Aurelia Butler

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Last week’s agreement for the UK to join the EU’s Horizon research programme ties up the last loose end of the arrangements governing Britain’s exit from the bloc — at least in a narrow sense. In a broader sense, “unfinished business” is the very definition of how the relationship will continue to develop. Just for starters, terms for fishing rights, electric vehicle trade, and financial sector access have to be updated in the next few years. And that’s only what’s programmed into existing agreements. With Horizon settled, attention in the British political debate keeps circling around the broader future of the EU-UK relationship. The looming question is how (and when) the striking pro-European turn in British public opinion will trigger new political choices.Contrast that with the silence in the EU and its member countries on what the next steps with the UK might be. The silence is not strategic; it is simply not a question anyone is giving any thought to — for several excellent reasons.One is that there is no point thinking about it without a fundamental change in UK politics. Perhaps a Labour government led by Sir Keir Starmer will seek a closer form of association, despite his effort to make voters believe the opposite. But until then, there is nothing for the EU to decide beyond managing the relationship, such as it is.Also, the EU has more important business to attend to. Russia’s assault on Ukraine and its energy war on Europe, relations with China, the green transition and other priorities push a difficult but mostly harmless neighbour off the list.While the bloc’s own preoccupations warrant this relative neglect, they are still going to transform what we may call the EU’s British question, in radical if unintended ways. What the EU does for reasons unrelated to the UK nonetheless has implications for the bloc’s future relations with Britain. And these are worth taking note of — not least because they may include previously excluded opportunities.The political necessity of bringing Ukraine closer to and ultimately into the EU has opened questions that were firmly shut while the UK was in the process of leaving. Remember Brexit tsar Michel Barnier’s “ladder” of available relationships? EU leaders are now seriously considering much more “progressive” — ie finely graduated — forms of association, though this thinking applies to countries headed into the EU rather than out of it.Many ask, for instance, whether Ukraine or other candidates could enjoy some benefits of membership before joining in full. I have argued before that it makes perfect sense for Ukraine to join the European Free Trade Association and through it the European Economic Area — which essentially means the single market — as a way station to EU membership. But it may take time to persuade all EU countries to digest permanent free movement for about 40mn Ukrainians. An obvious solution is to open the free movement of goods, services and capital first. That, however, means dropping the dogma that the single market’s “four freedoms” are indivisible, an idea which held such sway in the Brexit talks.Then there are the EU’s internal transformations, which are making it more integrated in both scope and degree. In scope, because much broader policy fields — within energy, defence, industrial strategy, foreign policy tools such as sanctions, and even fiscal matters — have become subject to EU-level decision-making. In degree, because of the move to make that decision-making more efficient, with a push under way to expand qualified majority voting. Consider Norway, whose EEA membership is the closest off-the-shelf model for a non-member. Internal EU developments have compelled the country to seek a number of add-on agreements to align itself with the bloc. In other words, even the 30-year-old EEA treaty, which “dynamically” injects new single market rules into Norway’s legislation, is not enough to keep up with deepening EU policy collaboration now extending far beyond the single market.Both these tendencies mean the British question will be a very different one the next time it arises. There may well be a wider “à la carte” menu of relations than were available to the UK between 2016 and 2020. But the EU will also be a more cohesive entity in more areas where members pool their sovereignty. The union may find it useful to be more creative about British association, but always on its own terms. The UK may one day finally accept the role of a rule taker to join the single market, only to find that, like in Norway’s case, that is no longer [email protected] More

