains vulnerable to European court challenges. Britain’s decision to leave the EU adds a further complication, as it establishes its own set of data protection rules that may not easily align with either European or US requirements. Meanwhile, the World Trade Organization continues to debate new rules for digital trade, even as markets like China, Russia and Brazil make up their own.

If this ‘Transatlantic Charter for Data Security and Mobility’ were adopted bilaterally, say as part of the annual reviews of the US–EU Privacy Shield agreement, it could form the basis for broader cooperation on these issues, helping to drive progress in the G7 and G20 and ultimately perhaps in trade agreements under the WTO. It would hardly secure complete alignment on these questions, but it could help establish the framework for a debate that all too often lurches to extremes and risks damaging a fundamental alliance for global stability – along with a fundamental driver of 21st-century economic progress.

To comment on this article, please contact Chatham House Feedback

Diane Coyle will join us for a discussion on the impact that new technologies will have on transatlantic economic transformations in the future.

Economic growth rates in the US and Europe have been decelerating over the last decades, and the growth that has materialised has not been equally shared by all.

While technological advancements have contributed to widening inequality of income and wealth, at the same time, technological change is a driving force in improving living standards.

Looking ahead, what role will new technologies play in economic transformations and disruptions?

How can leaders in government and business on both sides of the Atlantic best harvest the potential and respond to the challenges of technological change and its impact on the economy?

This event is part of the US and Americas Programme ongoing series on Transatlantic Perspectives on Common Economic Challenges.

This series examines some of the principal global challenges that we face today and potentially differing perspectives from across Europe and the US.

Attendance at this event is by invitation only.

The US and the EU face many of the same challenges today: they must maintain economic growth in the face of global competition, harness and manage rapid technological change and respond to diverse security threats. Yet a transatlantic alliance that has endured since the end of the Second World War now appears increasingly divided over how to respond.  

The 2016 Brexit referendum and the US presidential election resulted in victories for populist campaigns that questioned the core values and institutions of this alliance. More recent elections in Europe have bolstered centrist candidates, and helped to rejuvenate the EU. But on questions of trade, security, climate change and relations with Russia, Europe’s leaders have frequently been at odds with the Trump administration. On these and other critical issues, an opportunity and impetus has arisen for the EU to assume a global leadership role that many feel the US is abandoning.

Are the EU and the US on divergent paths? How are changing geopolitical and economic realities transforming the transatlantic alliance? And how committed is this alliance to defending the global institutions and rules it created? Chatham House and the Chicago Council on Global Affairs will convene policy experts, journalists and practitioners for a half-day event to chart these trends and consider their implications.

Please note, this event will take place in Chicago between 2.30pm and 7pm Greenwich Mean Time (GMT).

Chatham House members will be able to follow a livestream of the event here on the day.

This event is being co-hosted with the Chicago Council on Global Affairs.

Summary

• The United States and the European Union are deeply integrated economically in terms of movement of goods, services and capital across the Atlantic, but this is not matched by the mobility of labour. Freer movement of high-skilled workers across the Atlantic has a potentially critical role to play in maintaining and strengthening the bilateral economic relationship.
• Both the US and EU seek to attract high-skilled labour through the use of temporary visa programmes. Various routes are available for highly skilled workers from the EU to temporarily work in the US (for instance, through the H-1B visa for foreign nationals in ‘specialty occupations’, as well as other visa categories for treaty traders and investors, intra-company transferees, and international students seeking work authorization in the US before or after graduation). The main ways for highly skilled workers from the US to temporarily work in EU member states are through EU-wide schemes that apply in 25 out of the 28 member states (for holders of EU Blue Cards or intra-company transferees); or via member states’ parallel national schemes.
• The experiences of US and EU employers and workers under the US H-1B programme and the EU’s Blue Card scheme differ greatly. The EU Blue Card scheme avoids many of the drawbacks of the H-1B visa. It does not have an annual cap on the number of visas issued. It also grants greater autonomy to the worker by not requiring the employer to sponsor long-term residence, by providing greater flexibility to switch employment, and by having a longer grace period for visa-holders to find new employment after dismissal.
• The US visa system hampers America’s economic growth. Restrictive policies such as an annual limit on the number of H-1B visas issued, and the associated uncertainty for employees and employers, hinder the ability of US companies to expand and innovate. The complex and costly visa application process is a particular burden for small and medium-sized enterprises. Problems around the timely availability of visas frustrate investors both from the US and from abroad (including from the EU). European firms face difficulties in acquiring visas for intra-company transferees, and not all EU member states have access to the treaty trader and treaty investor visa categories. At times, this impedes foreign direct investment and restricts US job creation. In addition, current policies hinder the economy’s retention of EU and other graduates of US universities. This is of particular concern given that skilled graduates have a critical role to play in addressing the US’s growing shortage of workers in the science, technology, engineering and mathematics (STEM) fields.
• Given the comparability of US and EU wages and labour markets, US concerns about foreign workers ‘stealing’ their jobs or depressing wages generally do not apply to EU citizens. On the contrary, a more open immigration policy for high-skilled workers – in particular for EU citizens – would benefit the US economy.
• Efforts to reform visa systems for high-skilled labour are under way in both the US and EU. In order to facilitate the movement of highly skilled workers across the Atlantic, this research paper recommends (1) creating a special visa for highly skilled EU citizens to work temporarily in the US; (2) extending the availability of treaty trader and investor visas to all EU member states; and (3) increasing efforts to eliminate fraud and abuse in the H-1B system. These measures could potentially help to create more investment, jobs and economic growth in the US.

Megan Greene will join us for a discussion on the prospect of future economic and political uncertainty on both sides of the Atlantic.

The first year of Donald Trump’s presidency and the ongoing saga of Brexit negotiations underscore the amount of uncertainty about the economic future on both sides of the Atlantic.

Despite that, business and consumer confidence in the US and continental Europe have soared. Are we still stuck in secular stagnation, or are we breaking out of the low growth, low inflation, low rate environment we’ve been in for years?

