Earlier this month, Sheikh Tamim – the emir of Qatar – hailed the country’s success in overcoming the impacts of the embargo levied by the so-called Arab Quartet – Bahrain, Egypt, Saudi Arabia and the United Arab Emirates (UAE). Qatar will post a budget surplus for the first time in three years, and the country’s long-term plan for economic diversification has taken great strides, according to the emir. Key among the achievements cited was the advancement of Qatar’s domestic food industry.

When the blockade was introduced in June 2017, it threw the vulnerability of Qatar’s domestic food supply to outside interruption into sharp relief. Qatar is poorly suited to growing food. The desert country ranks as the most water-stressed in the world. As one of the hottest, most arid countries in the world, trade is critical to feeding the nation; over 90 per cent of its food supply is imported.

Most of Qatar’s cereal imports – including 80 per cent of its wheat supply – arrive by sea from exporters including India, Russia and Australia. Sitting on the eastern edge of the Persian Gulf, Qatar’s only maritime gateway to the world is the Strait of Hormuz. This narrow body of water can, as events this summer have shown, be disrupted by geopolitical events. But for 40 per cent of overall food imports, overland trade from Saudi Arabia was Qatar’s primary supply channel before June 2017 – particularly so for dairy products and fresh fruit and vegetables coming from the EU, Turkey and Jordan.

The abrupt closure of Saudi Arabia’s borders prompted significant private investment in Qatar’s own food industry; domestic production has reportedly increased four-fold since the blockade was introduced. Prior to the blockade, Qatar imported 85 per cent of its vegetables; it now hopes to produce 60 per cent within the next three years. Perhaps even more remarkably, the country is now self-sufficient in dairy, having previously relied on imports for 72 per cent of its supply.

This progress has come at a cost. Qatar’s booming domestic industry is highly resource-intensive. To fill the gap in the dairy sector, Baladna – the country’s principal dairy producer – imported around 18,000 Holstein dairy cows from the EU and US. The company is thriving; in June of this year, it made its first dairy exports.

But the desert is not a natural environment for these cows; they must be kept indoors, at temperatures around 15°C cooler than the outside air, and misted with water to prevent overheating. The cooling systems are a huge drain on local resources. Each dairy cow requires an average of 185 gallons of water a day, almost twice the volume used by the average Qatari household. The majority of this water comes from oil- or gas-powered desalination plants; the cooling systems themselves run on gas-fired electricity.

Qatar has traditionally invested in production overseas – particularly in Sudan and Tanzania – to secure its fodder supply, but the government has plans to become self-sufficient in fodder crops such as lucerne (alfalfa) and Rhodes grass. This will require irrigation on a vast scale. Qatar’s farmland is mostly located in the north of the country where it benefits from aquifers; fodder production already accounts for half of the groundwater extracted for use in agriculture.

Despite commitments made under the National Food Security Programme to improving the water efficiency of Qatar’s food production, the rate of draw-down of these aquifers exceeds their recharge rates. Overexploitation has resulted in saline intrusion, threatening their long-term viability. With 92 per cent of all extracted groundwater given to farmers free of charge, there is little incentive for economizing on its use.

Increasing production will also likely mean increasing fertilizer use; rates of fertilizer use in Qatar are among the highest in the world, second only to those in Singapore.

Both government and industry are taking small steps to ‘green’ the country’s food production. Certain local authorities plan to ban the use of groundwater for fodder production by 2025, requiring producers to use treated sewage water instead and reserving the use of groundwater for crop production.

A number of companies are also adopting so-called ‘circular’ practices to achieve more efficienct resource use; Agrico, a major vegetable producer, has expanded its organic hydroponics operations, a move the company reports has led to a 90 per cent reduction in water use. But, with a target to produce up to 50 per cent of Qatar’s fresh food supply domestically within just a few years, scattered examples of resource-saving strategies will not be enough to mitigate the rise in water demand.

As Qatar looks to continue growing its food industry in the wake of the blockade, it is from Saudi Arabia – ironic though it may be – that Qatar stands to learn important lessons.

Saudi Arabia’s scaling up of domestic wheat production – initially to achieve self-sufficiency and then to support a prosperous export industry – was ultimately a failed effort. The unsustainable extraction of groundwater – fuelled by generous subsidies for wheat producers and the nominal cost of diesel for pumping – brought the country’s water table to the brink of collapse, and the government was forced to make a dramatic U-turn, reducing then removing the subsidies and shrinking its wheat sector.

