The upcoming UK general election is arguably a 'Brexit election', and as such, whoever wins the election will have little time to get their strategy for Brexit up and running to meet the new Brexit deadline of 31 January 2020. But what are the political parties’ policies for the UK's future trade? This event will present and discuss what the five main parties’ manifestos imply for future UK trade. Each manifesto will be presented and analysed by a fellow of the UK Trade Policy Observatory (UKTPO) and will be followed by a Q&A session. 

The view from the Gulf

Neil Quilliam

There has been no coordinated response among states of the GCC, but the messages have been universal, and surprisingly each one has welcomed US efforts to restart peace talks and praised this particular US administration for doing so. But in each case, the same set of issues and concerns has been highlighted, namely the status of Jerusalem, the situation of refugees and ultimately a simple absence of a revival contiguous Palestinian state.

While much has been made of younger Gulf generation’s apparent disconnect from the emotive issues around Palestinian statehood, the state of Jerusalem and the larger refugee issue, older leaders in the Gulf continue to pay them heed. And despite a desire to coordinate with Israel on matters of security, intelligence sharing and tech, they will not advance the relationship under the terms of the so-called ‘deal of the century’.

Put simply, the deal forces Palestinians to concede ground on all matters of importance. And should the Arab Gulf states sign up to it, they will be judged harshly by history for not only selling out Palestine for $50 billion, but also footing the bill. As such, they all feel compelled to hedge and pay salutary lip-service to US efforts but know quietly they will die on the vine and that the Arab Peace Initiative is the only viable framework for advancing talks.

Even younger leaders know that the greater risk will come from signing up to the deal rather than twitter wrath of the US president.

Kuwaiti Parliament Speaker Marzouq Al-Ghanim threw a copy in the bin, emphasizing that it ‘was born dead’ and ‘should be thrown in the dustbin of history’.

While the Saudi official position towards the deal was one of qualified support, the Saudi press reported that King Salman had spoken with Palestinian Authority President Mahmoud Abbas, who has rejected the plan, to ‘stress to him the Kingdom's steadfast position vis-à-vis the Palestinian cause and the rights of the Palestinian people’. The king reportedly added: ‘The Kingdom stands alongside the Palestinian people and supports its choices and what[ever] will actualize its hopes and aspirations.’

Turki Al-Faisal, the former Saudi intelligence chief, described the deal’s idea of a Palestinian state as ‘a brutal conception’ and the deal itself as a ‘modern-day Frankenstein’. ‘For Palestine, it is definitely a step back,’ Al-Faisal said. ‘[The Trump administration has] given up the legitimate history and weight of the United Nations Security Council resolutions and adopted a unilateral path.’

The view from Europe

Reni Zhelyazkova

The initial EU response to President Trump’s ‘Peace to Prosperity’ plan was one of caution. An official statement soon after the announcement declared that the proposal needs to be studied and assessed but only a few days later the EU’s High Representative for Foreign Affairs, Josep Borrell, condemned the plan for being out of line with internationally agreed parameters.

Some member states like Luxembourg have expressed support for the foreign policy chief’s position. Ireland, historically a strong supporter of the Palestinian cause, and Sweden, the only country to recognize the Palestinian state after becoming an EU member, have responded negatively to the US proposal, expressing concern over mentions of Israeli annexation of Palestinian land and stating that it falls short from previous international agreements.

Other EU countries, however, have been much more guarded in their reactions. Responses from Germany and France have so far been lukewarm – on the one hand, welcoming US attempts at re-igniting peace talks between Israelis and Palestinians, and, on the other, warning that any future negotiations and agreements must be carried out in accordance with internationally established parameters and legal frameworks.

A strong voice of support for Trump’s proposal was that of Hungary, whose minister of foreign affairs and trade, Péter Szijjártó, commended White House adviser Jared Kushner on the plan during a meeting in Washington last week. Other EU countries are yet to respond publicly to the proposal but unity among all EU countries is far from certain.

