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David Cameron has had a busy start to the year. In early February he visited Libya and Algeria. A couple of weeks later he was in India with the largest trade delegation ever assembled by a British Prime Minister. Before that he had given the long-awaited speech on Europe in which he finally promised a referendum after the next election. What does all this tell us about British foreign policy?
Following the last election, in the resolution on the British Situation adopted by the Congress of World Revolution in the autumn of 2010, we noted that the coalition government had already begun to explore how to escape from the impasse in foreign relations that was the result of the adventures of Blair. We identified two strands to this, firstly, an attempt to cultivate new relationships with countries such as Turkey and India, while still trying to balance between the US and Germany and, secondly, a more vigorous effort to build up trade to help the recovery from the economic crisis. In April last year, we noted that Britain had notched up a success with its intervention in Libya and that Cameron had effectively managed the European situation, both in terms of resisting proposals that would have affected the financial sector in Britain and in terms of keeping the Euro-sceptics in his party more or less in line.
The foundations of British foreign policy
The starting point for an understanding of British policy is the material interests of the ruling class. At the economic level, as we showed in World Revolution no. 353, Britain has strong trade links with Europe (its main partner) and the US (its most profitable partner) but also important links to the rest of the world. The present situation is one where there continue to be significant shifts, with Europe’s share of global production (currently 25% according to Cameron’s speech on Europe) set to decline significantly. China is continuing to increase its share as part of the wider shift of production from the old centres of production in Europe and the US and is likely to become the biggest producer in the world in the near future while India is predicted to move into third position. These developments have been underlined by the latest report on Britain’s trade by the Office for National Statistics: “By area, there has been a shift in the pattern of the UK’s trade over the past 10 years. In 2002, around 62% of the UK’s exports went to the rest of the EU… 59% of our imports came from the EU. In 2012, those proportions had been reduced to 51% and 50% respectively… Trade with France also grew modestly over this period; at around one-quarter the rate of growth of trade with Germany, which became our largest trading partner (taking exports and imports together) in 2012, supplanting the United States.”
Within this shift the group of countries known as the BRICS (Brazil, Russia, India, China, South Africa) have a particular significance, with exports to the whole group increasing by 37.6% since 2008. This is led by exports to China, which have grown more than fivefold between 2001 and 2011, while exports to India have also risen significantly.
The question of Europe also has a weight. While the danger of an immediate collapse of the Eurozone seems to be passing, the longer-term and more significant legacy is what the crisis reveals about the historic decline in Europe’s status within the global economy.
Such economic factors do not translate in a straightforward manner into foreign policy. Rather, they help to shape the context within which that policy is developed.
At the imperialist level, some of the members of the BRICS have also assumed a greater significance. Again, this is first and foremost the case with China, which is using its economic power to build up its global strategic weight and is aspiring to become a global power capable of challenging the US. The British ruling class is alive to these real and potential shifts in the global balance of power, while remaining pragmatic enough to know that it still has to take account of the US and Europe.
The consequence of these economic and geo-political developments, which contribute to the uncertainty and complexity of the international situation that has developed since 1989, is that the interests of the British bourgeoisie currently seem to be best met by a policy of flexibility. The changing global situation offers the British bourgeoisie scope for action beyond the confines of recent years, although this in no way implies that it can escape its past and the historic decline of its power and status on the world stage.
The economic dimension of foreign policy
The changing global economic context referred to above was at the heart of Cameron’s speech on Europe: “The challenges come not from within the continent but outside it. From the surging economies in the east and south”; “The map of global influence is changing before our eyes”; “Taken as a whole, Europe’s share of world output is projected to fall by almost a third in the next two decades.” It is important to acknowledge this reality. The shift in the global economy encapsulated in the term globalisation is real, albeit that it takes place in the period of decadence, which means that it unfolds in a different manner to capitalism in its period of ascendancy. In particular, the changes of recent years do not mean that capitalism has overcome its structural crisis or that it can do so. Indeed, it is the crisis that drives forward the global changes as capital moves restlessly around the world in the search for profit and as nations jostle for position in a world unbound from the ties of the old blocs.
In his speech Cameron put forward five principles “for a new European Union, fit for the 21st century”. The first two of these were competitiveness and flexibility: “Competitiveness demands flexibility, choice and openness – or Europe will fetch up in a no-man’s land between the rising economies of Asia and market-driven North America.” What Cameron means by such ‘competitiveness’ and ‘flexibility’ can be seen in the changes in the labour market where significant steps have been taken over the last 30 or more years to reduce the cost of labour and make it fit in with the needs of capital. The result has been the increase in part time and temporary working, the replacement of higher paid jobs with lower paid ones, the changes in pensions, sick pay and other benefits that most of us have experienced in one form or another. It can also be seen in the relative freedom given to the financial sector with the easing of old regulations and the protection given to the largest institutions.
