There are two well-established ideas in trade. Individually, they are correct. Combined, they can lead to a conclusion that is unfortunately wrong.

The first idea is that, across a range of economic sectors, the EU and the US have been engaged in a battle to have their model of regulation accepted as the global one, and that the EU is generally winning.

The second is that governments can use their regulatory power to extend strategic and foreign policy influence.

The conclusion would seem to be that the EU, which has for decades tried to develop a foreign policy, should be able to use its superpower status in regulation and trade to project its interests and its values abroad.

That’s the theory. It’s a proposition much welcomed by EU policymakers, who know they are highly unlikely any time soon to acquire any of the tools usually required to run an effective foreign policy.

The EU doesn’t have an army it can send into a shooting war, enough military or political aid to prop up or dispense of governments abroad, or a centralized intelligence service. Commission President Ursula von der Leyen has declared her outfit to be a ‘geopolitical commission’, and is casting about for any means of making that real.

Through the ‘Brussels effect’ whereby European rules and standards are exported via both companies and governments, the EU has indeed won many regulatory battles with the US.

Its cars, chemicals and product safety regulations are more widely adopted round the world than their American counterparts. In the absence of any coherent US offering, bar some varied state-level systems, the General Data Protection Regulation (GDPR) is the closest thing the world has to a single model for data privacy, and variants of it are being adopted by dozens of countries.

The problem is this. Those parts of global economic governance where the US is dominant – particularly the dollar payments system – are highly conducive to projecting US power abroad. The extraterritorial reach of secondary sanctions, plus the widespread reliance of banks and companies worldwide on dollar funding – and hence the American financial system – means that the US can precisely target its influence.

The EU can enforce trade sanctions, but not in such a powerful and discriminatory way, and it will always be outgunned by the US. Donald Trump could in effect force European companies to join in his sanctions on Iran when he pulled out of the nuclear deal, despite EU legislation designed to prevent their businesses being bullied. He can go after the chief financial officer of Huawei for allegedly breaching those sanctions.

By contrast, the widespread adoption of GDPR or data protection regimes inspired by it may give the EU a warm glow of satisfaction, but it cannot be turned into a geopolitical tool in the same way.

Nor, necessarily, does it particularly benefit the EU economy. Europe’s undersized tech sector seems unlikely to unduly benefit from the fact that data protection rules were written in the EU. Indeed, one common criticism of the regulations is that they entrench the power of incumbent tech giants like Google.

There is a similar pattern at work in the adoption of new technologies such as artificial intelligence and the Internet of Things. In that field, the EU and its member states are also facing determined competition from China, which has been pushing its technologies and standards through forums such as the International Telecommunication Union.

The EU has been attempting to write international rules for the use of AI which it hopes to be widely adopted. But again, these are a constraint on the use of new technologies largely developed by others, not the control of innovation.

By contrast, China has created a vast domestic market in technologies like facial recognition and unleashed its own companies on it. The resulting surveillance kit can then be marketed to emerging market governments as part of China’s enduring foreign policy campaign to build up supporters in the developing world.

If it genuinely wants to turn its economic power into geopolitical influence – and it’s not entirely clear what it would do with it if it did – the EU needs to recognize that not all forms of regulatory and trading dominance are the same.

Providing public goods to the world economy is all very well. But unless they are so particular in nature that they project uniquely European values and interests, that makes the EU a supplier of useful plumbing but not a global architect of power.

On the other hand, it could content itself with its position for the moment. It could recognize that not until enough hard power – guns, intelligence, money – is transferred from the member states to the centre, or until the member states start acting collectively, will the EU genuinely become a geopolitical force. Speaking loudly and carrying a stick of foam rubber is rarely a way to gain credibility in international relations.

This article is part of a series of publications and roundtable discussions in the Chatham House Global Trade Policy Forum.

The speaker will outline a number of foreign policy challenges facing transatlantic business, such as China’s increasing economic power, turmoil in the Middle East, and Russia’s recent actions in eastern Europe. He will examine how these issues can provide obstacles to cooperation and development, and restrict access to markets, and how they can be addressed. 

The event is part of our series on US and European Perspectives on Common Economic Challenges. Conducted with the support of Bank of America Merrill Lynch, this series examines some of the principal global challenges that we face today and the potentially differing perspectives from the US and across Europe. 

Attendance at this event is by invitation only.

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.

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?  

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. 

There are two well-established ideas in trade. Individually, they are correct. Combined, they can lead to a conclusion that is unfortunately wrong.

The first idea is that, across a range of economic sectors, the EU and the US have been engaged in a battle to have their model of regulation accepted as the global one, and that the EU is generally winning.