The EU’s official position is that a two-state solution based on pre-1967 borders and in line with previous agreements and UN resolutions is the only viable option for lasting peace between Israelis and Palestinians.

However, Israeli foreign policy under Netanyahu has focused on strengthening bilateral relations with countries in eastern and central Europe. Cooperation with Romania, Bulgaria, Greece, Croatia, Cyprus, Czech Republic, Estonia, Latvia, Lithuania and most recently Slovakia and Hungary has improved in all areas – from security and trade to tourism and cultural exchanges.

Five of these countries, namely, the Czech Republic, Slovakia, Hungary, Romania and Bulgaria recognized the State of Palestine prior to joining the EU, but the rise of populist nationalism, concerns over migration and terrorism, and improving relations with the Trump administration in the US have contributed to an alignment in views between Israel and the right-leaning governments in southern and eastern Europe, as well as those in Italy and Austria.

Improved bilateral relations have translated into political acts of good will towards Israel with a number of EU countries expressing support for Israel in the United Nations and other international forums. Austria, Romania, Hungary and the Czech Republic defied official EU position and attended the US embassy opening in Jerusalem in May 2018.

In this sense, Israel’s strategy in eastern and central Europe can be seen as a deliberate effort to break up consensus within the EU, and, ideally, reverse the bloc’s position towards the Middle East conflict, but also towards Iran. 

At a time when the EU is managing Brexit, a complex internal agenda, including arguments over the EU budget, and with its relationship with the US strained over Iran, trade and other issues, it is unlikely that the bloc will contribute significant efforts to the Middle East Peace Process. It is even more difficult to see the EU coming up with its own proposal and even less likely that all member states will be able to agree on such an initiative given internal divisions. 

Under the EU Neighbourhood Policy, the European Joint Strategy in Support of Palestine for the period 2017-20 has focused on supporting the Palestinian Authority (PA) with institutional reform, economic development and service delivery. Progress, however, has been limited as the success of programming is dependent on Israeli policy towards the West Bank and Gaza. This has hardened under Netanyahu, who enjoys the full support of the current US administration and sees the EU as biased towards the Palestinians. 

Any plan that replaces the 2017-20 joint strategy will most likely be a continuation of the current approach which focuses on conflict management and supporting the already crumbling two-state solution by keeping the PA alive. 

Some room for cautious hope remains, as much depends on the outcome of the Israeli election on 2 March and the US presidential election in November. Changes in leadership could open up space for EU to actively support the reinvigoration of peace talks and regain its relevance as a mediator in the Middle East Peace Process.

As Lebanon strains to contain COVID-19, it is not clear which governmental public health policies apply to refugees. The government announced free testing for coronavirus in the public Rafiq Hariri University Hospital in Beirut but has not mentioned if refugees are eligible.

Lebanon’s coronavirus containment strategy is based on self-reporting and, given incidents of forced deportation and harassment of Syrian refugees from both the authorities and local communities, it is certainly less likely refugees would present themselves to the health authorities for fear of deportation.

Despite agreeing a Lebanon Crisis Response Plan with the UN for refugees, different ministries were left to implement it without coordination, just as Lebanese politicians from all sides started trying to rally popular support for ridding Lebanon from refugees - in particular from Syria, who Lebanese leaders say are causing a strain on the country’s already weak infrastructure.

This finger pointing is coupled with the leaders’ own complete disregard for the rampant corruption and lack of accountability within Lebanon’s political class, which contribute to the weakening of the country’s infrastructure.

For refugees who do find themselves back in Syria, there are different challenges according to which area they are in. In the north-east, the WHO and international NGOs (INGOs) negotiate with both Kurdish authorities as well as the government - each presenting its own hurdles.

Kurdish authorities in northeast Syria have closed the Semalka border with Iraqi Kurdistan, posing a serious dilemma for INGOs offering services in north-east Syria but concerned about their staff safety whose movement is now curtailed.