This is why Britain is unwilling to accept the constraints of the EU, in particular in relation to financial matters given the importance of this sector in generating profits (these may be fictitious at the level of the global economy, but they are fairly real for British capitalism – the price is paid elsewhere). It also makes Britain resistant to the social aspects of Europe that regulate labour and seem to reflect the dominance of the German economy, which has managed to retain a strong and productive manufacturing base in contrast to many other of the advanced economies. This makes it clear that Cameron’s efforts to reshape Britain’s relationship with Europe is not simply an expression of the weight of the Euro-sceptics in the Tory party but is part of the effort to maintain the freedom of action of British capital.
Cameron’s call for greater flexibility also reflects the effort to build up links beyond Europe, which at the economic level means developing relationships with those countries that are gaining economic significance. As we noted above, Cameron marked the start of his premiership with efforts not just to drum up trade, something all Prime Ministers do, but also to build links with the rising economies in the East: “This was evident in the trip to India in July 2010 when a deal to sell military equipment was signed, and has been confirmed in the visit to China in November 2010 with the proposed signing of deals to supply the Chinese market, reportedly worth several billion pounds.”
Cameron has continued this effort with a significant number of trade missions around the world over the last two and a half years. In 2011 he visited Egypt and Kuwait and in 2012 Saudi Arabia (twice), Indonesia, Japan, Burma, Malaysia, Singapore, Brazil, Dubai, Abu Dhabi and Oman. Much of this activity was directed towards selling arms, an area where Britain really does still play a global role. In 2011 Britain had 15% of the world export market for arms second only to the US. It is reported that the arms industry supports 300,000 jobs, but other estimates are much lower and the government has now stopped recording these statistics.
The visit to India in mid-February was just the latest of these missions, albeit the largest with over one hundred companies and other organisations accompanying Cameron. On arriving in India, he declared that he wanted Britain to be India’s “partner of choice” and for the two countries to develop a “special relationship”. He has set a target of doubling Britain’s trade with India between 2010 and 2015 and seems on course to achieve this. According to the Export-Import Bank of India, between 2006 and 2012 India’s merchandise trade increased threefold, from $252bn to $794bn. Britain is the eighth most important destination for Indian exports, accounting for 2.89% of exports in April to September this year and the 21st largest source of imports. British statistics show exports and imports of both goods and service rising three or four fold over the last decade and roughly balancing each other. In 2011 exports of goods totalled £5.69bn and imports £6.09bn with the same figures for trade in services being £2.63bn and £2.45bn. To put this in context, exports of goods to India accounted for just 1.9% of total British exports and exports of services just 1.4% of the total.
One area where Britain hopes to do well is arms sales So important is this that Cameron has had no qualms about announcing that part of the aid budget can be used to fund the military, with the usual hypocritical caveat that it would not be used to funding combat operations or equipment. India is a very tempting market and has been significantly increasing the amount it spends on armaments. A dozen firms linked to arms production were part of the trade mission that accompanied Cameron, including Rolls-Royce and BAE. Britain is not alone in these efforts. The week before Cameron’s visit, President François Hollande of France had spent two days in India failing to finalise a deal worth $14bn to sell French fighters. Cameron made no secret of his intention to persuade India to buy the Eurofighter Typhoon instead, commenting “I think the Typhoon is a superior aircraft”. However, India is aware of the strength of its position and had no hesitation in threatening to cancel a deal to sell helicopters agreed in 2010 because of allegations that bribes were paid to Indian government officials, or in applying pressure for Britain to relax its visa system.
The strategic dimension of imperialist policy
Britain has experienced considerable difficulty in pursuing its strategic interests. There is no simple overlap between strategic and economic interests. For example, as we have just seen, Britain will not hesitate to snatch an arms deal with India from under the noses of the French despite the closer military co-operation since the last defence review.
As we mentioned at the start of this article, since coming to office Cameron has looked for ways to escape from the impasse that was the legacy of New Labour’s more grandiose imperialist efforts. One aspect of this has been the closer military co-operation with France, which also has the effect of counter-balancing Germany’s dominance in Europe (a dominance it has sought to advance on the back of the economic crisis, albeit with some genuine reservations about the cost of doing so). The successful intervention in Libya was the first fruit of this approach, although the increasing violence and factionalism has tarnished this somewhat. The recent intervention in Mali to support the French military action, and the visit to Algeria in the aftermath of the hostage crisis in January, were both opportunities seized to continue this effort. The intervention in Mali was obviously the more carefully planned of the two and, in addition to the logistical and training help that has been announced, it is quite possible that British special forces are on the ground. While Britain does not have the same historic interests in the region as France it certainly has some current economic interests in the Algerian energy resources, as well as a more general strategic interest in having a presence in a continent that is gaining in strategic importance. These are steps to help Britain reassert its claim to be a global player and this may explain why Cameron chose to echo Blair with talk of a generational struggle against terrorism, despite the evidence that the groups in Algeria and Mali have only limited links to al-Qaida and far more local aspirations.