The second is that governments can use their regulatory power to extend strategic and foreign policy influence.

The conclusion would seem to be that the EU, which has for decades tried to develop a foreign policy, should be able to use its superpower status in regulation and trade to project its interests and its values abroad.

That’s the theory. It’s a proposition much welcomed by EU policymakers, who know they are highly unlikely any time soon to acquire any of the tools usually required to run an effective foreign policy.

The EU doesn’t have an army it can send into a shooting war, enough military or political aid to prop up or dispense of governments abroad, or a centralized intelligence service. Commission President Ursula von der Leyen has declared her outfit to be a ‘geopolitical commission’, and is casting about for any means of making that real.

Through the ‘Brussels effect’ whereby European rules and standards are exported via both companies and governments, the EU has indeed won many regulatory battles with the US.

Its cars, chemicals and product safety regulations are more widely adopted round the world than their American counterparts. In the absence of any coherent US offering, bar some varied state-level systems, the General Data Protection Regulation (GDPR) is the closest thing the world has to a single model for data privacy, and variants of it are being adopted by dozens of countries.

The problem is this. Those parts of global economic governance where the US is dominant – particularly the dollar payments system – are highly conducive to projecting US power abroad. The extraterritorial reach of secondary sanctions, plus the widespread reliance of banks and companies worldwide on dollar funding – and hence the American financial system – means that the US can precisely target its influence.

The EU can enforce trade sanctions, but not in such a powerful and discriminatory way, and it will always be outgunned by the US. Donald Trump could in effect force European companies to join in his sanctions on Iran when he pulled out of the nuclear deal, despite EU legislation designed to prevent their businesses being bullied. He can go after the chief financial officer of Huawei for allegedly breaching those sanctions.

By contrast, the widespread adoption of GDPR or data protection regimes inspired by it may give the EU a warm glow of satisfaction, but it cannot be turned into a geopolitical tool in the same way.

Nor, necessarily, does it particularly benefit the EU economy. Europe’s undersized tech sector seems unlikely to unduly benefit from the fact that data protection rules were written in the EU. Indeed, one common criticism of the regulations is that they entrench the power of incumbent tech giants like Google.

There is a similar pattern at work in the adoption of new technologies such as artificial intelligence and the Internet of Things. In that field, the EU and its member states are also facing determined competition from China, which has been pushing its technologies and standards through forums such as the International Telecommunication Union.

The EU has been attempting to write international rules for the use of AI which it hopes to be widely adopted. But again, these are a constraint on the use of new technologies largely developed by others, not the control of innovation.

By contrast, China has created a vast domestic market in technologies like facial recognition and unleashed its own companies on it. The resulting surveillance kit can then be marketed to emerging market governments as part of China’s enduring foreign policy campaign to build up supporters in the developing world.

If it genuinely wants to turn its economic power into geopolitical influence – and it’s not entirely clear what it would do with it if it did – the EU needs to recognize that not all forms of regulatory and trading dominance are the same.

Providing public goods to the world economy is all very well. But unless they are so particular in nature that they project uniquely European values and interests, that makes the EU a supplier of useful plumbing but not a global architect of power.

On the other hand, it could content itself with its position for the moment. It could recognize that not until enough hard power – guns, intelligence, money – is transferred from the member states to the centre, or until the member states start acting collectively, will the EU genuinely become a geopolitical force. Speaking loudly and carrying a stick of foam rubber is rarely a way to gain credibility in international relations.

This article is part of a series of publications and roundtable discussions in the Chatham House Global Trade Policy Forum.

As Iraq emerges from the shadow of war and occupation, it has sought to regain influence as a major actor in an ever-more volatile region. Though the 'new Iraq' attempts to project an independent foreign policy, renewed instability and violence inside the country has challenged the state's ability to develop a coherent and unified foreign policy stance.

Jane Kinninmont and Gareth Stansfield will present the findings of their new report which explores how foreign policy in Iraq today is developed and implemented, and analyses the extent to which Iraq's foreign policy aims are identifiable, independent and national in nature. They will also engage in a wider discussion with an expert panel on Iraqi foreign policy, particularly towards the conflict in Syria and how issues in neighbouring states are intertwined with domestic Iraqi politics.

This report aims to shed light on the key actors, processes and narratives that are shaping Iraq's foreign policy behaviour and options, at a time when the country is seeking to emerge from international sanctions and resume a more normal role in international affairs.

• Iraq's foreign relations are increasingly intertwined with the country's own divisions, and the increasing polarization of key Middle Eastern countries over Syria threatens to escalate Iraq's internal crisis.
   
• Syria has become the most divisive foreign policy issue facing Iraq, with little consensus on how to respond to the conflict. To protect against the risk of spillover from Syria, Iraq's political groupings must develop at least a basic agreement on their strategic response to the conflict.
   