The UAE also provides an instructive example for how domestic food production may be supported – this time positive. This summer, the Department of Environment in Abu Dhabi announced its Recycled Water Policy, laying out a policy framework to promote and facilitate reused water across all major sectors, including agriculture.

Back in 2014, the Ministry of Climate Change and Environment set hydroponics as a key priority, launching a 100 million Emirati dirham fund to incentivize and support farmers establishing hydroponic farms. And the International Center for Biosaline Agriculture, based in Dubai and supported by the UAE government, undertakes pioneering research into sustainable food production in saline environments.

On the face of it, Qatar has indeed bounced back from the blockade. As and when cross-border trade is re-established with Saudi Arabia, Qatar will boast a more diverse – and more resilient – network of trade relationships than it did prior to June 2017.

In addition to investment in domestic food production, the blockade also provoked a rapid recalibration of Qatar’s trade relationships. Allies in the region – most notably Turkey and Iran – were quick to come to Qatar’s assistance, delivering fresh produce by air. Since then, Qatar has scaled up its trading relationship with both countries.

It has also leveraged its position as the world’s largest exporter of liquid natural gas to establish new maritime trade lines with major food exporters, including India. Should tensions spike again in the future, it will be in a stronger position to weather the storm.

But, in the absence of a commitment to support the widespread adoption of circular agricultural technologies and practices, Qatar’s commitment to increasing its self-sufficiency and expanding its domestic production could ultimately undermine its long-term food security.

Rising average temperatures and increasingly frequent extreme weather events – like the heatwave in 2010 when temperatures soared to over 50°C – will exacerbate already high resource stress in the country. Unsustainable exploitation of finite land, water and energy reserves will limit the country’s long-term capacity to produce food and weaken its ability to withstand future disruptions to regional and international supply channels.

As Qatar continues in its efforts to secure a reliable food supply, it would do well to heed the experience of its neighbours, be they friend or foe.

International trade rules and policies are deeply relevant to environmental performance. On the one hand, trade flows, rules and policies can exacerbate environmental challenges as consumers regularly purchase goods produced or disposed of in unsustainable ways in other countries therefore 'exporting' environmental costs. On the other hand, trade rules and flows can be harnessed to support environmental agendas and impact commercial and trade prospects positively.

The speakers will discuss the urgent need for greater political leadership and inclusive policy dialogue on environment and trade to address its development and competitiveness. Which priorities should form the heart of a forward-looking environment and trade 2.0 agenda in the context of the UN’s SDGs? What role can international trade play in helping deliver sustainable food and land use systems? And how can stakeholders promote the scaling-up of the many initiatives underway and serve as a vehicle for transformative change toward a more sustainable economy at the national and international level?

This event is only open to Major Corporate Member and Partner organizations of Chatham House. If you'd like to attend, please RSVP to Linda Bedford.

To enable as open a debate as possible, this event will be held under the Chatham House Rule.

COVID-19 is a sharp reminder of why trade and climate policy matters. How can governments maintain access to critical goods and services, and ensure global supply chains function in times of crisis?

The timing of many trade negotiations is now increasingly uncertain, as are the UK’s plans to host COP26 in November. Policy work continues, however, and the EU has released its draft negotiating text for the new UK-EU trade deal, which includes a sub-chapter specifically devoted to climate. 

This is a timely reminder both of the pressing need for the UK to integrate its trade and climate policymaking and to use the current crisis-induced breathing space in international negotiations - however limited - to catch up on both strategy and priorities on this critical policy intersection.

The UK government has moved fast to reset its external trade relations post-Brexit. In the past month it formally launched bilateral negotiations with the EU and took up a seat at the World Trade Organization (WTO) as an independent member. Until the COVID-19 crisis hit, negotiations were also poised to start with the US.

The UK is also in the climate spotlight as host of COP26, the most important international climate negotiation since Paris in 2015, which presents a vital opportunity for the government to show leadership by aligning its trade agenda with its climate and sustainability commitments in bold new ways.

Not just an empty aspiration

This would send a signal that ‘Global Britain’ is not just an empty aspiration, but a concrete commitment to lead.

Not only is concerted action on the climate crisis a central priority for UK citizens, a growing and increasingly vocal group of UK businesses committed to decarbonization are calling on the government to secure a more transparent and predictable international market place that supports climate action by business.