The government of Syria has stipulated all emergency response must go through its ministries. But this limits what the WHO can do in the country and gives Syrian authorities the ability to block ‘cross-line aid’ which goes from government-controlled to non-government areas.

Despite reports that doctors raised the alarm about suspected cases well before patient zero was confirmed, the government appears to be either covering up the actual extent of the spread of COVID-19 or failing to respond. Some limited testing kits have arrived but testing has barely started.

The WHO’s Syria plan is divided into three regions (north-west, north-east, and areas under government control). But concerns remain as to how workable such a decentralized plan is because of the government’s practices. In January, the UN Security Council did not renew the cross-border response resolution for the Yaroubiye border crossing between Syria and Iraq that the WHO was using to send medical supplies into north-east Syria.

Syrian authorities do not permit recently authorized ‘cross-line’ responders to engage with non-government authorities in areas outside regime control. This essentially voids the authorization to work cross-line as it is practically impossible to implement programs. The WHO has sought approval from the Syrian Ministry of Foreign Affairs to move medical supplies by land to north-east Syria.

While promising facilitation, the Ministry’s reply comes with conditions of seeking detailed approval for every shipment. When Eastern Ghouta was under siege, similar conditions led to certain supplies being removed from UN/ICRC convoys to Eastern Ghouta, and there is no guarantee this will not happen again.

Due to lack of capacity in north-east Syria, coronavirus tests conducted by the WHO there must be processed through the Central Public Health Laboratory in Damascus. Samples are transported twice a week from Qamishli to Damascus but no results were ever received from Damascus for those tests.

While the WHO is able to coordinate access to north-west Syria with the Turkish authorities, the prospective coronavirus testing capacity in the Idlib region is low – despite claims that thousands of kits are arriving, a lack of resource on the ground means potentially only 20 tests per day could be done in an area inhabited by an estimated three million people.

Following the recently announced ceasefire in the area, many internally displaced people are returning from the Turkish border to their homes in the north-west, but such mass movement increases the risk of coronavirus spreading. People also continue to move between Syria, Iraq, Turkey and Lebanon, posing a challenge to the WHO’s COVID-19 response in the Levant, as the WHO has distinct response plans for each country in the region and it is difficult to coordinate across these plans.

Challenges face refugees even if they head towards Europe due to the potential for conflation between migration control and coronavirus outbreak control. Aurelie Ponthieu, Coordinator for Forced Migration at Médecins Sans Frontières (MSF) says there is a risk some countries could use COVID-19 to impose draconian measures towards asylum seekers.

The crisis has also put a halt to search and rescue operations in the Mediterranean because European countries are not allowing boats carrying migrants to disembark under the pretext of limiting the spread of coronavirus. And for migrants who already made it - such as in Greece - they are now being put in collective quarantines in asylum centers, often with poor medical facilities.

Ponthieu also reports that migrants being quarantined on overcrowded navy ships docked in Greek ports, making social distancing impossible. And she is concerned the Greek authorities are imposing a curfew on asylum seekers but not on the local population.

UNHCR is stressing that people’s right of asylum must not be overruled by concerns about the spread of coronavirus, while local and international NGOs across the Levant are trying to coordinate their advocacy on lifting restrictions on freedom of movement for humanitarian workers and on other policies and practices by authorities in the region which are adversely affecting refugee and other vulnerable communities.

The international community must not lose sight of the impact of the crisis on refugees and migrants. It is not enough simply to supply humanitarian and medical assistance without paying attention to the policies and practices of the different authorities who have direct control over the fate of vulnerable communities.

The author would like to thank Aurelie Ponthieu and the two INGO field workers who all agreed to be interviewed to inform this analysis piece.

The event will be livestreamed on the MENA Programme Facebook page.