• Western governments should caution their allies in the Gulf that the exploitation of sectarian discourses will have toxic effects that could last for at least a generation.

Kazakhstan has attracted international attention due to its energy resources, its relative openness to foreign investment and its proximity to Afghanistan, all of which influence its foreign policy. The withdrawal of ISAF forces from the region in 2014 and Kazakhstan's participation in a number of regional and international initiatives are also likely to play a role in shaping the country's foreign policy in the short to medium term.

Mr Idrissov will outline the main items on Astana's foreign policy agenda for approximately 15 minutes, followed by 45 minutes for questions and discussion.

Attendance is by invitation only. 

As Prime Minster Abe enters his second year in office, the speakers will consider future prospects for Japanese foreign policy and UK-Japan relations. 

This event is funded by the Nippon Foundation. It is held in partnership with the Nippon Foundation and the Great Britain Sasakawa Foundation.

THIS EVENT IS NOW FULL AND REGISTRATION HAS CLOSED.

Australia’s new foreign minister will reflect on the country’s relations and policy priorities within the Asia-Pacific region. The speaker will also discuss how Australia is working to build Asian regional architecture and to strengthen the international rules-based order.

ASK A QUESTION: Send questions for the speaker by email to questions@chathamhouse.org or using #askCH on Twitter. A selection will be put to her during the event.

America is changing. So too is the rest of the world. But will America's internal changes carry broader implications for its role in the world, the influence and power it wields, and the foreign policy choices it makes?

While proving causality would be difficult, commonsense logic might suggest that a youthful America, one that has a more diverse ethnic and cultural makeup and that is more aware of its economic inequality, is also one that might hold more open, accepting (and perhaps liberal) views on a number of issues. However the record is mixed: while in some areas America is becoming more liberal, in others such as gun control and abortion, the trend seems to be towards the conservative.

But America is undergoing some fundamental transformations. America's demographics are changing. Unlike many in Asia and Europe, the US is remaining a relatively young country. It is also becoming more diverse. In 2011, there were more births in the US among minorities than Caucasians (minorities made up 50.4 per cent of the nation's population under one year old). Hispanics are the fastest growing segment of the population.

America, in common with many other countries, is also seeing a dramatic rise in the level of economic inequality. While the 2011 Occupy Wall Street movement spread to 900 cities around the world, the US is perhaps exceptional in the speed with which the social gap is widening and its size. These populations are also swiftly urbanizing.

The number of Americans who do not identify with any religion is growing rapidly. According to Pew Research polling, one-fifth of the US public are religiously unaffiliated today, the highest numbers recorded by them. Younger adults are more likely to have no religious affiliation than their elders, suggesting that this trend is likely to continue.

These changes could be contributing to the possible trend towards more liberal views in the US, led for the main part by cities and states. For example, while federal law continues to ban cannabis, in the summer of 2013, two states – Washington and Colorado – legalized it. Since Massachusetts in 2004 made gay marriage legal, 16 other states (and the District of Columbia) have followed suit, with nine of these decisions taking place in 2013. And, at a federal level, after 18 years of 'Don't Ask, Don't Tell' (the law that prevented military personnel from disclosing that they were gay), the law was finally repealed in 2011 after years of debate.

One could also argue that the slow creep of some Republican platforms towards a more open social agenda is also an indication that, at least politically, some on the right recognize that to be reelected they need to move where they perceive the population to be (i.e. left of their position).

These demographic and political changes are taking place in a backdrop of some other important national trends. Over the past 10 years, the arrival of new technologies, most notably fracking, has led to an energy revolution in the United States. America's trend towards energy self-sufficiency is having a direct impact on the US economy and will have implications for its diplomacy. It is supporting 're-shoring' (the return of jobs to the US) which is rebuilding America's manufacturing and industrial base, and it is helping the US (along with the stimulus and other policies) climb out of recession faster than many of its European allies.

This is taking place in the context of the highest ever levels of political polarization (as measured by Congressional voting). For the first time last year, the most liberal Republican was to the right of the most conservative Democrat; the traditional overlap that facilitated the two political parties working together has now disappeared.

These trends are joined, and at times reinforced, by two other profound global factors: faster technological shifts and the dispersal of power.

As all these dynamics interact it will have implications for America's foreign policy and, as such, should be of interest to an international audience – with a caveat: Americans generally don't appear to care much about foreign policy and as such their impact on it is limited.

