The UK in the Asian Century

Minister for Asia spoke at the Carnegie Institute, Washington, on how a prosperous and stable Asia Pacific matters to British interests.

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

The Rt Hon Hugo Swire

Minister for Asia, Hugo Swire said:

Thank you to Doug Paal for his kind introduction. I am delighted to be here, and grateful to the Carnegie Endowment for hosting this event. As the British Foreign & Commonwealth Office’s Minister of State for Asia, it is a particular pleasure to be here in Washington which, as befits the capital of a truly great Pacific Power, has the highest concentration of Asia experts in the Western world. I’m told, in fact, that the number keeps growing, with a whole new industry now devoted to analysing the Rebalance to Asia.

We have keenly followed this evolution in your Asia policy. But my purpose this afternoon is to describe Britain’s own shift of focus to the East. We too recognise the eastward shift in global economic and political influence, and its importance to our future. Over the past four years the British government has refocused the UK’s diplomatic effort towards the world’s Emerging Powers, and significantly upgraded our engagement with the Asia Pacific region.

So my message today is simple. A prosperous and stable Asia Pacific matters to British interests. And in a networked world, where physical geographical distance becomes steadily less important in determining global affairs, this will continue to grow as a shared interest in relations between the UK and US. We both want a rules-based and not power-based system in the Asia Pacific region.

I’m British, so you would expect me to start with some history. As you know, the UK is no stranger to Asia-Pacific. The first British attempt to find a trade route to China was made as early as 1596. It may have taken us forty years actually to find it, and another thirty to establish a trading post, but these early lessons in persistence have paid off. Our historical commercial ties have endured, not least through some of the famous old British trading houses in Hong Kong - Jardine Matheson, for example, and one whose name might sound familiar, the Swire Group, founded by my ancestor John Swire, which opened a branch office in Melbourne in 1855, trading everything from fencing wire and cement to olive oil and Guinness beer, and which set up its first Asia operation in Shanghai in 1866, sending cotton out to China and importing tea and silk back to the UK. For the record, my ties to Swire’s today are genetic but, sadly, not financial.

Our historical military links also still have relevance today. You will be well aware of our continued participation alongside US and other forces in the UN Command in South Korea, dating back to our joint endeavours in the Korean War. I was honoured to attend the unveiling of plans for a Korean War Memorial in London, not before time, by President Park and the Duke of Cambridge last November. Looking further back, on 4th August we will be holding a special service to commemorate the extraordinary Commonwealth contribution to the First World War, in this the centenary year. A number of countries in Asia Pacific still maintain immaculate Commonwealth War Graves sites, in which British soldiers lie alongside soldiers from right across the region, having together paid the ultimate sacrifice to defend the freedoms that we enjoy today. I visit these sites wherever I can and it is, without fail, a tremendously moving experience. In total, 1.7 million men and women from the Commonwealth Forces died in the two World Wars. But we are fortunate at least in the legacy of these historical alliances, in our membership of one of the very few multinational defence structures in the Asia Pacific, the Five Power Defence Arrangements – alongside Australia, New Zealand, Malaysia and Singapore – as well as in our Ghurkha garrison in Brunei.

More broadly, the Commonwealth gives a unique extra dimension to our relations with many countries in the region – those I have just mentioned, plus several of the Pacific Islands. We are often referred to as the Commonwealth Family, as a diverse but deeply entwined group of nations. We will be coming together next week in Glasgow at the Commonwealth Games. The US, of course, is yet to apply for membership of the Commonwealth - although it is never too late – but that does at least give us a better chance of success at the Games than we had at Wimbledon this year, or at the World Cup.

This history is a strong base, but we are now of course looking to the future. When our Government took office in 2010, we made a strategic decision to expand Britain’s relations East and South – in addition to further strengthening bilateral ties with our closest friends in North America and Europe.

This has meant boosting our diplomatic resource across the Asia Pacific region. We are one of very few European countries with an Embassy in every ASEAN country, having reopened in Laos in 2012. We have created 60 new positions in our Embassies in the Asia Pacific, as well as the same number again specifically in our posts in China. By the end of this year we will have also opened a new Consulate-General in Wuhan, and increased by 50% the number of Mandarin speakers among our staff since 2010. We have also increased our specialist Asia team at the Embassy here in Washington.