What opportunities and risks are posed by this year’s elections in France and Germany, the upcoming elections in Italy, and the mid-term elections in the US?

This event is part of the US and Americas Programme ongoing series on Transatlantic Perspectives on Common Economic Challenges. This series examines some of the principal global challenges that we face today and potentially differing perspectives from across Europe and the US.

Attendance at this event is by invitation only.

Events over the past 18 months, in particular with the UK’s decision to leave the European Union and the election of Donald Trump, have elevated concerns among many Europeans and Americans over the health of the transatlantic relationship. With the EU looking inward and President Trump’s rejection of a number of historically common US-European interests, such as NATO, the JCPOA on Iran, and the Paris Agreement, the continuation of close transatlantic collaboration is in question.

Xenia Wickett will discuss the future of the transatlantic relationship. Is there a clear structural divergence between the US and the UK or is the partnership merely going through a temporary hiccup? She will explore the importance of recent events as well as structural, long-term factors that affect the US and Europe similarly. And what actions, if any, can be taken to mitigate differences and best manage the current situation of uncertainty?

Please note, this event is online only. Members will be able to watch the webinar from a computer or other internet-ready device and do not need to come to Chatham House to attend.

In a month’s time, the UK will have a new prime minister. The campaign has been dominated by candidates’ views on how to deliver Britain’s withdrawal from the EU by October, alongside some discussion of domestic issues.

But relatively little has been said about international affairs, despite the fact that foreign policy questions are becoming a more partisan issue and Britain is facing crucial questions around Brexit and the wider international context. These will be waiting for whoever finds themselves in Number 10 on 22 July. 

1. How can Britain influence Europe from outside the EU?

Theresa May was fond of saying that Britain is leaving the EU but not leaving Europe. Britain cannot change its geography. It will continue to share many strategic and security interests with the rest of the continent, but it will be outside of Europe’s central political and economic project. A new PM will not only have to negotiate Britain’s new relationship with the EU, but also think about how to influence it as a third country.

An aspect of this will be finding a new way to work with the EU on foreign, security and defence policy that meets the need for autonomy on both sides. How deep this relationship is or how institutionalized it will be is yet to be negotiated and can be shaped by the next PM.

The UK needs to decide how ambitiously it wants to engage with the new defence agenda in the EU (particularly its industrial components), and how to balance these with key bilateral relationships like France and Germany. Amid uncertainty about American security guarantees and Russian aggression, the next PM must also consider what Britain’s security role in Europe should be and NATO’s place within that.

Beyond conventional foreign policy issues, Britain is also going to be heavily shaped and influenced by the rule-making power of the EU, and how the world’s largest market regulates itself, from energy to financial services, consumer products and the environment.

The UK will need a strategy to influence the EU from the outside – something Swiss, Norwegians and Americans will acknowledge is no easy feat. This could include significantly increasing its diplomatic footprint across Europe, working closely with the UK’s private and non-profit sectors, utilizing Britain’s technical expertise in areas like sanctions, and creating new ad hoc groupings to share perspectives and ideas, building on examples like the Northern Future Forum. 

2. Should Britain do business with President Trump?

President Trump represents a fundamental challenge to Britain: an American president whose belligerent unilateralism runs counter to many of Britain’s foreign policy objectives. His frequent and often shameless diplomatic faux pas – from proposing Nigel Farage be the British ambassador to his dog-whistle attacks on the mayor of London – are compounded by real differences of substance on issues like trade, climate change and nuclear non-proliferation.

A new prime minister must decide how to manage relations with the US administration, whether to challenge or condemn a US president when he acts against Britain’s interests, or use flattery or quieter diplomacy to seek to influence him. Theresa May’s strategy of staying politically close to the president and playing to his ego has yielded little in policy terms, though other world leaders have fared little better.

A new PM will face some uncomfortable choices. Will they continue to defend the Iran nuclear deal alongside European allies while the US continues to undermine it? Do they believe a trade deal with America is desirable or achievable with the current administration, and what are they willing to sacrifice to achieve it? Is the American security guarantee for Europe secure with Donald Trump as president? Judgements on these questions should inform Britain's wider strategy, and its objectives for a future relationship with the European Union.

3. Should Britain prioritize economics or security in its relations with China?

Britain faces its own version of the challenge that many countries face – how to balance the economic and investment benefits of a positive relationship with China with concerns about repressive domestic politics and a more assertive Chinese role regionally and globally. This tension has become more acute for two reasons.

First, the economic dislocation of leaving the EU may create a greater reliance on Chinese trade and investment. China is already a major investor in the UK. If Brexit proves to be disorderly, Britain’s need may be all the greater (though China faces economic headwinds as well). Some in Brussels even fear that the economic difficulties of Brexit may make the UK a soft touch for emerging powers from which it seeks inward investment and market access.

Second, the deterioration in US–China relations means the UK may come under increasing pressure from the United States to take a tough line with China. The controversy over Huawei’s role in delivering 5G networks may become a more regular feature of transatlantic debates, with Britain facing Chinese economic pressure on one side and a squeeze from America over security issues on the other, without the weight of the EU behind it.  

A new prime minister should consider whether the UK’s interests are served by a security role in east Asia, and whether it has the capability to play one.

The UK remains a party to the Five Power Defence Arrangements. The Royal Navy has conducted freedom of navigation exercises in the South China Sea, prompting a rebuke from Beijing. It has also taken steps to deepen security ties with Japan.

But the UK government has struggled to present a coherent position. Some cabinet ministers have sought to open doors to the Chinese market at the same time as others announced their intentions to send aircraft carriers to the Pacific. The next PM will need to find a balance between China and the US, or accept the consequences of more directly taking sides on disputes about trade, technology, and security.

4. How can the contradictions between UK foreign and domestic policy be reconciled?

One of the many problems with the vague and unhelpful slogan ‘Global Britain’ is how it jars with many aspects of domestic policy. This incoherence reduces Britain’s foreign policy credibility and effectiveness.