At a basic level, a youthful America is a productive one that is likely to retain relatively high growth rates. This is vital for its trading and investment partners, not least in Europe and Asia. While the US will soon have to deal with unaffordable entitlements (such as social security and health care) and needs to reenergize its early education, the fact that it still has a relatively low ratio of retirees to workers, means that it has a bit more time to manage this transition.

America's young and diverse population could also have an impact on America's soft power. The fact that increasing numbers of Americans affiliate as Asian-Americans or Hispanic-Americans (to name but two groups) could have profound effects on how the nation manages its relationships with these regions and is seen by their citizens. The proliferation of communications channels and the empowerment of the individual will only reinforce these tendencies.

The increase in people-to-people links likely to result is also a manifestation of the broader trend of the diffusion of power to other non-state actors. Over the long term, foreign policy is no longer going to be the exclusive right of the state, but other actors, from individuals to philanthropists and businesses, will play a role.

However at some level, while the young are taking advantage of new technologies to engage with their neighbours, and a more diverse population is linking with their families and friends overseas, the rising income inequality could be pushing the globalization agenda in the opposite direction. As those towards the bottom strata find technology taking away their jobs or corporates moving them overseas they are likely to push back. And their ability to be heard (individual empowerment once more) is only increasing.

Two regions in particular are likely to see specific foreign policy changes. In Latin America the inevitable shift on immigration (although it could still be some time in coming) will have potentially huge implications on migration of workers north. At the same time, America's 'war on drugs' has already begun to change under the Obama administration from a historically supply side driven policy to one that accepts (at least rhetorically) the need for addressing the demand side. This more nuanced policy could allow a more balanced policy agenda between the US and its southern neighbors.

And for Europeans, the young increasingly don't remember the Cold War and the importance of the Alliance in and after World War II (Obama is the first US president who didn't live through it). The ties that bind could in time weaken. This is only being reinforced by immigration trends; fewer citizens from Europe come to the US than from any other region of the world.

America is not, as some assert, becoming isolationist. 'Nation-building at home' may be Obama's focus, but this does not precipitate an abandonment of international engagement. These trends suggest instead that America might become more nuanced and collaborative in its relationships. America's diversity has always been a strength and as it increases, will continue to be one. America, more than any other nation, truly continues to be the global melting pot.

This article was originally published by the Huffington Post.

To comment on this article, please contact Chatham House Feedback

The end of 2018 was a monumental year for Latin America’s two biggest economies. In December 2018, Andrés Manuel López Obrador (AMLO) was inaugurated as Mexico’s 58th president. The following month saw another political shift further south, as Jair Bolsonaro became Brazil’s 38th president. While sitting on opposite ends of the political spectrum, both AMLO and Bolsonaro were considered to be political outsiders and have upended the status quo through their election to office. 

To what extent does the election of AMLO in Mexico and Bolsonaro in Brazil represent a shift in those countries’ definitions of national interest and foreign policy priorities? How will this affect these states’ policies regarding international commitments and cooperation on issues such as human rights, environment and climate change, migration, and trade? To what extent do possible shifts reflect changing domestic opinions?  Will any changes represent a long-term shift in state priorities and policies past these administrations?

There are two well-established ideas in trade. Individually, they are correct. Combined, they can lead to a conclusion that is unfortunately wrong.

The first idea is that, across a range of economic sectors, the EU and the US have been engaged in a battle to have their model of regulation accepted as the global one, and that the EU is generally winning.

The second is that governments can use their regulatory power to extend strategic and foreign policy influence.

The conclusion would seem to be that the EU, which has for decades tried to develop a foreign policy, should be able to use its superpower status in regulation and trade to project its interests and its values abroad.

That’s the theory. It’s a proposition much welcomed by EU policymakers, who know they are highly unlikely any time soon to acquire any of the tools usually required to run an effective foreign policy.

The EU doesn’t have an army it can send into a shooting war, enough military or political aid to prop up or dispense of governments abroad, or a centralized intelligence service. Commission President Ursula von der Leyen has declared her outfit to be a ‘geopolitical commission’, and is casting about for any means of making that real.

Through the ‘Brussels effect’ whereby European rules and standards are exported via both companies and governments, the EU has indeed won many regulatory battles with the US.

Its cars, chemicals and product safety regulations are more widely adopted round the world than their American counterparts. In the absence of any coherent US offering, bar some varied state-level systems, the General Data Protection Regulation (GDPR) is the closest thing the world has to a single model for data privacy, and variants of it are being adopted by dozens of countries.

The problem is this. Those parts of global economic governance where the US is dominant – particularly the dollar payments system – are highly conducive to projecting US power abroad. The extraterritorial reach of secondary sanctions, plus the widespread reliance of banks and companies worldwide on dollar funding – and hence the American financial system – means that the US can precisely target its influence.