Climate and environmental issues have largely been marginalized in discussions about the Middle East and North Africa region and yet are critical to peace and security. In this webinar, experts will explore mounting pressures including those related to water (reduced, less reliable and more polluted sources), extreme temperatures, air pollution, land degradation and sea-level rise. Panelists will discuss the potential impact of worsening environmental conditions and what the region's governments can do to protect the health and livelihoods of their peoples.

This webinar is part of the Chatham House MENA Programme's Online Event Series and will be held on the record.

Iraq is a country already in turmoil, suffering fallout from the major military escalation between the US and Iran, mass protests calling for an end to the post-2003 political system, and a violent government crackdown killing more than 600 and wounding almost 30,000 - all presided over by a fragmented political elite unable to agree upon a new prime minister following Adil abd al-Mehdi’s resignation back in November.

COVID-19 introduces yet another threat to the fragile political order, as the virus exposes Iraq’s ineffective public health system dismantled through decades of conflict, corruption and poor governance.

Iraqi doctors are making every effort to prepare for the worst-case scenario, but they do so with huge structural challenges. The Ministry of Health lacks enough ICU beds, human resources, ventilators, and personal protective equipment (PPE). Bogged down in bureaucracy, the ministry is struggling to process procurements of equipment and medications, and some doctors have made purchases themselves.

But individual efforts can only go so far as many Iraqi doctors are concerned the official numbers of confirmed COVID-19 cases do not reflect the complexity of the situation on the ground.

The ministry relies predominately upon patients self-presenting at designated public hospitals and has only just begun community-based testing in areas of suspected clusters. Reliance on self-presentation requires a level of trust between citizens and state institutions, which is at a historic low. This gap in trust – 17 years in the making – puts Iraq’s COVID-19 response particularly at risk.

Iraq’s myriad vulnerabilities

Certain social and political factors leave Iraq uniquely exposed to the coronavirus. The country’s vulnerability is tied directly to its social, religious and economic interconnections with Iran, an epicenter of the pandemic.

Exchanges between Iran and Iraq are concentrated in two regions, with strong cross-border links between Iraqi and Iranian Kurds in the north-east, and Iraqi and Iranian Shia pilgrims in the south. Cross-border circulation of religious pilgrims is particularly concerning, as they can result in mass ritual gatherings.

The high number of confirmed cases in the southern and northern peripheries of the country puts a spotlight on Iraq's failure in managing healthcare. The post-2003 government has failed to either rebuild a robust centralized healthcare system, or to pave the way for a federalized model.

Caught in an ambiguous middle between a centralized and federalized model, coordination across provinces and hospitals during the coronavirus crisis has neither reflected strong management from Baghdad nor robust ownership at the governorate level.

This problem is part of a wider challenge of managing centre-periphery relations and federalism, which since 2003 has not worked effectively. Baghdad has provided all 18 provinces with instructions on testing and treatment, but only a handful have enough resources to put them into practice. Advanced testing capacity is limited to the five provinces with WHO-approved centers, with the remaining 13 sending swabs to Baghdad.

But the greatest challenge to Iraq’s COVID-19 response is the dramatic deterioration of state-society relations. Studies reveal a profound societal distrust of Iraq’s public healthcare institutions, due to corruption and militarization of medical institutions. Numerous videos have recently circulated of families refusing to turn over sick members - particularly women - to medical teams visiting households with confirmed or suspected cases.

As medical anthropologist Omar Dewachi notes, the ‘moral economy of quarantine’ in Iraq is heavily shaped by a history of war and its impact on the relationship between people and the state. Although local and international media often interpret this reluctance to undergo quarantine as a matter of social or tribal norms, distrusting the state leads many families to refuse quarantine because they believe it resembles a form of arrest.

The management of coronavirus relies upon an overt convergence between medical institutions and security forces as the federal police collaborate with the Ministry of Health to impose curfews and enforce quarantine. This means that, troublingly, the same security establishment which violently cracked down on protesters and civil society activists is now the teeth behind Iraq’s COVID-19 response.

