The United Kingdom and the Asia-Pacific Region

Stephen Lillie, Director for Asia Pacific in the FCO, at the Carnegie Endowment in Washington D.C.

Stephen Lillie

The United Kingdom and the Asia-Pacific Region

It’s always a pleasure to be in Washington DC, and I’m honoured to have this opportunity to address such an important and well-informed audience here at the Carnegie Endowment. Many thanks to Michael Swaine and the team at Carnegie for hosting me today.

It’s a pleasure too to take a couple of days away from the office in London, from following the discussions at the Chinese National People’s Congress and looking forward to the Korean Workers’ Party Congress in May…and to experience some real politics, here in the U.S….to see close up the election process which is transfixing many of us in the UK…to find out what the experts really think about the electoral prospects of Frank Underwood…

In all seriousness though, TV is not a bad place to start. In Britain the news screens are dominated by the EU debate, European migration, Russian aggression, the Middle East, the U.S. primaries. Asia gets a lot less air time. But my central message today is that, despite this, Asia – and in particular East Asia and the Pacific, matters to the United Kingdom.

In my following remarks I will describe the UK’s growing engagement with the Asia-Pacific region. I will highlight its importance to Britain and Europe as an engine of global growth and prosperity. I will reject the perception that our engagement is limited to commerce, or to any single country in the region. The importance of Asia-Pacific is strategic as well as economic, and while we are enthusiastic about the opportunities, we - like the U.S. - are also concerned about the trend towards strategic tension. Against that background, the case for Transatlantic dialogue and collaboration in the region is as strong as ever: to ensure a prosperous and stable Asia Pacific, underpinned by respect for the Rules-based international order.

The UK of course is no stranger to Asia-Pacific. We’ve been trading with the continent for four centuries. The historic political and people-to-people links are numerous, nowhere more so than in Commonwealth countries such as Australia, New Zealand, Malaysia and Singapore, with whom we also have a unique military partnership in the form of the Five Powers Defence Arrangements; or Brunei, where we have a military garrison. Our links are particularly evident in Hong Kong, where the common law system and separation of powers are an essential British legacy and the cornerstones in that city’s continuing success as an economic and financial hub.

Distance was never an inhibition to British engagement with Asia, and it is even less of an obstacle in a networked world. Since David Cameron first became Prime Minister in 2010, the British Government has been looking East again with renewed vigour - with a deliberate increase in diplomatic resources, high-level visits and new bilateral dialogues. This is our very own pivot to Asia, or if you prefer, our own rebalance.

We have invested in new partnerships, upgrading our relations with China, and devoting new attention to the emerging powers of ASEAN, where we now have an ambassador or high commissioner in all ten capitals. One of the big news stories of last year was President Xi Jinping’s state visit to London – and it was a huge success, in public and private - but I’d like to highlight the fact that Prime Minister Cameron’s first visit outside Europe following his re-election last year was to Jakarta, Singapore, Hanoi and Kuala Lumpur…a clear signal of commitment to ASEAN and the importance that we attach to it.. as the centre of Asia’s economic and security architecture…and as the world’s newest single market. On Monday this week we hosted the Vietnamese Deputy Foreign Minister in London for the UK-Vietnam Strategic Dialogue.

Our British rebalance has also meant reinvesting in established friendships… with Australia and New Zealand, home between them to almost 1.5 million Britons… to South Korea where our soldiers fought shoulder to shoulder in the Korean War and which is now also a key partner for high-tech collaboration… and with Japan, a country whose existing investments in the North-East of England alone produce more cars than the whole Italian automotive industry and which has now established itself as Britain’s closest security partner in the region.

Our engagement with Asia Pacific is structured according to the three pillars of the Government’s National Security Strategy published last December: protecting our people, projecting our global influence, and promoting our prosperity. These are largely self-explanatory, but it’s important to note that a key element of the projecting global influence objective includes promoting respect for, and protecting the integrity of the rules-based international order.

There is no disputing that prosperity is a key driver of our engagement with Asia-Pacific, as it is for other European states and for the U.S. This will continue to be the case. Even as the Chinese economy enters its most challenging period since the relaunch of reform and opening by Deng Xiaoping in 1992, the fact remains that Asia-Pacific will be one of the essential engines of global growth. The British government is supporting our companies to expand their business in the region, both by hands-on trade development assistance and by leading the push to expand the European Union’s network of free trade agreements with different Asia-Pacific countries. The EU-Korea FTA is already delivering significant benefits to UK exporters of goods and services; agreements with Vietnam and Singapore await ratification; the EU-Japan Economic Partnership Agreement is at an advanced state of negotiation. We want to see negotiations on the EU-Thailand FTA – in abeyance since the 2014 military coup – restarted.

But the idea that the UK is only interested in commerce in Asia is wide of the mark – just as it would be equally wrong to say the U.S. is only interested in security. The two are inseparable. You can’t have a prosperous region if its member nations feel insecure. That is why we have been steadily upgrading our defence cooperation with Japan, including through a 2+2 mechanism, the latest round of which was held in Tokyo in January. The corresponding mechanism with Australia, known as AUKMIN, takes place in London in spring, and Asian security will top the agenda.

As the only western member of the P5 countries to have an embassy in Pyongyang, we take a close interest in the threat to international peace and security posed by the DPRK, and co-sponsored last week’s Security Council Resolution 2270 in response to the recent North Korean nuclear test. We have been an active contributor to domestic peace processes in South-East Asia, in the southern Philippines and in Burma, drawing in part on our successful experience of conflict resolution in Northern Ireland. We will continue to support these processes beyond the forthcoming political transitions in both countries. And we will continue to work with Indonesia and Malaysia to counter the threats of extremism and terrorism.