The EU can enforce trade sanctions, but not in such a powerful and discriminatory way, and it will always be outgunned by the US. Donald Trump could in effect force European companies to join in his sanctions on Iran when he pulled out of the nuclear deal, despite EU legislation designed to prevent their businesses being bullied. He can go after the chief financial officer of Huawei for allegedly breaching those sanctions.

By contrast, the widespread adoption of GDPR or data protection regimes inspired by it may give the EU a warm glow of satisfaction, but it cannot be turned into a geopolitical tool in the same way.

Nor, necessarily, does it particularly benefit the EU economy. Europe’s undersized tech sector seems unlikely to unduly benefit from the fact that data protection rules were written in the EU. Indeed, one common criticism of the regulations is that they entrench the power of incumbent tech giants like Google.

There is a similar pattern at work in the adoption of new technologies such as artificial intelligence and the Internet of Things. In that field, the EU and its member states are also facing determined competition from China, which has been pushing its technologies and standards through forums such as the International Telecommunication Union.

The EU has been attempting to write international rules for the use of AI which it hopes to be widely adopted. But again, these are a constraint on the use of new technologies largely developed by others, not the control of innovation.

By contrast, China has created a vast domestic market in technologies like facial recognition and unleashed its own companies on it. The resulting surveillance kit can then be marketed to emerging market governments as part of China’s enduring foreign policy campaign to build up supporters in the developing world.

If it genuinely wants to turn its economic power into geopolitical influence – and it’s not entirely clear what it would do with it if it did – the EU needs to recognize that not all forms of regulatory and trading dominance are the same.

Providing public goods to the world economy is all very well. But unless they are so particular in nature that they project uniquely European values and interests, that makes the EU a supplier of useful plumbing but not a global architect of power.

On the other hand, it could content itself with its position for the moment. It could recognize that not until enough hard power – guns, intelligence, money – is transferred from the member states to the centre, or until the member states start acting collectively, will the EU genuinely become a geopolitical force. Speaking loudly and carrying a stick of foam rubber is rarely a way to gain credibility in international relations.

This article is part of a series of publications and roundtable discussions in the Chatham House Global Trade Policy Forum.

Conventional wisdom says that foreign policy takes a backseat role in US elections. But last autumn’s Democratic primary debates suggest a potential shift is taking place in the conventional view. While healthcare dominated the discussion (Democrats attribute their 2018 midterm gains to the issue), through November foreign policy followed closely behind in second place in terms of minutes devoted to the discussion.

This trend is consistent with President Donald Trump’s America First approach to foreign policy, in which an eye is always kept on how decisions abroad play for the domestic audience. One former Trump administration official has called this dynamic the ‘recoupling’ of foreign policy with domestic policy.

The US–China trade conflict, which commanded headlines throughout 2019, is perhaps the best example of this recoupling, tying trade imbalances less with the geopolitical than with domestic impact on farmers. Immigration is another policy area in which Trump has linked domestic implications and indeed domestic opinion with foreign policy. It’s in the title: America First.

Now, for better or worse, the targeted killing of Qassem Soleimani, Iran’s response and the subsequent fallout may make US foreign policy towards Iran and the US role in the Middle East a central issue for the 2020 US elections. As it comes just ahead of the Democratic presidential primaries, voters will be looking to the candidates to differentiate their foreign policy experience and proposals for America’s Middle East policy.

To President Donald Trump, Soleimani’s assassination represents a campaign promise kept to confront Iran’s aggression.

The Trump administration initially justified the action by citing intelligence of an imminent threat to US personnel and targets, but after Defense Secretary Mark Esper called this into question, Trump tweeted that ‘it doesn’t really matter because of [Soleimani’s] horrible past’. Ultimately, Trump’s message, on the campaign trail and any general debate stage he agrees to be on, is that he has overseen a new national security strategy for Iran.

Soleimani’s removal from the Iranian calculus is just a part of this broader policy, which also includes neutralizing the Iranian government’s destabilizing influence in the Middle East, denying Iran and especially the Islamic Revolutionary Guard Corps’ access to funding for its malign activities, and rallying the international community against domestic human rights violations and unjust detentions.

To counter Trump, Democrats and democratic presidential candidates would be best-served by offering a simple argument that too links domestic interests and foreign policy: the killing of Soleimani and Trump’s national security strategy for Iran have not made the US or its interests safer.

Iran’s ballistic missile attack on US forces in Iraq, which Iran’s Supreme Leader Ayatollah Ali Khamenei called a ‘slap in the face’ for the US, makes the risks to US assets and personnel abundantly clear. Even if Iran reverts entirely to covert, proxy efforts to counter US interests, the current US–Iran tensions remain unresolved and will likely continue to persist through the 2020 elections in November.