Britain has actively supported the UN-led Yemen peace process while continuing to support Saudi Arabia’s military campaign through arms sales. Britain wants to build a new ambitious independent trade policy while restricting the migration that is crucial for services trade. British foreign secretaries trumpet the UK’s soft power while the Home Office deports members of the Windrush generation, bungles EU citizenship applications and sets unreasonable burdens for many people seeking visas simply to visit the country.

Global universities are celebrated while international students had their post-study visas cut (a policy that sensibly is likely to be reversed). Britain advocates international tax compliance and transparency while not taking robust steps to regulate the tax haven role played by crown dependencies and overseas territories.

A new prime minister has the chance to get to grips with these inconsistencies and develop foreign and domestic policies which are more coherent and self-re-enforcing.

5. At what level should Britain’s international ambitions be funded?

Successive governments have celebrated the fact the UK is the only Western country to spend 2% of GDP on defence and 0.7% on development. However, this masks some real pressures in the system.

There are significant problems in the defence budget and a growing gap between commitments and committed funds. Meanwhile, the funding of Britain’s diplomacy has been cut by successive governments – Labour, Conservative and coalition – for much of the last 20 years. Numerous bodies have highlighted the problems facing the overstretched and underfunded Foreign Office. Where would defence and diplomacy sit in the new prime minister’s hierarchy of priorities?

The problem is not purely one of funding, but the gap between ambitions, rhetoric and resources. It is not sustainable for British ministers to trumpet Britain’s global ambitions while not properly funding the tools of its influence abroad.

It would be reasonable and understandable for a new prime minister to adjust that ambition and tone down the rhetoric, or alternatively to address resource pressures by investing in diplomacy and defence. But that choice should be informed by a sober reflection on Britain’s international position and interests as it leaves the EU. Brexit offers a chance to revisit assumptions that have guided British policy for a generation. A new prime minister should seize this opportunity.

A realistic vision for the future

All these issues will be more pronounced if the UK leaves the EU with no deal at the end of October. ‘No deal’ would be not simply an economic shock but a diplomatic rupture that will colour the UK’s capacity to negotiate a new relationship with the EU, which will be the first order of business after a ‘no deal’ exit. Trust will be in short supply.

Even if they don’t get to vote on the new prime minister, the public deserves serious answers to these and other questions from the men who want to lead the country. Not the platitudes of ‘Global Britain’ or a reflexive and unexamined British exceptionalism, but a serious, realistic assessment of how Britain will cope with the disruptions of leaving the EU and how it might thrive outside the regional bloc it has been a part of for more than 45 years.

Three years ago, as the UK was holding its referendum on Brexit, the EU was rolling out its Global Strategy for a more cohesive and effective security and defence policy. Since then, EU member states have set impressive goals and, as significantly, taken important practical steps to make an EU defence capability a tangible proposition, despite differing collective defence commitments, traditions of neutrality among some member states and very different strategic cultures.

All of these developments have taken place with the UK as reluctant observer. The UK has been traditionally hostile to a deepening of defence collaboration within the EU (and consistent of the view that Europe’s military security was best provided through NATO). But the Brexit referendum vote has placed the UK as a bystander as EU security and defence initiatives have been pursued which have overridden the past red lines of British governments.

There is, however, a Brexit-related paradox in all these developments.

A central goal of the security and defence-related aspects of the EU Global Strategy is for the EU to have the capacity to act independently of the United States and, through indigenous defence industries, the ability to produce the means to make that possible.

With the UK outside the EU, and its opposition absent, it is easier to create a political consensus to push for more defence integration. But without the UK there are diminished collective defence capabilities which would make European strategic autonomy much harder to achieve.  

The May government has been an enthusiast for preserving close security and defence cooperation with the EU. The Withdrawal Agreement and the Political Declaration both seek to provide for a close EU–UK relationship post-Brexit.

However, the Article 50 negotiations have made clear that the EU’s institutions are hostile to special treatment for the UK beyond that normally accorded to a third country. Disagreements over the terms of the UK’s continuing participation in the Gailleo dual-use satellite system, which has a significant security and defence utility, have signalled that there is a strong lobby in Brussels and some national capitals seeking to significantly circumscribe collaboration with Britain.

The scale and capabilities of the UK’s military, its defence expenditure (notably on defence research and development) and its defence industrial base make any British decoupling from the EU’s security and defence a major issue. Disconnecting the UK from EU developments entirely would be a costly political choice for both sides.

And excluding the UK from new initiatives in defence R&D and new defence procurement arrangements would be suboptimal in delivering a stronger European defence, technological and industrial base. Duplicating existing UK capabilities, especially strategic enablers such as strategic airlift, target acquisition and intelligence, surveillance and reconnaissance capabilities, would be an unnecessary squandering of already hard-pressed European defence budgets.

At present the common procurement and defence industry plans driven by the EU Global Strategy are embryonic. And significant defence capability decisions are taking place detached from the EU’s plans, which could reinforce a divide between the UK and other member states.

As illustrative, the formal agreement this week between France, Germany and Spain on the Future Combat Air System (FCAS) to develop a next-generation stealth fighter is competing with the UK-supported Tempest project that shares the same objective. The 20-year timescales for the delivery of the FCAS and Tempest projects are a reminder that defence procurement decisions are of multi-decade significance.

As the EU’s ambitions are nascent, it is too early to fully assess what might be the impact of any decision by the EU and the UK to keep each other at an arms-length in security and defence cooperation. With a more detached relationship, the UK will have significant concerns if it sees the EU’s common procurement arrangements develop in a manner that actively discriminates against the UK defence industry.

Outside of procurement and defence issues there may be other areas of future concern for the UK – for example, the extent to which the EU might deepen and broaden cooperation with NATO in a manner that makes the collective influence of EU member states within NATO more apparent, or to which the footprint of future EU conflict and security activities in third countries starts to overshadow the activities of the UK.

As the UK has been grappling with Brexit domestically, the EU has been evolving its security and defence policy ambitions. These are developments that will impact on the UK and in which, therefore, it has a stake but as a departing member state it has a weakening ability to shape.