We have reinvigorated our relationships with our Pacific allies Australia and New Zealand, not least through a highly successful AUKMIN process, similar to your AUSMIN; and we have strong and growing partnerships with the emerging powers of the region, for example Indonesia, the Philippines, and Vietnam. We have hosted President Park and Prime Minister Abe over the past nine months. In fact, our relationship with Japan is an excellent example. Our overall bilateral trade is now worth over £20 billion a year. Japan will deliver three of the first five new nuclear power stations in the UK. The Nissan plant in Sunderland in the North of England makes more cars than all the car factories in Italy.

As well as reinvesting in old friendships we are building new networks for the 21st century. Premier Li, whom we also welcomed to London just last month, described our rapidly expanding relations as an “indispensable partnership”. Following Prime Minister David Cameron’s visit to Beijing, Shanghai and Chengdu last December, with the biggest ever business delegation to leave our shores, our trade with China is at record levels, rising 8% last year; we are the number one destination for Chinese investment in Europe, with more inward investment from China in the last 18 months than in the last 30 years; and we are developing London as the global centre of trading for the renminbi, or “redback” as it is being dubbed now. Indeed, 60% of renminbi trading outside China and Hong Kong now takes place in London.

But our relations are not just about economic benefits for the UK and China. We are also engaging on a range of global issues: from climate change to intellectual property rights; from discussion of development assistance in Africa to dementia and drug-resistant disease. When Premier Li visited London, he and Prime Minister David Cameron met together with heads of the international financial institutions, the OECD, World Bank, IMF and the G20 Financial Stability Forum, an unprecedented format for discussion of shared global economic concerns. And we talk frankly, but constructively, on issues where we have genuine differences, including on cyber security and human rights.

Put another way then, our relationship with Asia Pacific – like that of the US - is multidimensional. It is about building relationships across the whole region; what we describe as an All-of-Asia policy. It is multidimensional because it is about nurturing old friendships and alliances, but also about creating new ones. It is multidimensional because at its heart is the development of bilateral relationships, but also expanding multilateral engagement, especially with ASEAN. Critically, it is multi-dimensional because it is about our economy, our security and our values. Let me say something about why all three matter not only to the UK, but also to our friends and allies, including the US - starting with the economics.

Britain is, at its heart, a trading nation. From the earliest years, as I have said, this powered our engagement with Asia. And business is still today a powerful driver of our interests in the region – as it is for the US. You are all very well aware of Asia’s weight in the 21st century global economy. For the UK, the reputation in Asia of Prime Minister Cameron’s government derives from our commitment, successfully delivered, to restoring British growth. This builds upon the UK’s reputation as a global expert in financial services, the natural European home for foreign investment, and world-leading designer and manufacturer of products and brands, from Rolls-Royce and Mini to Burberry and Scotch Whisky. It means, therefore, not only fiscal discipline at home, but driving our companies’ exports, and encouraging foreign direct investment. And that means looking to Asia and supporting British companies to achieve business success there.

But this has broader implications. As historical pioneers of free trade - and still today, as one of its strongest advocates globally - we are committed to playing a leading international role in improving the conditions for business in Asia Pacific - through open trading arrangements, a level playing field for foreign business, and protection of intellectual property rights. This agenda was at the heart of our G8 Summit last year at Lough Erne. The US, through the Trans-Pacific Partnership, and the UK, through a number of EU Free Trade Agreements, are building 21st century networks to shape the next generation of global trade. It is in all our strategic interests to build together a set of high-quality agreements that set the standards for the region.

In 2011, for example, the EU-Korea Free Trade Agreement entered into force. It was the most ambitious trade agreement ever negotiated by the EU and the EU’s first trade deal with an Asian country. 97% of all tariffs will be eliminated by July 2014. The results have been impressive. In 2012-2013 South Korea was the market that contributed the most to the growth of British exports. We have now initialled an EU Free Trade Agreement with Singapore: the EU’s first Free Trade Agreement with an ASEAN country. We and Japan have committed to an EU-Japan Free Trade Agreement by 2015. And talks between China and the EU are already underway on a Bilateral Investment Treaty. Ultimately we would like to see a full EU-China Free Trade Agreement.

However, Britain’s relationship with Asia extends well beyond commerce. At the most basic level, as a trading nation, the UK has a strong stake in the peace and stability of the region. A prosperous Asia Pacific cannot be achieved without physical security, within nations and between them.