As a matter of the first order, Soleimani was replaced by his deputy Brigadier General Esmail Ghaani within a day of the former’s death, with Khamenei saying that the Quds Force will be ‘unchanged’.

At the second order, Iraq’s parliament voted in favour of a nonbinding resolution to rescind the invitation to US forces, which led Trump to threaten sanctions and demands for reimbursement. Whether US troops will ultimately leave Iraq (following a ‘mistaken’ report that the US was preparing to depart) remains to be seen, but the destabilization of the US military presence in Iraq fulfils a key Iranian objective.

In the interim, the US-led coalition in Iraq and Syria fighting ISIS announced that it would at least temporarily cease its counterterrorism efforts to instead fortify its outposts and prepare for Iranian retaliation, opening a wider door for the resurgence of the terror group.

By arguing that the US, its troops and interest have not been made safer by Trump’s Middle East policy – from withdrawing from the Iran nuclear deal to the imposition of a ‘maximum pressure campaign’ to Soleimani’s killing – Democrats will be able to point to every post-Soleimani US injury, death, regional terrorism attack, asset compromise, cyberattack and shipping disruption as evidence.

Democratic presidential candidates also ought to be explicit about how they plan to manage tensions with Iran – strategic, diplomatic and military – particularly their position on the future of the nuclear deal.

Iran has made clear that the path to de-escalation is through sanctions relief. Asserting leverage need not always involve taking away all of your counterparty’s options (‘maximum pressure’). It also involves knowing what your adversary wants (sanctions relief) and showing a willingness to offer it (especially where it means less to you) in exchange for something of greater worth (avoiding war/a non-nuclear Iran).

Clarity around future policy of a potential Democratic president may bring de-escalation forward in a way that Trump’s statement of Iran standing down are unlikely to do.

There are two well-established ideas in trade. Individually, they are correct. Combined, they can lead to a conclusion that is unfortunately wrong.

The first idea is that, across a range of economic sectors, the EU and the US have been engaged in a battle to have their model of regulation accepted as the global one, and that the EU is generally winning.

The second is that governments can use their regulatory power to extend strategic and foreign policy influence.

The conclusion would seem to be that the EU, which has for decades tried to develop a foreign policy, should be able to use its superpower status in regulation and trade to project its interests and its values abroad.

That’s the theory. It’s a proposition much welcomed by EU policymakers, who know they are highly unlikely any time soon to acquire any of the tools usually required to run an effective foreign policy.

The EU doesn’t have an army it can send into a shooting war, enough military or political aid to prop up or dispense of governments abroad, or a centralized intelligence service. Commission President Ursula von der Leyen has declared her outfit to be a ‘geopolitical commission’, and is casting about for any means of making that real.

Through the ‘Brussels effect’ whereby European rules and standards are exported via both companies and governments, the EU has indeed won many regulatory battles with the US.

Its cars, chemicals and product safety regulations are more widely adopted round the world than their American counterparts. In the absence of any coherent US offering, bar some varied state-level systems, the General Data Protection Regulation (GDPR) is the closest thing the world has to a single model for data privacy, and variants of it are being adopted by dozens of countries.

The problem is this. Those parts of global economic governance where the US is dominant – particularly the dollar payments system – are highly conducive to projecting US power abroad. The extraterritorial reach of secondary sanctions, plus the widespread reliance of banks and companies worldwide on dollar funding – and hence the American financial system – means that the US can precisely target its influence.

The EU can enforce trade sanctions, but not in such a powerful and discriminatory way, and it will always be outgunned by the US. Donald Trump could in effect force European companies to join in his sanctions on Iran when he pulled out of the nuclear deal, despite EU legislation designed to prevent their businesses being bullied. He can go after the chief financial officer of Huawei for allegedly breaching those sanctions.

By contrast, the widespread adoption of GDPR or data protection regimes inspired by it may give the EU a warm glow of satisfaction, but it cannot be turned into a geopolitical tool in the same way.

Nor, necessarily, does it particularly benefit the EU economy. Europe’s undersized tech sector seems unlikely to unduly benefit from the fact that data protection rules were written in the EU. Indeed, one common criticism of the regulations is that they entrench the power of incumbent tech giants like Google.

There is a similar pattern at work in the adoption of new technologies such as artificial intelligence and the Internet of Things. In that field, the EU and its member states are also facing determined competition from China, which has been pushing its technologies and standards through forums such as the International Telecommunication Union.

The EU has been attempting to write international rules for the use of AI which it hopes to be widely adopted. But again, these are a constraint on the use of new technologies largely developed by others, not the control of innovation.