Any aspect of future EU–UK cooperation is hostage to the vagaries of how the Brexit endgame concludes.

With the new leader of the Conservative party due to be announced on 23 July, what are the prospects for the party and the country?

On Brexit, the new prime minister faces most of the same challenges and constraints as Theresa May. The leadership contenders have outlined their ambitions for a revised deal, but with the EU insisting negotiations are over, their room for manoeuvre appears to be limited. Furthermore, even with a new leader at the helm, important divisions remain among voters about what shape Brexit and the future UK-EU relationship should take. If the EU won’t change the deal, and parliament won’t accept it, how can the deadlock be broken? Is a 'No Deal' Brexit politically deliverable? Or could there be a general election later in 2019? Can the Conservative party survive a pre-Brexit election intact?

Beyond Brexit, what are the other choices, in both domestic and foreign policy, facing the next prime minister? How might the decisions he makes affect the future of the party and British politics more broadly?

In this session, the speaker will share his reflections on the likely result of the leadership election, and what lies beyond it.

Attendance at this event is by invitation only.

Summary

• The stakeholders in the transatlantic relationship – the US, Canada and Europe – have long sought to stabilize international politics and economies by spreading support for the liberal goals of free markets, democracy and human rights. As their own commitment to this agenda appears to waver, China is becoming wealthier and more assertive. This briefing explores the extent to which these goals – along with the unity of the transatlantic relationship – are now in jeopardy.
• Great uncertainty surrounds this question, including over the direction of US foreign policy, risks to European cohesion and slowing growth in China. However, two decades of revisionist behaviour by the authorities in Beijing show that China’s values and interests already conflict with transatlantic goals in trade, cyberspace, international development, security and human rights.
• On trade, China pursues protectionist policies while engaging actively in intellectual property theft. China’s military modernization and its view of maritime law challenge the territorial status quo in East Asia and raise the risk of military crisis there. China lends unconditionally to countries that abuse human rights and are corrupt, undermining efforts by Western governments to promote good governance and human rights.
• Defending liberal goals is complicated by asymmetric interests among the transatlantic partners, especially over security. China also uses ‘wedge’ strategies to pick off potential allies, thus diluting the power and will of any counterbalancing effort.
• This briefing argues that China’s rise has worrying implications for the liberal international order. In response, the US should recognize its own strong interest in European unity, while Europeans must be ready to align more with the US (and East Asian allies) in order to temper Chinese behaviour.

Attendance at this event is by invitation only.

Please note the speaker will be speaking in a personal capacity.

On 13 October 2019, Poland goes to the polls in national elections. On the back of a strong performance in the European elections, the incumbent Law and Justice Party (PiS) is seeking to retain its absolute majority. The election takes place against a background of continued strong economic growth but amid disputes over the direction of social policy and a domestic contest about liberal values. The European Commission and the Polish government have clashed over reforms that the Commission believes could compromise the independence of the judiciary in the Poland. Meanwhile, in foreign policy terms, Poland has sought to develop good working relations with the Trump administration and supported a tough line towards Russia.

The speakers will address the domestic and international significance of the Polish election. Will PiS be able to secure another majority? What would be the implications for the direction of social and political reform in Poland? And how could the elections shift Poland’s approach to politics at the European level and its wider foreign policy?  

The Polish election on 13 October resulted, as expected, in a victory for of the ruling Law and Justice party (PiS).

But despite again securing a slim majority in parliament, it has not been wholly a triumph for PiS. And though there continue to be concerns about the party’s authoritarian tendencies, the election has illuminated some important nuances to its support and appeal, which hold lessons for politics across Europe.

Even though some opinion polls had suggested PiS were close to winning a supermajority in parliament that would have allowed it to pursue constitutional changes, the party fell short of that target, while it lost its majority in the Senate. Thus, while PiS may well renew its efforts to consolidate its control over the state apparatus and the media or meddle with the justice system, it becomes much more difficult with the opposition controlling the Senate and being able to scrutinize laws or have a say in the appointment of public officials.

Most importantly, the election result has shown that while Polish citizens were willing to reward a party that delivered on promises of economic growth and redistribution, they were not ready to hand a blank cheque for full-blown institutional realignment to PiS. Tellingly, many moderate candidates in PiS lists performed quite well among the party’s voters. 

Even though they rewarded a party that at times employed harsh rhetoric against Brussels, Polish voters have long expressed some of the strongest rates of support for EU membership, according to Eurobarometer surveys. The government has also faced massive protests against its most radical initiatives, such as reform of the judicial system and a law to almost completely ban abortion that was ultimately scrapped. It is therefore more likely that the party’s radicalism kept it from increasing its share, rather than helping it to secure victory.

This is not to say that the threat of illiberalism does not remain alive in Poland. But it shows that the degree of PiS dominance in Poland has never been comparable to that of Fidesz in Hungary, with which it is often compared.

This was reflected in the party’s own rhetoric. In the election campaign the government mostly focused on its economic record, recognizing that much of its support is conditional on conventional measures of political success like voter welfare. PiS may not give up on its ambition to establish a ‘new Polish republic’, but the elections have made it clear that economic stability rather than political radicalism will ensure its longevity in power – with the latter perhaps even being a liability as the party experiences fatigue in office.

Similarly, despite the government’s antagonistic stance towards the EU on various issues, PiS never entertained ideas of withdrawing from the EU, as some of its critics feared earlier in its term. With the Polish economy deeply entwined with the European market and Poland expecting – probably for the last time – to receive substantial subsidies from the next EU budget, EU membership is a necessary precondition for the economic success for which PiS is claiming credit.

With the pro-European left returning to parliament but also an extreme party of the right winning representation, the next government will have a difficult balancing act as it tries to draw on the benefits of EU membership while maintaining its defiant image towards Brussels.

Ultimately, beneath the rhetoric and the posturing, PiS is a party that has shrewdly combined popular policies from the left and right, fulfilling promises of both cultural sovereignty and economic redistribution. Its reelection should not come as a surprise given that it fulfilled its electoral pledges by delivering some of the things that many voters in western Europe also crave but that mainstream parties there have largely failed to provide.