With COP26, the UK has a unique responsibility to push governments to ratchet up ambition in the national contributions to climate action – and to promote coherence between climate ambition and wider economic policymaking, including on trade. If Britain really wants to lead, here are some concrete actions it should take.

At the national level, the UK can pioneer new ways to put environmental sustainability – and climate action in particular - at the heart of its trade agenda. Achieving the government’s ambitious Clean Growth Strategy - which seeks to make the UK the global leader in a range of industries including electric cars and offshore wind – should be a central objective of UK trade policy.

The UK should re-orient trade policy frameworks to incentivize the shift toward a more circular and net zero global economy. And all elements of UK trade policy could be assessed against environmental objectives - for example, their contribution to phasing out fossil fuels, helping to reverse overexploitation of natural resources, and support for sustainable agriculture and biodiversity.

In its bilateral and regional trade negotiations, the UK can and should advance its environment, climate and trade goals in tandem, and implementation of the Paris Agreement must be a core objective of the UK trade strategy.

A core issue for the UK is how to ensure that efforts to decarbonise the economy are not undercut by imports from high-carbon producers. Here, a ‘border carbon adjustment (BCA)’ - effectively a tax on the climate pollution of imports - would support UK climate goals. The EU draft negotiating text released yesterday put the issue of BCAs front and centre, making crystal clear that the intersection of climate, environment and trade policy goals will be a central issue for UK-EU trade negotiations.

Even with the United States, a trade deal can and should still be seized as a way to incentivize the shift toward a net zero and more circular economy. At the multilateral level, as a new independent WTO member, the UK has an opportunity to help build a forward-looking climate and trade agenda.

The UK could help foster dialogue, research and action on a cluster of ‘climate and trade’ issues that warrant more focused attention at the WTO. These include the design of carbon pricing policies at the border that are transparent, fair and support a just transition; proposals for a climate waiver for WTO rules; and identification of ways multilateral trade cooperation could promote a zero carbon and more circular global economy.  

To help nudge multilateral discussion along, the UK could also ask to join a critical ‘path finder’ effort by six governments, led by New Zealand, to pursue an agreement on climate change, trade and sustainability (ACCTS). This group aims to find ways forward on three central trade and climate issues: removing fossil fuel subsidies, climate-related labelling, and promoting trade in climate-friendly goods and services.

At present, the complex challenges at the intersection of climate, trade and development policy are too often used to defer or side-step issues deemed ‘too hard’ or ‘too sensitive’ to tackle. The UK could help here by working to ensure multilateral climate and trade initiatives share adjustment burdens, recognise the historical responsibility of developed countries, and do not unfairly disadvantage developing countries - especially the least developed.

Many developing countries are keen to promote climate-friendly exports as part of wider export diversification strategies  and want to reap greater returns from greener global value chains. Further, small island states and least-developed countries – many of which are Commonwealth members – that are especially vulnerable to the impacts of climate change and natural disasters, need support to adapt in the face of trade shocks and to build climate-resilient, trade-related infrastructure and export sectors.

As an immediate next step, the UK should actively support the growing number of WTO members in favour of a WTO Ministerial Statement on environmental sustainability and trade. It should work with its key trading partners in the Commonwealth and beyond to ensure the agenda is inclusive, supports achievement of the UN Sustainable Development Goals (SDGs) and helps developing countries benefit from a more environmentally sustainable global economy.

As the UK prepares to host COP26, negotiates deals with the EU and US, and prepares for its first WTO Ministerial meeting as an independent member, it must show it can lead the way nationally, bilaterally, and multilaterally. And to ensure the government acts, greater engagement from the UK’s business, civil society and research sectors is critical – we need all hands on deck to forge and promote concrete proposals for aligning UK trade policy with the climate ambition our world needs.

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.

Video: Marianne Schneider-Petsinger and Dr Yu Jie discuss key themes from the research paper