By contrast, China has created a vast domestic market in technologies like facial recognition and unleashed its own companies on it. The resulting surveillance kit can then be marketed to emerging market governments as part of China’s enduring foreign policy campaign to build up supporters in the developing world.

If it genuinely wants to turn its economic power into geopolitical influence – and it’s not entirely clear what it would do with it if it did – the EU needs to recognize that not all forms of regulatory and trading dominance are the same.

Providing public goods to the world economy is all very well. But unless they are so particular in nature that they project uniquely European values and interests, that makes the EU a supplier of useful plumbing but not a global architect of power.

On the other hand, it could content itself with its position for the moment. It could recognize that not until enough hard power – guns, intelligence, money – is transferred from the member states to the centre, or until the member states start acting collectively, will the EU genuinely become a geopolitical force. Speaking loudly and carrying a stick of foam rubber is rarely a way to gain credibility in international relations.

This article is part of a series of publications and roundtable discussions in the Chatham House Global Trade Policy Forum.

The end of 2018 was a monumental year for Latin America’s two biggest economies. In December 2018, Andrés Manuel López Obrador (AMLO) was inaugurated as Mexico’s 58th president. The following month saw another political shift further south, as Jair Bolsonaro became Brazil’s 38th president. While sitting on opposite ends of the political spectrum, both AMLO and Bolsonaro were considered to be political outsiders and have upended the status quo through their election to office. 

To what extent does the election of AMLO in Mexico and Bolsonaro in Brazil represent a shift in those countries’ definitions of national interest and foreign policy priorities? How will this affect these states’ policies regarding international commitments and cooperation on issues such as human rights, environment and climate change, migration, and trade? To what extent do possible shifts reflect changing domestic opinions?  Will any changes represent a long-term shift in state priorities and policies past these administrations?

Summary

• Plans for an EU-wide Energy Union are taking shape, following the European Commission’s adoption in February 2015 of a ‘Framework Strategy for a Resilient Energy Union with a Forward-Looking Climate Change Policy’. The strategy underlines the EU’s ambition to attain ‘secure, sustainable, competitive, affordable energy for every European’.
• The initiative seeks to transform energy markets and energy/climate policy across the EU. Its goals include cross-border coordination and integration in energy security, supply, market operations, regulation, energy efficiency, low-carbon development, and research and innovation.
• There is an important foreign policy aspect to the Energy Union, given the imperative of managing security and supply risks in Europe’s neighbourhood and further afield. By addressing structural divisions between member states, the Energy Union could have a marked beneficial effect on the EU’s capacity to conduct a unified and effective foreign policy.
• Development of the Energy Union presents abundant challenges, however. Policy and legislative changes will need to be coordinated across 28 countries. Variations in EU member states’ attitudes to security and energy policy may lead to differences in, or clashes between, priorities. The wider context is also complicated. Interrelated challenges rooted in broader policy issues include the partial transition to low-carbon energy, and concerns over competitiveness relative to other major economies.
• The current EU approach to energy security and infrastructure focuses on natural gas. This ‘gas first’ approach risks crowding out other responses to the energy security challenge. It could result in the creation of ‘stranded assets’, if the future gas demand on which investments are predicated does not match projections. A narrow focus on new gas infrastructure could also impede development of other dimensions of the Energy Union.
• The markets for coal, oil, gas and renewables are changing significantly. The shale oil and gas ‘revolution’ in the United States has altered the economics of hydrocarbon fuels, and the plunge in oil prices since mid-2014 is causing energy businesses in the EU to reassess investment plans.
• The EU is rapidly expanding the use of renewable energy. Dramatically falling prices for renewables will challenge traditional energy utility business models. How the Energy Union enables market access for new business models will be key to determining future energy trajectories.

As the United Kingdom prepares to go to the polls on 12 December 2019, this event, organized in conjunction with the BBC's show, The World Tonight, will give a Chatham House audience the opportunity to put their foreign policy questions to a panel of senior UK politicians.
 
Important Information About the Event
This event is hosted in collaboration with the BBC. It will be recorded and broadcast on BBC Radio 4 – The World Tonight. Given the BBC’s commitment to due impartiality during the election period, questions will be asked to be pre-submitted via email by audience members the day before the event. The BBC will then select a balanced and diverse range of questions from those submitted. The panellists will not receive the questions in advance of the event.
 
About the Ballot
Due to the expected popularity of this event, this event will be balloted. Please register your interest for the event by 11:59pm on Monday 25 November. Successful registrants – selected at random – will be notified on Tuesday 26 November and then invited to submit their questions. The BBC will contact directly those audience members whose questions they select.
 
As priority will be given to members, we are unable to register members’ guests for this event.