When we look back on Brexit, what will it tell us about Europe? Will it simply be that an insular UK was always different and destined to never fit in? Will it be that the UK's decision to leave revealed deeper problems with the EU? Or will it be that the threat created by the UK's withdrawal united the continent and saved the European project?

The speaker will explore Brexit through the prism of biblical and ancient Greek mythology. She will examine the reasons behind Britain’s decision to leave the EU and imagine a ‘better Europe’ that has learnt the lessons of the past and reconciled the divisions exposed by the Brexit vote. How can the EU reinvent itself and re-engage its citizens? And where does a post-Brexit UK fit?

Attendance at this event is by invitation only. 

Turkey witnessed some major developments over the last year. In August 2018, the dramatic Lira devaluation caused the Turkish economy to go into recession. In the 2019 local elections, which took place during the economic downturn, the Republican Peoples’ Party (CHP) mayoral candidates took control of Ankara and Istanbul after 25 years of dominance by the ruling Justice and Development Party (AKP).

The election results might lead to a rethink of the AKP leadership and consequences on Turkish politics will depend on Erdoğan’s interpretation of this reversal of his political fortune.

Will this affect the long-standing alliance between AKP and MHP that has characterised Turkish foreign policy for the past few years? What impact will this have on both the domestic and international level? Finally, will Turkey’s recent incursion into Syria have lasting effect on the country’s alliances with other powers and its standing?

In this context, the speaker will analyse the significance of these changes and the future trajectory of Turkish politics, economics and foreign policy.

On 12 December, Britain will hold the most consequential election in its postwar history. The outcome of the election will influence not only the fate of Brexit but also the likelihood of a second referendum on EU membership, a second independence referendum in Scotland, the most economically radical Labour Party for a generation, Britain’s foreign and security policy and, ultimately, its position in the wider international order.

If you look only at the latest polls, then the outcome looks fairly certain. Ever since a majority of MPs voted to hold the election, the incumbent Conservative Party has averaged 38%, the opposition Labour Party 27%, the Liberal Democrats 16%, Brexit Party 10%, Greens 4% and Scottish National Party 3%. Prime Minister Boris Johnson and his party continue to average an 11-point lead which, if this holds until the election, would likely deliver a comfortable majority.

Johnson can also point to other favourable metrics. When voters are asked who would make the ‘best prime minister’, a clear plurality (43%) say Johnson while only a small minority (20%) choose the Labour Party leader, Jeremy Corbyn. Polls also suggest that, on the whole, Johnson is more trusted by voters than Corbyn to deal with Brexit, the economy and crime, while Jeremy Corbyn only tends to enjoy leads on health. All of this lends credence to the claim that Britain could be set for a Conservative majority and, in turn, the passing of a withdrawal agreement bill in early 2020.

But these polls also hide a lot of other shifts that are taking place and which, combined, make the 2019 general election unpredictable. One concerns leadership. While Boris Johnson enjoys stronger leadership ratings than Jeremy Corbyn, it should be remembered that what unites Britain’s current generation of party leaders is that they are all unpopular. Data compiled by Ipsos-MORI reveals that while Johnson has the lowest ratings of any new prime minister, Labour’s Jeremy Corbyn has the lowest ratings of any opposition leader since records began.

Another deeper shift is fragmentation. One irony of Britain’s Brexit moment is that ever since the country voted to leave the European Union its politics have looked more ‘European’. Over the past year, one of the world’s most stable two-party systems has imploded into a four-party race, with the anti-Brexit Liberal Democrats and Nigel Farage’s strongly Eurosceptic Brexit Party both presenting a serious challenge to the two mainstream parties.

In the latest polls, for example, Labour and the Conservatives are attracting only 61 per cent of the overall vote, well down on the 80 per cent they polled in 2017. Labour is weakened by the fact that it is only currently attracting 53 per cent of people who voted Labour at the last election, in 2017. A large number of these 2017 Labour voters, nearly one in four, have left for the Liberal Democrats, who are promising to revoke Article 50 and ‘cancel Brexit’. This divide in the Remain vote will produce unpredictable outcomes at the constituency level.

At the other end of the spectrum, the Conservatives are grappling with a similar but less severe threat. Nigel Farage and the Brexit Party are attracting around one in ten people who voted Conservative in 2017, which will make Boris Johnson’s task of capturing the crucial ‘Labour Leave’ seats harder. There is clear evidence that Johnson has been curbing Farage’s appeal, but it remains unclear how this rivalry on the right will play out from one seat to the next.

One clue as to what happens next can be found in those leadership ratings. While 80 per cent of Brexit Party voters back Johnson over Corbyn, only 25 per cent of Liberal Democrat voters back Corbyn over Johnson. Johnson may find it easier to consolidate the Leave vote than Corbyn will find the task of consolidating the Remain vote.

All of this reflects another reason why the election is unpredictable: volatility. This election is already Britain’s fifth nationwide election in only four years. After the 2015 general election, 2016 EU referendum, 2017 general election and 2019 European parliament elections, Britain’s political system and electorate have been in a state of almost continual flux. Along the way, a large number of voters have reassessed their loyalties.

As the British Election Study makes clear, the current rate of ‘vote-switching’ in British politics, where people switch their vote from one election to the next, is largely unprecedented in the post-war era. Across the three elections held in 2010, 2015 and 2017, a striking 49 per cent of people switched their vote.

This is not all about Brexit. Attachment to the main parties has been weakening since the 1960s. But Brexit is now accelerating this process as tribal identities as ‘Remainers’ or ‘Leavers’ cut across traditional party loyalties. All this volatility not only gives good reason to expect further shifts in support during the campaign but to also meet any confident predictions about the election result with a healthy dose of scepticism.

On 12 December 2019, the United Kingdom will hold one of its most crucial elections in the 21st century. The result will have a direct impact on the Brexit process and will most likely determine the country’s future direction for years to come.  