Although we are not a major military power in the region, the UK makes an important contribution. As well as our military involvement through the Five Power Defence Arrangements and the Brunei Garrison, the Royal Navy continues to work closely with counterparts from the US, China and Japan. HMS Daring and HMS Illustrious were deployed to assist the Philippines in the wake of Typhoon Haiyan in October. And in March, HMS Echo joined the search for missing Malaysian Airlines flight MH370.

We also have significant bilateral defence and security relationships. With Japan, for example – a country with whom the US obviously has its own important commitments - our joint work has entered a new phase. We have made clear that we welcome a greater role for Japan in international peace and security, which will allow more practical cooperation with the UK and other countries in areas such as peacekeeping operations and humanitarian and disaster relief. During Prime Minister Abe’s visit to London, we announced we would develop a “comprehensive framework” to deepen our security co-operation. This builds on an agreement to collaborate on the research, production and development of defence equipment signed last year.

But our commitment to security in the region is not simply a question of physical military engagement. We also stand firmly behind diplomatic efforts to maintain stability and a respect for international law and norms, including the right to freedom of navigation. We are clear that our own prosperity depends on this: trade worth £3 trillion passes through the South China Sea each year. Tensions in the South and East China Seas worry the UK and Europe as they do the US.

This does not mean we take a position on the underlying issues of sovereignty in the South and East China Seas. While the tensions in the South China Sea are for ASEAN and China to solve, both the US and Europe have ideas, expertise and capacity which, offered to the region in a cohesive and consistent way, could benefit all concerned. We encourage all countries in the region to build mutual trust, be transparent about their military development, work for regional stability, and settle disputes in accordance with international law. And we will say when we think that one country or another is behaving provocatively and that regional stability is being put at risk.

Before I move on from our security work, I would also just like to mention what I see as a particular British role in conflict resolution, born of our own recent history. Before I became a Foreign Office Minister, I was Minister of State for Northern Ireland. I am therefore very proud of the specialist part we have played in supporting the Mindanao peace process in the Philippines, not least by sharing our own experiences from Northern Ireland. We have shared this experience in Burma too, where we continue to work with the government, political parties and armed groups to reach a nationwide ceasefire and establish an inclusive nationwide political dialogue. I know from personal experience the difficulties of resolving a long-running conflict. But as Northern Ireland shows, where despite recent challenges all Parties remain committed to maintaining peace, even the most apparently intractable conflicts can be tackled with determination and effort.

The final pillar of our approach to Asia Pacific is the promotion of our values. Throughout the region, Britain speaks in support of human rights, democracy and the rule of law. It is of course vital that like-minded countries in Europe and America, in particular, do so in a concerted and coordinated way. ASEAN, for example, has the potential to become a centre of democracy, universal human rights, rule of law, and open trading economies in Asia-Pacific. But there is nothing inevitable about this, and ASEAN just now is a microcosm for the region, as the levels of commitment to universal values amongst its members oscillate and diverge. The UK and the US have a strong shared interest in an ASEAN more closely aligned. Let me give some examples.

Most recently, of course, we have seen elections in Indonesia, with its 187m voters. Indonesia has largely been a success: we have seen a dramatic transformation from an authoritarian regime to a country promoting its experiences as a role model for democracy in the region and across the Muslim world. We welcome in particular Indonesia’s international leadership on climate change, on which we have worked closely with them; and in promoting and protecting the regional stability so crucial to global prosperity. We hope the election will open a new chapter in the country’s development, and we look forward to working with the new government. The international community should not let up in our support for the democratic path the country has taken.

Burma is at an earlier stage on the same journey. There is a special affection for Burma in the UK, given our shared history, and given the close ties many people still have with Daw Aung San Suu Kyi from her days living in Oxford. I have also taken a close personal interest, visiting twice – including trips to Rakhine State in 2012 and to Kachin State earlier this year, the first Western Minister to travel to the latter since Burma’s independence. Like the US, we believe that the last three years in Burma have seen remarkable change. We have responded to this by lifting EU sanctions, in close coordination with the US. We have also re-engaged with the military through the reappointment of a Defence Attaché and have begun delivering limited military non-combat education courses. I think we are a little more forward than you on the military side: but it is our belief that we must be proactive in our engagement with the Burmese military and to encourage them to play their part in this time of historic transition. However, being a true friend to Burma also means being an honest friend. And we have been honest that much more needs to be done: including constitutional change and credible elections, achieving a peace settlement with the ethnic groups, and improving human rights. There also remains an urgent need to tackle the dire humanitarian situation and underlying inter-communal tensions in Rakhine State and elsewhere in the country. Again, the international community must maintain the collective pressure on this.