Summary

• The underlying driver of the ongoing US–China trade war is a race for global technological dominance. President Trump has raised a number of issues regarding trade with China – including the US’s trade deficit with China and the naming of China as a currency manipulator. But at the heart of the ongoing tariff escalation are China’s policies and practices regarding forced technology transfer, intellectual property theft and non-market distortions.
• As China’s international influence has expanded it has always been unlikely that Beijing would continue to accept existing global standards and institutions established and widely practised by developed countries based on ‘the Washington Consensus’.
• China’s desire to be an alternative champion of technology standard-setting remains unfulfilled. Its ample innovation talent is a solid foundation in its quest for global technology supremacy but tightening controls over personal freedoms could undermine it and deter potential global partners.
• It is unclear if Chinese government interventions will achieve the technological self-sufficiency Beijing has long desired. China’s approach to macroeconomic management diverges significantly from that of the US and other real market economies, particularly in its policy towards nurturing innovation.
• Chinese actors are engaged in the globalization of technological innovation through exports and imports of high-tech goods and services; cross-border investments in technology companies and research and development (R&D) activities; cross-border R&D collaboration; and international techno-scientific research collaboration.
• While the Chinese state pushes domestic companies and research institutes to engage in the globalization of technological innovation, its interventions in the high-tech sector have caused uneasiness in the West.
• The current US response to its competition with China for technological supremacy, which leans towards decoupling, is unlikely to prove successful. The US has better chances of success if it focuses on America’s own competitiveness, works on common approaches to technology policy with like-minded partners around the globe and strengthens the international trading system.
• A technically sound screening mechanism of foreign investment can prevent normal cross-border collaboration in technological innovation from being misused by geopolitical rival superpowers.

The ‘free and open Indo-Pacific’ (FOIP) strategy, actively promoted by the United States with support from its allies and partners, is a significant geopolitical response to China's growing power and expanding influence in Asia and beyond. Beijing has adopted various new strategies to cope with the challenges related to FOIP. One of these strategies is to secure a robust relationship with south-east Asia in order to make these regional states either neutral to or less supportive of the Indo-Pacific vision. In addition to economic statecraft and soft power, Beijing believes that it can also tap into the domain of non-traditional security (NTS) to strengthen relations with this region to position itself better in the intensifying regional geopolitical competition. The article addresses the following question: what is the impact of China's NTS cooperation with south-east Asia on Beijing's geopolitical rivalry with other major powers in the Indo-Pacific region? The article argues that China's NTS cooperation with south-east Asian countries may help China maintain its geopolitical standing in the region, but it is unlikely to lead to any dramatic increase of China's strategic influence in the region. This essentially means that Beijing may be able to prevent ASEAN or most ASEAN member states from lending substantive and strong support to the Indo-Pacific construct, but it will not be able to stop ASEAN states from supporting some elements of the FOIP.

The Belt and Road Initiative (BRI) has been regarded by international society as a major policy tool in China's geo-economic strategy. Under this policy platform, Beijing has pledged to invest billions of dollars in the infrastructure and industrial sectors across Eurasia and in the Indo-Pacific nations. It is widely believed that such huge amount of investment will inevitably generate significant geostrategic repercussions in these regions. In response to the BRI, the United States and other powers have come up with a ‘free and open Indo-Pacific’ strategy. This article attempts to address the following question: what impact is the BRI likely to have on the security ties between China and the other major players in the Indo-Pacific? The author finds that the BRI may significantly transform China's international security policy and the expansion of Beijing's security influence may further intensify the security competition between China and other major powers in the Indo-Pacific region. The article also proposes a new analytical angle for the study of geo-economics that unpacks the role of economic activities and processes in generating geopolitical intentions and catalysing geopolitical competition.

Bangladesh's recent gains in economic and social indices, set against its record of corruption and poor civil rights, has at times been termed the ‘Bangladesh Paradox’. Yet this label is overly simplistic; the current situation proves that these trends can coexist.

The Awami League government, in power since 2009, has increased political stability, delivered unprecedented economic and social advances, and adopted a counter-terrorism strategy to stamp out extremist groups. At the same time, it is criticized for curbing civil rights and failing to hold credible elections. However, as the two previous regimes have demonstrated, the rights situation is unlikely to improve even if the Awami League were replaced.

How did worsening rights become a feature of the state irrespective of its political dispensation? An unresolved contest between political and non-political state actors may hold the key to that puzzle. The perils of the current dispensation have recently manifested in weakening economic indicators, which jeopardize the very stability and social progress for which the country has garnered much praise.

This virtual roundtable has been co-convened by Chatham House and the Aga Khan Foundation.  

While conducting research in fragile and conflict-affected contexts has always presented challenges, the outbreak of COVID-19 creates additional challenges including travel restrictions, ethical challenges, and disruptions to usual modes of working. This virtual roundtable will explore how organizations can adapt their research and monitoring and evaluation models in response to the coronavirus pandemic. This event aims to discuss the research methods being used to mitigate the impact of the COVID-19 crisis; the important role of technology; and ways to engage policy and decision-makers during this time.