Yet the final outcome is far from predictable. It seems quite certain that the 2019 election is unlikely to produce a clear two-party share of the vote as happened back in 2017. Public trust in politicians is low and party loyalty is looser than ever. Polls show that Brexit it overwhelmingly considered as the main issue among the electorate alongside a deep concern about the future of public services. This raises multiple questions: can the 2019 election represent a chance to unite the country and move on? Will cross-party identities of ‘Leavers’ and ‘Remainers’ translate to how people vote in the election? And what will the outcome mean for Brexit and the future of party politics in Britain? 

Attendance at this event is by invitation only. 

The new European Commission has finally started its work this week. In a world increasingly defined by great power competition and deprived of the certainties of a strong transatlantic partnership, this might well be the first commission where foreign and security policy issues will be equally important to internal EU ones.

Amid an escalating Sino-American rivalry, there is a growing realization in Brussels that something has to change in the way the EU thinks and acts internationally.

Charting a more successful path forward will not be easy. Josep Borrell, the EU’s new high representative for foreign affairs and security policy, during his confirmation hearing, offered a hint as to what might be needed to get there: ‘The EU has to learn to use the language of power.”’

What might this mean in practice?

Four issues illustrate some of the key dilemmas ahead for the EU and its new executive.

Hard power

The most revealing of these concerns hard power.

For a union so addicted to the US security guarantee, and so used to the softer approaches of exercising its influence, this was always going to be a difficult discussion. The recent disagreement between Germany and France over the future of NATO gave a taste of how fraught and complex this discussion can be.

Underpinning it are three fundamental questions. If the EU has to enhance its capacity to defend its interests with military power, how (and how quickly) is it to move ahead, how much additional responsibility will that mean and to what degree will this responsibility need to be shouldered autonomously, potentially distancing itself from NATO or Washington? Moving forward with this agenda while balancing the competing interests of member states and preserving the fragile progress already achieved with initiatives such as PESCO will not be easy.

Discussion and debate among member states should not be discouraged, but the new commission has a role to play in ensuring that such discussion is constructive. Distracting talks about an EU army or a nuclear ‘Eurodeterrent’ should be shelved, with the focus as much as possible on acquiring tangible capabilities, getting the defence architecture right, ensuring operational readiness and spending defence budgets smartly.

How to use power

Great powers have traditionally been able to cooperate in certain areas while competing in others. Given their wide reach, powers like the US have generally not allowed disagreement on one issue to interfere with the ability to work together on others.

If the EU aspires to be a more assertive global player, it will need to grow comfortable with this compartmentalization. For example, if Brussels wants to stand up to Beijing regarding human rights, the South China Sea or issues of acquisition of European infrastructure, this should not mean that cooperation on areas such as peacekeeping, arms control or climate change needs to be blocked.

Footing the bill

Ursula von der Leyen, the new commission president, has announced that she wants an increase of 30% for external action in the 2021–27 Multi-annual Financial Framework (the EU budget). But with the Brexit budget gap looming, and little appetite to increase contributions or reduce the funds allocated to costly schemes, like the Common Agricultural Policy, compromises will have to be made for this to happen.

This will be one of the first key tests for the new commission. Power costs money, not just gestures, and therefore specific commitments already made under the Juncker mandate regarding the European Defence Fund or the new Neighbourhood, Development and International Cooperation Instrument need to be guaranteed, if not expanded.

Internal politics

None of these steps are possible if the internal workings of the EU become too dysfunctional. A stronger stance internationally would make the sometime incoherence of internal EU management more of a liability to the bloc’s credibility. For example, how can the EU advocate for the rule of law beyond its borders while some of its own member states violate the same principles? 

And there remains the perpetual question of how much more power member states are willing to cede – if any – to deliver faster and more efficient decision-making. If the bloc’s reflexes – often slow, consensual and risk averse – are out of place with the role of a modern great power, how does the commission envision introducing decision-making mechanisms, like qualified majority voting, in foreign and security policy matters?

Borrell’s résumé shows his extensive experience in handling critical policy dossiers. He is also expected to travel less than his predecessor, being mindful of the even heavier institutional work ahead, not least in working with a more politically fragmented European Council and a more politicized European Parliament.

Ultimately, learning the language of power might mean that the EU finally deals with the basics of international affairs as a coherent and cohesive actor, rather than as an occasional ensemble. This endeavour clearly lacks a fixed path or destination. But the new commission seems to be mindful that the EU will have to find new ways to use power as the world changes around it. In doing so, it should keep in mind that the language of power is best articulated not with words, but with actions.

Genuine ideological differences have returned to British politics. That is as true in foreign policy as in questions of domestic politics. The post-Cold War foreign policy consensus in UK politics around liberal multilateralism is fraying.

This tradition had some key characteristics. It saw Britain as one of the cornerstones of an international order built on a liberal (or neo-liberal if you prefer) approach to economic globalization. EU membership was considered central to Britain’s influence and prosperity (even if further political integration never had deep support). Security policy was grounded in a stable package of NATO membership, close ties to the US, nuclear deterrence and a willingness to conduct military intervention.

Both main parties accepted that foreign policy had a commercial dimension. Both were willing to sell arms abroad to regimes with dubious domestic records.

Despite differences of emphasis, and some moments of genuine disagreement, foreign policy did not undergo big shifts as different parties traded periods in office. That may be set to change. 

Party divides

On the one hand, Labour wants to reset and re-orientate Britain’s international role based on human rights and international law. It promises a new internationalism and to end what it glibly calls the ‘bomb first, talk later’ approach, alongside a human rights-driven trade policy. More concretely, it promises to legislate to ensure Parliament takes decisions on military action, boost resources for the underfunded Foreign Office and suspend arms sales to Saudi Arabia for use in Yemen.  

In Jeremy Corbyn, they have a leader with roots in a distinct left-wing ideological tradition of internationalism that blends a commitment to international solidarity alongside anti-imperial and anti-war sentiment. He has spent his career as a sharp critic of Israeli and US policy, while championing various international political causes, some more radical or fringe than others. His historic positions on issues like NATO and nuclear deterrence, while not represented in the party manifesto, demonstrate a personal radicalism that no recent Labour PM has embodied.