Without trust between society and the political class, civil society organizations and protest movements have directed their organizational structure towards awareness-raising across Iraq. Key religious authorities such as Grand Ayatollah Sistani have called for compliance to the curfew and mobilized charitable institutions.

However, such efforts will not be enough to make up for the lack of governance at the level of the state. In the short-term, Iraq’s medical professionals and institutions are in dire need of technical and financial support. In the long-term, COVID-19 is a lesson that Iraq’s once robust public healthcare system needs serious investment and reform.

COVID-19 may prove to be another catalyst challenging the ‘muddle through’ logic of the Iraqi political elite. International actors have largely been complicit in this logic, directing aid and technical support towards security forces and political allies in the interest of short-term stability, and neglecting institutions which Iraqis rely on for health, education, and well-being.

The response to the crisis requires cooperation and buy-in of a population neglected by 17 years of failed governance. This is a seminal event that may push the country to the brink, exposing and stirring underlying tensions in state-society relations.

This analysis was produced as part of the Iraq Initiative.

Neither Cameroon nor Malaysia has made progress in tackling illegal logging since 2010, according to new reports from Chatham House. Corruption, lack of political will and a lack of transparency pose problems in both countries. 

Illegal logging is much more widespread in Cameroon, where entrenched corruption, weak institutions and unclear and inappropriate laws are all impeding reform. Although Malaysia does not have such high levels of illegality, problems remain, particularly in the state of Sarawak.

Alison Hoare, Senior Research Fellow at Chatham House, said: 'Illegal logging has a devastating impact on some of the world’s most valuable remaining forests and on the people who live in them and rely on the resources they provide.'

'It is disappointing how little progress Cameroon and Malaysia have made in tackling illegal logging, which exacerbates deforestation, climate change, and poverty. In both countries corruption is a major issue, and the governments need to do much more to address the problem and its underlying drivers.' 

In Cameroon, the principle of transparency has not been accepted within the government, enforcement is weak and information management systems are inadequate. The misuse of  small permits, often granted to allow clearance of forests for infrastructure projects or agricultural expansion, is particularly problematic and could be increasing.

Meanwhile, a huge amount of illegal production takes place in the informal artisanal sector – accounting for around half of all timber produced in the country. Artisanal loggers mainly supply the domestic market, but their timber is also exported.

In Malaysia, governance varies significantly from region to region but there are high levels of deforestation across the country. Expansion of timber, pulp and agricultural plantations is the primary cause of forest loss, with the area of plantations expected to double by 2020. 

Adequate recognition of indigenous peoples’ land rights is also a serious challenge in Malaysia and has held up the negotiation of a Voluntary Partnership Agreement with the European Union. Recent enhanced efforts to tackle corruption, including in Sarawak, could mark a turning point. 

Alison Hoare: 'In both countries, more concerted efforts are needed to tackle corruption, increase consultation, and improve transparency and availability of information. The Cameroonian government also needs to pay more attention to the informal sector and the domestic market.'

In the week before governments assemble in Paris to agree a global climate deal, a new report from Chatham House shows that a worldwide shift to healthier diets could help close the gap between current emissions reduction plans and what is needed to prevent dangerous climate change.

Pledges from countries attending the 21st UNFCCC Conference of the Parties put the world on track for around 3 degrees of warming by 2100, leaving governments with much more still to do. Changing diets to healthy levels of meat consumption could generate a quarter of the remaining emission reductions needed to keep warming below the ‘danger level’ of 2 degrees Celsius – the main goal of the climate negotiations.

Changing Climate, Changing Diets: Pathways to Lower Meat Consumption by Laura Wellesley, Catherine Happer and Antony Froggatt argues that, ultimately, dietary change is fundamental to achieving the 2 degrees goal. The livestock sector is already responsible for 15 per cent of global greenhouse gas emissions. Unless strong demand growth for meat is curtailed, livestock sector emissions will increase to the point where dangerous climate change is unavoidable.