Our engagement with Asia-Pacific is underpinned at every level by our support for fundamental global values, including human rights, democracy and respect for the rules-based international order, which we have worked jointly with the US to promote and project over the past 70 years. From speaking up for democracy in Burma and Thailand, to highlighting human rights abuses in Vietnam and China, to championing the rules-based trade and investment regime across the continent, we – and the rest of the European Union - reject the proposition that Asia should operate according to a different set of rules or values to the rest of the global system.

Indeed, the example of Burma is particularly poignant in this regard, as that country goes through a remarkable period of transition from dictatorship to democracy. Britain, the U.S., and like-minded partners can take satisfaction in the support that we have offered to the Burmese people on this journey over many years. Although significant challenges remain, this transition should stand as an inspiration to the rest of South-East Asia; for together, the ASEAN member states have the potential – if they choose – to make their region a model of democracy, human rights, rule of law and open trading economies in Asia-Pacific.

Our emphasis on the rules-based international order is nowhere more relevant than in respect of the situation that we currently see in the South China Sea. The tensions we see there worry Britain and Europe, just as they worry you here in the U.S. To be clear: Britain, like the U.S., does not take a position on the individual claims in the South China Sea. We do take a view on how they are pursued. The UK opposes any actions which are likely to increase tensions in the South China Sea, including militarisation. We urge all parties to exercise restraint, to pursue the settlement of disputes peacefully in accordance with international law, and to uphold freedom of navigation and freedom of overflight. We are taking a close interest in the international arbitration in The Hague, and have stated publicly that its decision will be binding on all parties.

So I hope it’s clear that we take a broad view of our interests in Asia-Pacific, and that our engagement spans the region. Ours is an all-of-Asia policy. Or to paraphrase Lyndon B. Johnson, when it comes to the Asia-Pacific, Brits can walk and chew gum. Accordingly, the proposition that we’re only interested in China, and that that interest is exclusively commercially driven, is wrong. Yet I am well aware that this is not necessarily the view in parts of Washington, and that there have been misgivings here about our approach to China. So let me now say something about that particular element of our Asia policy.

First, our China policy is ambitious. It is ambitious in scope; ambitious in terms of what we seek to achieve; ambitious in terms of what we expect of China. I will return to that.

Second, our policy is based on openness. We are open to Chinese business and investment. For example, we are developing new areas of financial services cooperation between London, Hong Kong and Shanghai, with the first renminbi clearing bank outside China and Hong Kong, and the first RMB sovereign bond issue in Europe. We are welcoming China as an investor in our new generation of civil nuclear power generation – along with France and Japan.

We are open to Chinese people. We have around 130,000 Chinese students in the UK. Our new two-year multiple entry visa service launched in January will facilitate increased numbers of students, business visitors and high net-worth tourists. (Our goal, incidentally, is to emulate the US ten-year visa).

And we are open to Chinese innovation and ideas, including on the Asian Infrastructure Investment Bank, where UK and wider European involvement has produced a credible new institution which the World Bank and Asian Development Bank are willing to do business with.

But openness is not a one-way street. So we are pressing hard for China to reciprocate the access it enjoys in Europe with similar opening at home, including through a high-quality EU-China Investment Agreement. And we have made clear to the Chinese that we have a stake in them successfully delivering the ambitious economic reform agenda which was set out at the third Plenum. The extent of our economic interconnectedness makes this a crucial issue for the UK, as for the US and the other major economies.

Openness does not mean being naive. To quote our Foreign Secretary, we approach China with our eyes open. British ambition goes hand-in-hand with British realism. We don’t ignore the risks, or avoid disagreements…. on international issues - including the use of cyber-space… on regional issues – including the South China Sea… or on Chinese domestic issues where we have a legitimate interest – for example human rights, or Hong Kong.

The third point I want to emphasise about our China policy is that it is not narrowly bilateral. It is anchored in our regional approach as part of our All-of-Asia policy, recognising the interdependencies between what we do with China and our engagement with China’s neighbours. And it seeks to multiply impact by working closely with the rest of the European Union – not just on free trade agreements, but because the EU is fundamentally a rules-based organisation committed to universal values.

More than that, our policy seeks to engage China on the global stage – hence the label we have agreed with Beijing of a “comprehensive global strategic partnership”. The defining challenges of the early 21st century cannot be tackled by one country alone but through international partnership. Whether we are talking about climate change or global pandemics; international terrorism or nuclear proliferation; protection of intellectual property rights or the humanitarian challenge of Syria… China as a leading global economy and a 21st century major power has a role to play.

This is not what we hope to see, but what we require. As Spiderman and some of our other great countrymen have said – Winston Churchill and Teddy Roosevelt among them – with great power comes great responsibility. China has derived great benefit from the post-war international settlement. It has a responsibility to support the rules-based international order – and every interest in doing so.

Mr Chairman, Ladies and Gentlemen, many commentators describe the US-China relationship as one of competition and cooperation. I will close my comments by suggesting that the same might be said, but in a more positive way, about Transatlantic coordination on Asia-Pacific. On the one hand there has always been legitimate and healthy competition between friendly nations for commercial advantage in overseas markets, including in Asia. This will continue to apply between Europe and America, as it applies within Europe itself.

But this cannot disguise or stand in the way of our shared values and strategic interests, including in a prosperous and stable Asia Pacific region, underpinned by respect for the Rules-based international order. The tone of U.S. and European discussion of Asia-Pacific will sometimes vary. But when it comes to the substance, there is much less to divide us than some have suggested and much to unite us. In that respect, the potential for Transatlantic cooperation on Asia is as great as it ever has been. Thank you.

Published 15 March 2016