His willingness to challenge the failures of the hitherto centre ground of foreign policy – particularly on military interventions from Iraq to Libya – is an under-appreciated aspect of his appeal among many supporters, even while it is one of the sharpest lines of attack from his critics. Boris Johnson’s chauvinistic rhetoric could not stand in sharper contrast to Labour’s commitment to conduct an audit of the effect of Britain’s colonial legacy on violence and insecurity.  

The Conservative manifesto asserts their pride in Britain’s historical role in the world, followed by a broad set of largely rhetorical commitments to bolster alliances and expand influence. An ambitious free trade agenda points to a more economic and commercially driven foreign policy, the inevitable trade-offs and constraints of which are only beginning to be addressed and debated.

There is an underlying sense that Britain will be liberated from the constraints of EU membership, although beyond trade there is little that would not have been possible, or in most cases easier, from within the EU. As my colleague Richard Whitman has observed, the empty bromide ‘Global Britain’ has been dropped altogether, though beyond the idea of a new UK space command and a stronger sanctions regime, there is little that is new or specific.  

Not all the consensus centre-ground position has been abandoned. Both major parties remain committed to spending 2 per cent of GDP on defence and 0.7 per cent of gross national income on development in their 2019 manifestos.

But beyond their manifesto commitments, prime ministers can exercise extensive powers in foreign affairs through the royal prerogative. Their government can choose to recognize other states, as Labour intends to do with Palestine. They can sign international treaties. And at present, in the absence of the sort of war powers act proposed by Labour, they can conduct military action without recourse to Parliament, which has no legally established role in this area.

Even a weak minority government would have considerable scope to transform the tone of Britain’s diplomacy.

Foreign policy as a partisan political issue

If UK foreign policy becomes more partisan, this will have longer term implications. Voters will theoretically have greater scope to shape and influence foreign policy more directly. Foreign policy may become divisive if it becomes more partisan. It may also become less consistent, which will affect the capacity of the UK to show leadership over the longer term on issues on which there is no domestic consensus. Britain’s allies may need to manage a less reliable partner. The diplomatic and security apparatus of Whitehall will need to be more adaptable.  

British elections generally don’t turn on foreign policy questions; 2019 will not buck that trend. At the same time, this election will be very influential in shaping Britain’s position on the world stage and its approach to international issues. Boris Johnson and Jeremy Corbyn represent very different ideas about Britain’s role: its foreign policy, its alliances, and indeed its idea of itself. The Brexit context makes these political undercurrents on foreign policy matter all the more.

Foreign policy may not matter that much to most voters, but these elections matter for foreign policy. 

What does the UK election result mean for Brexit and forthcoming trade negotiations with the EU?

The most important thing is that it means Brexit will definitely happen. Since the referendum, we’ve had three-and-a-half years of continued uncertainty where all outcomes were still possible. We now know that Brexit will become irreversible from 31 January.

That’s the biggest thing, because I think that will have a big psychological impact on politics, both in the UK and also on the EU side. The EU has been working with a partner that has been unsure about its direction, and perhaps some had still hoped that the process might still be reversed, but that direction is now completely clear.

Obviously the first order of business is to pass the withdrawal agreement, which should be pretty straightforward given the majority that the Conservatives have. That’s a formality now.

Then, the question becomes about the level of ambition for the next year. It is an exceptionally ambitious timetable to negotiate, ratify and implement a new relationship before the end of the transition period in December 2020.

What is achievable by the end of next year?

I think there are three possible outcomes here. One: that timetable doesn’t work and Boris Johnson follows through on his pledge to leave the transition period anyway, leading to a ‘no trade deal’ outcome.

Two: the negotiations are able to deliver something by the end of 2020, either because the depth and ambition of any agreement is relatively low level (what Michel Barnier has called a ‘vital minimum’)  and/or because they come up with some type of compromise on the process which is not called an extension, but something else: a type of temporary agreement or a new implementation period.

This is a situation where you might have a bare-bones agreement for the end of the transition period, but with an extended period of negotiation for different unresolved issues. The EU will probably insist upon level playing field guarantees and fishing access rights as a component of any such agreement.

Three: Boris Johnson breaks his manifesto pledge not to extend the transition. Now, he has stared down the barrel of leaving with no deal before and he made a political judgment that it was better to make significant compromises on his negotiating position than to follow through with ‘no deal’. I suspect he might make that same judgment again.

No option is ideal. The first is the most economically disruptive, the second means the EU will be in an even stronger position to dictate terms and the third means breaking a manifesto pledge.

How important is that end of transition deadline now? It was an important issue for the Brexit Party and hardliners in the European Research Group of Conservative MPs. But given the size of a majority, he may need to worry less about them. Is the transition deadline that important to people who voted Conservative, especially if he can show that he has taken the UK out of the EU by the end of January?

I think there may indeed be some political space for Johnson here, given the size of his majority and given that the first phase of Brexit will have been done, along with the debate about withdrawal.

There will be a lot of difficult, technical negotiations in all sorts of areas, some of which I think will become quite rancorous, but won’t necessarily become front page news in the way some of the first phase of negotiations has, not least because you won’t have the theatre of a hung parliament.

Hopefully, there will be more focus on the substance of the agreement, and the debate will be about the consequences of divergence versus staying more aligned with the EU, which is basically the central question now about the future relationship.

I still think for UK prime ministers to pick arbitrary dates, and then to make domestic political promises based around them, actually undermines the UK’s negotiating position. It would be in Britain’s interest to have more flexibility rather than a ticking clock.

Moving to the other big story from the night, the SNP won 48 of 59 seats in Scotland. How does the debate over Scotland’s future in the United Kingdom play out from here?

The SNP has really strengthened its position, more than many expected. This is now set up for a huge constitutional struggle over the future of the United Kingdom.

I think there is a key dilemma for Scottish independence supporters, which is that on the one hand Brexit greatly strengthens the political case for independence. The difference between the political preferences in Scotland and the rest of the UK, particularly in England, is a perfect demonstration of that.