Dietary change would also have major health benefits. Global per capita meat consumption is already above healthy levels, and double the recommended amount in industrialized countries. Too much red and processed meat is associated with an increased risk of non-communicable diseases, in particular cancer, as found most recently by the World Health Organization.

'Reducing meat consumption is a real win-win for health and for the climate,' says report author Laura Wellesley. 'As governments look for strategies to close the Paris emissions gap quickly and cheaply, dietary change should be high on the list.'

However, the report finds that governments are ignoring the opportunity. Reducing meat consumption does not feature in a single national emissions reduction plan submitted in advance of the Paris meeting. Governments are afraid to interfere in lifestyle choices for fear of public backlash.

But new research undertaken for the report, including an innovative public survey in 12 countries and focus groups in Brazil, China, the United Kingdom, and the United States shows that government fears are exaggerated. Once aware of the link between meat and climate change, consumers accept the need for government action. Even unpopular interventions to make meat more expensive, for example through a carbon tax, would face diminishing resistance as publics come to understand the rationale behind intervention.

To build support for government action, the report recommends initiatives to raise public awareness of the climate and health impacts of excessive meat consumption. Governments should pursue comprehensive strategies to shift diets, including policies on labelling, public procurement, regulation and pricing.

'Raising awareness about the health and environmental impacts of meat is an important first step, but on its own it will not lead to significant behaviour change. Governments must do more to influence diets,' added Wellesley.

In recognition of Chatham House’s continued dedication to workplace diversity, the institute has been listed in the Inclusive Top 50 UK Employers List – a definitive ranking of UK-based organizations that promote inclusion across all protected characteristics, throughout each level of employment within an organization.

Powered by the Excellence in Diversity Awards, the Inclusive Top 50 UK Employers recognizes the organizations that demonstrate the promotion of all strands of diversity including age, disability, gender, LGBT, race, faith and religion.

Complied by a dedicated panel of judges, the list has been collated based on each organization’s performance in a range of areas within the diversity arena. Organizations featured have provided sufficient evidence on an amalgam of topics including recruitment procedures, training and a host of diversity related initiatives.

The Inclusive Top 50 UK Employers List, in partnership with recruitment specialists Rullion, recognizes the outstanding efforts of organizations that have begun their journey to attracting and retaining a truly diverse workforce, achieving equality, diversity and inclusion in its purest form.

Lisa O’Daly, Director of Human Resources, Chatham House, said: ‘I am delighted that Chatham House has been included in the Inclusive Top 50 UK Employers List. This is just really the beginning of our journey to diversity and inclusion and is a recognition of the collective efforts of our staff which is changing Chatham House for the better.’

‘The UK companies on the list are showing by their actions that they are integrating what they believe into how they operate creating an inclusive culture, which begins at the very top of the organization,’ said Donna Herdsman, EMEA Partnership Manager, Rullion. 

The NATO Summit, held in September 2014 in Newport, Wales, was a waypoint in the larger strategic vision for NATO over the coming decade. As the alliance continues to confront challenges on its eastern and southern frontiers, it must find ways to adapt its strategy for more effective responses, while also staying ahead of emerging threats and risks. 

The event will bring together senior representatives from a number of the NATO member states, NATO partners and external experts from industry, the media and the think-tank and academic communities, to examine what NATO member states have done thus far to move the deliverables forward, and how to most effectively work together in continuing to do so. 

Attendance at this event is by invitation only.

This is the second of two workshops held in collaboration with SWP-Berlin; the first took place at Chatham House in October 2014.

Summary

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

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

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

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

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

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

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

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

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

To comment on this article, please contact Chatham House Feedback

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

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

So what does the Trump presidency actually mean for trade?