The visit to India was also about more than trade, since India has regional aspirations of its own and is part of the increasing imperialist tensions across Asia that are driven in particular by the growing international assertiveness of China.
This is not a break from the idea of the independent course which in our analysis has been defended by the majority of the British bourgeoisie over the last two or more decades. Rather it represents its adaptation and continuation within the current international situation. This situation has become more complex and more uncertain in recent years as a result of the economic crisis, the growth of imperialist rivalries and changes within the ruling class of some countries, notably those affected by the ‘Arab spring’ but also those, such as Mali, where the ruling faction is losing its grip. This complexity, while challenging and dangerous, also offers opportunities for a secondary power like Britain which, while it can no longer aspire to dominate any significant geographical area, can still draw on the strength of its military forces and the depth of its historical experience to try and carve out a niche for itself. There is nothing certain about this and Afghanistan and Iraq stand as warnings about having pretensions that no longer match reality. The British ruling class is still struggling to come to terms with these facts, even if Cameron has so far appeared more realistic than Blair. But then Blair also seemed quite realistic until 9/11.
Differences within the British bourgeoisie
The flexibility of Britain’s imperialist and global economic policy is an intelligent and pragmatic response to its situation, which, despite Cameron’s successes, remains very difficult. But it also underlines the fact that there is significant scope for differences within the British bourgeoisie. In the 1990s we noted the existence of a pro-US faction within the British ruling class at the imperialist level and contrasted it with the independent line favoured by the majority. In hindsight, this was probably too simplistic an analysis, since the differences were probably more nuanced than being simply pro-US and anti-US and the factions more balanced that we assumed at the time. Today, it is clear that this debate continues and has been reinforced both by the failures under Blair and the changes in the international situation.
A division has now opened up over economic policy that did not seem to be there yesterday, with the Tory party largely dominated by the Euro-sceptics and a minority more and more openly calling for Britain to leave the EU. However, on the whole this is not an outright rejection of all things European but an expression of genuine differences of view about how Britain’s economic interests can best be served. Even those who want to leave the EU still want to maintain strong trade and financial links, but they also want to be free to reinforce links elsewhere in the world. Cameron shares some of these aims but not the approach to realising them, possibly because he sees the risks in doing this: for all the changes referred to the current reality is that Europe is Britain’s largest trade partner and is likely to remain so for some time. Thus, leaving the EU could have serious consequences.
In this light the promise, or threat, of a referendum on the EU is a way through the current pressures. On the one hand, it is a bargaining chip in negotiations with Europe, on the other, it is a bargaining chip to maintain the unity of the Tory party. Cameron was also quite explicit in his speech on Europe that he wants to delay the referendum to see how the crisis in the Eurozone is resolved: “A vote today between the status quo and leaving would be an entirely false choice. Now – while the EU is in flux, and when we don’t know what the future holds and what sort of EU will emerge from the crisis – is not the right time to make such a momentous decision about the future of our country.”
Nonetheless, the promise to hold a referendum has prompted a response from pro-Europeans, both from within the Tory party and from within big business, for whom the single market and the single currency is seen to be in their interests. There has also been a response from the US for whom the British presence within Europe acts as a counterweight to Germany. In short the question of Europe, like the wider questions of Britain’s economic and imperialist future is not settled.
. See “Britain: economic crisis and imperialist dead-ends” in World Revolution no. 340.
. See “Why British capitalism needs the EU” in World Revolution no. 353.
. ONS, “UK Trade, December 2012”
. ONS United Kingdom Balance of Payments (the “Pink Book”) 2012. That said, the balance of trade in goods has been negative throughout this period and is only minimally reduced by the positive balance of the trade in services
. Taken from the text of Cameron’s speech published on the Guardian website, 23/01/13
. “Britain: economic crisis and imperialist dead-ends” in World Revolution no. 340.
. Cited in a report on the Guardian website.
. Quoted in “David Cameron seeks to recast ‘special relationship’ with India”, Guardian, 19/02/13
. See “Al-Qaida: how great is the terrorism threat to the west now?”, Guardian, 29/01/13.