At the same time, once the UK has left the EU, independence becomes much more difficult technically and economically. There will be many of the same difficulties that there have been in discussing Northern Ireland’s relationship with the Republic of Ireland. There will be a difficult debate over the currency. There are all sorts of challenges to creating a trade or regulatory border between England and Scotland. This is particularly true if there is a harder Brexit outcome, where Britain leaves the EU without a large amount of regulatory alignment.

On demands for a second independence referendum, I think in the first instance Boris Johnson will simply refuse to hold one. It’s probably not in his short-term interest to do anything else. Theresa May played it this way in 2017, repeatedly saying ‘now is not the time’.

In a similar way I think Johnson will just try to ride the pressure out, to the point where the SNP will need to face the challenges of advocating independence with the UK outside the EU. The next flashpoint will be the elections to the Scottish Parliament in 2021.

Ultimately, though, it will become a democratically unsustainable position if Scotland continues to vote for the SNP, and refusing to sanction a second independence referendum might only reinforce that sentiment.

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In recent decades, political party systems across Europe have fragmented and electoral volatility has increased. The number of parties represented in parliaments across the continent has grown and the formerly dominant mainstream parties have seen their support base collapse, forcing parties into often uncomfortable and unstable coalitions.

From the United Kingdom to Germany, politicians and commentators talk of such scenarios in often apocalyptic terms and associate it with political instability and policy paralysis.

They shouldn’t. Instead they should focus their energy on making these increasingly competitive political markets work.

The Netherlands is frequently held up as a prime example of this process, which is therefore sometimes referred to as ‘Dutchification’. Its highly proportional political system has created the opportunity for new parties and specific interest groups to win parliamentary representation, ranging from an animal rights party and a party catering specifically to the interests of the elderly.

This has been accompanied by increased electoral volatility. In the 1970s, less than 15% of seats in the Dutch parliament would change party at any election, but in the last election in 2017, this was just over a quarter. The system also created space for the relatively early rise of populist far-right parties, though it was not the cause of their rise.

Nevertheless, despite the regularly difficult coalition politics, it remains one of the most well-governed countries in the world.

A short history of fragmentation

Looking at the effective number of parties represented in parliaments, the number of parties, corrected for their size, provides a good measure of the extent of fragmentation. In the Netherlands this steadily increased from around four in the 1980s to over eight following the election in 2017. Even the populist far-right vote has fragmented, with two parties partly competing for the same electorate. In other countries it has been a more recent phenomenon. Spain remained a de facto two-party system until the financial crisis. Dissatisfaction with both mainstream parties has seen challenger parties on both the left and the right attract significant support, making it harder to form stable coalitions. Political fragmentation decreased slightly in Italy in recent years, but that was from a high base as it shot up in the early 1990s when the post-war political settlement crumbled.

German politics, long a hallmark of stability, is struggling with the decrease in support for the parties that dominated its political scene in the post-war period. The Christian Democrats and Social Democrats only barely managed to win a majority together in the election in 2017, at 53.4% of the vote compared with the 81.3% achieved 30 years earlier. The latest polls suggest they would only get to 40% together if an election were held today.

A similar trend is visible within the European Parliament. Whereas the two largest groups in the European Parliament, the Christian Democrats and the Social Democrats, together won 66% of the vote in the election in 1999, they did not even manage to win a majority together in 2019, taking just 39.5% of the vote.

No crisis of democracy

If electoral volatility and political fragmentation does indeed constitute some sort of crisis of democracy, we should expect to see voters become unhappy about how their national democracy functions. Largely, the opposite seems to be the case.

In the Netherlands, satisfaction with its democracy went up at the same time as Dutchification did its work. Similar trends are visible in other highly fragmented European political systems, often those with very proportional systems. Despite regular minority governments, satisfaction with democracy is above 90% in Denmark and at 80% in Sweden, according to the latest Eurobarometer data.

In comparison, it stood at 52% in the United Kingdom and 53% in France, where the electoral system has, at least on the surface, prevented the kind of fragmentation supposedly plaguing proportional systems.

Satisfaction with democracy seems to be affected by a number of factors. This includes the state of the economy, particularly in countries that were hit the hardest by the global financial and euro zone crises. Nevertheless, the data suggests that, even if we can’t say that Dutchification by definition leads to more satisfaction with democracy, it is clearly not associated with falling faith in the system.

A competitive political market

Dutchification should be seen as accompanying a more competitive political marketplace. A more emancipated, demanding and politically engaged electorate than in the post-war decades is willing to shop around instead of merely vote according to socioeconomic class or other dividing lines, such as religious ones. The fragmented parliaments that emerge as a result provide better representation of different groups within European societies.

This makes life harder for Europe’s political parties and politicians, as they juggle large coalitions, or changing coalitions under minority governments, but provides voters with more choice and democratic renewal. If handled correctly this would also allow more responsiveness to shifts in public opinion.

Such democratic creative destruction in competitive political markets is to be celebrated in a well-functioning democracy. Just as companies prefer to operate in an oligopoly, political parties prefer the stability of limited political competition. But wishing for this kind of stability comes perilously close to preferring stability over proper representation.

Worrying about Dutchification risks confusing a crisis of the traditional mainstream parties with a crisis of democracy. For some countries, particularly those like the Netherlands and Denmark which have longer histories of consensus-based politics and coalition building, this is an easier adjustment. But this should not be an excuse to not attempt to make politics work better as they were forced to go through, arguably still ongoing, adjustment processes too.

Instead of investing in futile attempts to get back to how things were in the old days, or hoping this will somehow magically happen, political leaders and parties across Europe need to reassess how they deal with the new reality of Dutchification.

This will be done through examining transatlantic approaches and responses to China through the lens for four key themes (digital technology; trade and investment; governance of global commons; and climate change and the environment) that have been identified as crucial to developing effective policy responses and fostering collaboration.

The project will strengthen national, regional and international responses to the risks and opportunities posed by China’s changing role within the global economy and international rules-based order.