However, the tide is not all one-way. Thailand is a reminder that democracy, once achieved, cannot be taken for granted. Like you, we are deeply concerned about the military coup, and like you, we have significant interests in Thailand – not least the 50,000 resident Britons and nearly 1 million tourists who annually visit that country. The suspension of the Thai constitution undermines the prospects of good governance, media freedom and rule of law. We have taken some restrictive measures in our bilateral relationship as a result, in concert with others. We continue to urge the implementation of a timetable to a restored democratically-elected civilian government, in the interests of the people of Thailand. But this is important for ASEAN, too: we all share an interest in seeing the traditional pillars of democracy in ASEAN remaining steadfast.

I have already set out our broad range of shared interests with China; but we and others also continue to raise our concerns about human rights, through mechanisms like the UK-China human rights dialogue. And just last month the Prime Minister and Chinese Premier Li discussed our shared interest in Hong Kong, deriving from our commitments in the 1984 Joint Declaration. It is our view that Hong Kong’s continued prosperity and stability is best preserved through a transition to universal suffrage which meets the aspirations of the people of Hong Kong.

And finally, we cannot talk about values in Asia without talking about the DPRK. You may be surprised that I chose to mention it here, rather than as a security challenge. Of course, there is no country in the region which is a greater threat to global peace and security; we recognise the time and energy invested by the US in managing this, and we will continue to support you. We have an Embassy in Pyongyang, which can engage, carefully and within the limits of what is possible, with the North Korean government and people. Alongside this, we have worked closely with you and with the EU to enforce sanctions, and our message is unequivocal: North Korea must comply with the Non-Proliferation Treaty and with the relevant UN Security Council Resolutions. However, I am also, personally, deeply concerned by the sustained and systematic human rights violations documented by this year’s UN Commission of Inquiry. Alongside international efforts on security, we must maintain a focus on what is a human tragedy on an epic scale. I have been to Geneva twice over the past few months to speak on this, and I welcome this year’s strongest ever resolution by the UN Human Rights Council. Meaningful improvements clearly require a radical shift in how the regime perceives the world. I recognise that this is not going to happen overnight, but I hope that some of its leaders, at least, can understand the opportunities that await a country which takes a chance and opens itself up to cooperation.

In all of our work across Asia, Britain seeks to multiply our impact by working with our European partners. We want an outward-looking, competitive Europe. So we will continue to drive a deeper, more comprehensive EU engagement with Asia. And reflecting the vision for US-EU cooperation in Asia set out in 2012 by then Secretary of State Clinton and High Representative Baroness Ashton, we will argue for the EU’s engagement to complement and not compete with that of the US. Europe has a lot to offer Asia: experience of post-war reconciliation, experience of multilateral co-operation and integration, and the ability to undertake capacity building in areas like the rule of law and protection of intellectual property rights. We have made some progress since 2012. But we can and must do more.

What I have attempted to described this afternoon is Britain’s engagement with Asia Pacific. But there is very little in this that is narrowly specific to the UK. On the contrary, it is my firm belief that in this agenda the UK and the US have significant interests in common: regional stability, open trading arrangements, respect for rights and freedoms and the rules-based international system. Your proximity and unique role as security guarantor in the region give you particular responsibilities. But Britain’s own future is increasingly bound up with that of Asia, giving us the same interest as you in a prosperous and peaceful Asia Pacific. As economic and political power continues to shift East, Britain and the U.S. will have an increasing interest in working together, to harness the opportunities and to manage the challenges that go with this. By closer co-operation on Asia Pacific, we can further strengthen Trans-Atlantic ties and together ensure that both our countries get the best from the Asian Century.

Further information

Follow Foreign Office Minister Hugo Swire on twitter @HugoSwire

Follow the Foreign Office on twitter @foreignoffice

Follow the Foreign Office on facebook and Google+

Media enquiries

For journalists

Published 16 July 2014