On the eve of the UK general election, a group of senior Chatham House experts analyse a range of key foreign policy issues that will hinge on the election’s outcome.

There are two well-established ideas in trade. Individually, they are correct. Combined, they can lead to a conclusion that is unfortunately wrong.

The first idea is that, across a range of economic sectors, the EU and the US have been engaged in a battle to have their model of regulation accepted as the global one, and that the EU is generally winning.

The second is that governments can use their regulatory power to extend strategic and foreign policy influence.

The conclusion would seem to be that the EU, which has for decades tried to develop a foreign policy, should be able to use its superpower status in regulation and trade to project its interests and its values abroad.

That’s the theory. It’s a proposition much welcomed by EU policymakers, who know they are highly unlikely any time soon to acquire any of the tools usually required to run an effective foreign policy.

The EU doesn’t have an army it can send into a shooting war, enough military or political aid to prop up or dispense of governments abroad, or a centralized intelligence service. Commission President Ursula von der Leyen has declared her outfit to be a ‘geopolitical commission’, and is casting about for any means of making that real.

Through the ‘Brussels effect’ whereby European rules and standards are exported via both companies and governments, the EU has indeed won many regulatory battles with the US.

Its cars, chemicals and product safety regulations are more widely adopted round the world than their American counterparts. In the absence of any coherent US offering, bar some varied state-level systems, the General Data Protection Regulation (GDPR) is the closest thing the world has to a single model for data privacy, and variants of it are being adopted by dozens of countries.

The problem is this. Those parts of global economic governance where the US is dominant – particularly the dollar payments system – are highly conducive to projecting US power abroad. The extraterritorial reach of secondary sanctions, plus the widespread reliance of banks and companies worldwide on dollar funding – and hence the American financial system – means that the US can precisely target its influence.

The EU can enforce trade sanctions, but not in such a powerful and discriminatory way, and it will always be outgunned by the US. Donald Trump could in effect force European companies to join in his sanctions on Iran when he pulled out of the nuclear deal, despite EU legislation designed to prevent their businesses being bullied. He can go after the chief financial officer of Huawei for allegedly breaching those sanctions.

By contrast, the widespread adoption of GDPR or data protection regimes inspired by it may give the EU a warm glow of satisfaction, but it cannot be turned into a geopolitical tool in the same way.

Nor, necessarily, does it particularly benefit the EU economy. Europe’s undersized tech sector seems unlikely to unduly benefit from the fact that data protection rules were written in the EU. Indeed, one common criticism of the regulations is that they entrench the power of incumbent tech giants like Google.

There is a similar pattern at work in the adoption of new technologies such as artificial intelligence and the Internet of Things. In that field, the EU and its member states are also facing determined competition from China, which has been pushing its technologies and standards through forums such as the International Telecommunication Union.

The EU has been attempting to write international rules for the use of AI which it hopes to be widely adopted. But again, these are a constraint on the use of new technologies largely developed by others, not the control of innovation.

By contrast, China has created a vast domestic market in technologies like facial recognition and unleashed its own companies on it. The resulting surveillance kit can then be marketed to emerging market governments as part of China’s enduring foreign policy campaign to build up supporters in the developing world.

If it genuinely wants to turn its economic power into geopolitical influence – and it’s not entirely clear what it would do with it if it did – the EU needs to recognize that not all forms of regulatory and trading dominance are the same.

Providing public goods to the world economy is all very well. But unless they are so particular in nature that they project uniquely European values and interests, that makes the EU a supplier of useful plumbing but not a global architect of power.

On the other hand, it could content itself with its position for the moment. It could recognize that not until enough hard power – guns, intelligence, money – is transferred from the member states to the centre, or until the member states start acting collectively, will the EU genuinely become a geopolitical force. Speaking loudly and carrying a stick of foam rubber is rarely a way to gain credibility in international relations.

This article is part of a series of publications and roundtable discussions in the Chatham House Global Trade Policy Forum.

Labour leadership candidate, Lisa Nandy, reflects on the party's foreign policy priorities and makes the case for a foreign policy underpinned by internationalism.

In recent years, the Labour party has struggled to reach cross-party consensus on its foreign policy agenda. While the current leadership election offers the party an opportunity to debate and redefine its position on issues such as immigration, security and Brexit, the extent to which Labour can reconcile its factionalism remains unclear. As Labour undergoes a process of reflection, what kind of foreign policy agenda should the party rally behind that will also appeal to voters outside of its traditional base?

Can the Labour party be unified on its approach to international issues? Is an internationalist foreign policy an attractive choice for voters? And as Brexit tensions persist, what might the party's framework be to ensure new trade deals and partnerships align with fundamental Labour priorities such as workers' rights?