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

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

Opportunity to rethink the trade framework

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

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

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

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

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

This piece was published in collaboration with Real Clear World.

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Summary

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

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

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

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

The leaked record of the five meetings of the UK–US Trade & Investment Working Group held in 2017–18 has led to a controversy in the UK election campaign around the claim that ‘the NHS is up for sale’.

But a careful reading of the leaked documents reveals how remarkably little concerns the NHS – in five meetings over 16 months, the NHS is mentioned just four times. The patent regime and how it affects medicines is discussed in more depth but largely in terms of the participants trying to understand each other’s systems and perspectives. For the most part, the discussions were overwhelmingly about everything else a trade deal would cover other than healthcare – matters such as subsidies, rules of origin and customs facilitation.

But this does not mean there will be no impact on Britain’s health service. There are three main concerns about the possible implications of a US–UK trade deal after Brexit – a negotiation that will of course only take place if the UK remains outside the EU customs union and single market and also does not reach a trade agreement with the EU that proves incompatible with US negotiating objectives.

One concern is that the US aim of securing ‘full market access for US products’, expressed in the US negotiating objectives, will affect the ability of NICE (The National Institute for Health and Care Excellence) to prevent the NHS from procuring products that are deemed too expensive in relation to their benefits. It could also affect the ability of the NHS to negotiate with companies to secure price reductions as, for instance, happened recently with Orkambi, a cystic fibrosis drug.

A peculiarity of the main US government healthcare programme (Medicare) is that it has historically not negotiated drug prices, although there are several bills now before Congress aiming to change that. US refusal to negotiate or control prices is one reason that US drug prices are the highest in the world.  

A second concern is that the US objective of securing ‘intellectual property rights that reflect a standard of protection similar to that found in US law’ will result in longer patent terms and other forms of exclusivity that will increase the prices the NHS will have to pay for drugs.

However, it is not immediately apparent that UK standards are significantly different from those in the US – the institutional arrangements differ but the levels of protection offered are broadly comparable. Recent publicity about a potential extra NHS medicine bill of £27 billion resulting from a trade deal is based on the NHS having to pay US prices on all drugs – which seems an unlikely outcome unless the UK contingent are extraordinarily bad negotiators.

Nevertheless, in an analysis section (marked for internal distribution only), the UK lead negotiator noted: ‘The impact of some patent issues raised on NHS access to generic drugs (i.e. cheaper drugs) will be a key consideration going forward.’

A third concern is that the US objective of providing ‘fair and open conditions for services trade’ and other US negotiating objectives will oblige the UK to open up the NHS to American healthcare companies.

This is where it gets complicated. At one point in a discussion on state-owned enterprises (SOEs) the US asked if the UK had concerns about their ‘health insurance system’ (presumably a reference to the NHS). The UK response was that it ‘wouldn’t want to discuss particular health care entities at this time, you’ll be aware of certain statements saying we need to protect our needs; this would be something to discuss further down the line…’

On this exchange the UK lead negotiator commented:  ‘We do not currently believe the US has a major offensive interest in this space – not through the SOE chapter at least. Our response dealt with this for now, but we will need to be able to go into more detail about the functioning of the NHS and our views on whether or not it is engaged in commercial activities…’

On the face of it, these documents provide no basis for saying the NHS would be for sale – whatever that means exactly. The talks were simply an exploratory investigation between officials on both sides in advance of possible negotiations.

But it is a fact that US positions in free trade agreements are heavily influenced by corporate interests. Their participation in framing agreements is institutionalized in the US system and the pharmaceutical and healthcare industries in the US spend, by a large margin, more on lobbying the government than any other sector does. Moreover, President Donald Trump has long complained about ‘the global freeloading that forces American consumers to subsidize lower prices in foreign countries through higher prices in our country’.

It is when (and if) the actual negotiations on a trade deal get under way that the real test will come as the political profile and temperature is raised on both sides of the Atlantic.