Vietnam will upgrade its relationship with the US to its highest level, matching that with China and bringing the communist country and former foe closer into Washington’s orbit in the face of Beijing’s growing assertiveness in the region.The US will sign a “comprehensive strategic partnership” with the south-east Asian country, according to US officials, when President Joe Biden arrives in Hanoi on Sunday from New Delhi, where he attended the G20 summit.The symbolic but important designation of the partnership, which follows years of lobbying by Washington, would raise the US by two levels to the top status in Vietnam’s bilateral ties hierarchy. It is one reserved only for China, Russia, India and, as of last year, South Korea. Vietnam had long avoided the move for fear of upsetting Beijing. The step is “more than words”, said Jon Finer, the deputy US national security adviser who announced the strategic partnership as Biden was flying to Hanoi. “In a system like Vietnam, this is a signal to their entire government, their entire bureaucracy, about the depth of co-operation and alignment with another country.” Biden arrives in Vietnam after a G20 summit where the US and other western allies were forced to make compromises on their condemnation of Russia in the bloc’s joint statement, as part of Washington’s growing effort to find more common ground with developing nations.The US and its allies have prioritised outreach to the so-called Global South to help build a worldwide consensus against Russia’s war against Ukraine and as part of a growing international rivalry with Beijing, Moscow’s most important foreign partner.Similarly, the US views developing countries in Asia as crucial to countering China’s growing ambitions in the Indo-Pacific. Vietnam is regarded as a frontline nation facing China’s growing ambitions in the South China Sea, where Beijing has made sweeping claims of sovereignty to the alarm of many of its neighbours. Biden skipped the Association of Southeast Asian Nations and east Asia summits in Jakarta before the G20 meeting in favour of the Vietnam trip, in a bid to show the importance America places on its relationship with Hanoi. The elevation of US-Vietnam ties comes nearly half a century after the end of the Vietnam war, which was followed by years of mutual distrust. Following the victory of the Communist party in 1975, Washington placed a trade embargo on Vietnam that was maintained until 1994.The upgraded partnership is as much about Chinese mis-steps as it is about US persistence, said Peter Mumford, a south-east Asia analyst for Eurasia Group. “There’s been some strategic self-harm by China,” Mumford said, citing a step-up in intimidation of Vietnamese vessels in the South China Sea as one example. “This is an unusual and significant step for Vietnam and it is a sign of how strong Hanoi’s desire is to counterbalance ties with China.”Beijing’s pressure campaign has already pushed the Philippines closer to the US, with Manila allowing America access to four more of the country’s military bases earlier this year. Vietnam’s move is likely to trigger disquiet in Beijing. China had dispatched a top official to Hanoi earlier in the week at short notice ahead of Biden’s scheduled visit. The Chinese Communist party’s international department head Liu Jianchao met Nguyen Phu Trong, the general secretary of the Communist party of Vietnam, and both agreed to “consolidate political mutual trust” during the visit. “This is a decisive step into the US orbit,” said Simon Tay, chair of the Singapore Institute of International Affairs. However, despite angst about China, Vietnam would seek to remain neutral between the two superpowers and has been broadening its ties with other nations, not just the US, he added. Hanoi has indicated it will also boost ties with Australia, Singapore, Indonesia and Japan. As well as having security implications such as potential defence co-operation, the new US status also has economic importance. It allows both countries to work on further boosting trade and market opportunities, especially in crucial industries such as semiconductors.

Since the 1990s, Vietnam’s economy has transitioned from a centralised, controlled economy to a more open and capitalist model, and the US is its largest export market. It was the fastest growing economy in Asia last year. “This upgrade is not just about diplomacy or defence but also the trading relationship. The American business community is hopeful about seeing continued improvement in tariffs and technology and intelligence transfers in particular as a result,” said Greg Testerman, chair of the American Chamber of Commerce in Vietnam. The most recent boom in trade between Vietnam and the US has been driven by companies including Dell, Google, Microsoft and Apple expanding or setting up in the south-east Asian country to diversify their supply chains — in particular away from China.Big US technology and manufacturing companies, including semiconductor groups, are expected to attend a business meeting on Monday as Vietnam seeks more high-tech and other investment from the US. However, Vietnam’s economic performance has been more subdued in recent months and exports have fallen with a reduction in global demand. A wide-ranging anti-corruption campaign and a downturn in the property sector have also hit investor confidence. More

India’s prime minister Narendra Modi has called for the mandate of multilateral lenders such as the World Bank to be expanded, as the IMF’s managing director demanded an increase in the lender’s resources by the end of the year.Efforts to boost the balance sheets and reform the governance of the Washington-based multilateral lenders have been a central issue at the Group of 20 summit in New Delhi this weekend, partly as a means for western states to curry favour with developing nations amid geopolitical divisions over Russia’s war against Ukraine.“We need to expand the mandate of multilateral development banks,” Modi said during the third leaders’ session of the New Delhi leaders’ summit, which began on Saturday. “Our decisions in this direction should be immediate and effective.” Despite geopolitical tensions and discord over Ukraine, Indian officials say they have advanced an ambitious financial agenda during New Delhi’s rotating presidency of the group of large economies, including reform of multilateral banks, regulation of cryptocurrencies and the framework for restructuring heavily indebted countries’ debt. India, which styles itself as a leader of the so-called “Global South” group of developing economies, on Saturday successfully pushed the G20 to admit the African Union as a full member of the grouping. Modi’s call for an expanded mandate for multilateral banks echoes demands made by the US and EU for reforms of the World Bank, which are seen as crucial in helping poorer nations meet the financial demands required to pivot away from fossil fuels and adopt green technologies.Washington is also concerned that a rise in bilateral lending by China will lead to stronger diplomatic ties between the Global South and Beijing. Ahead of the summit US president Joe Biden pitched for a $25bn increase in the World Bank’s lending capacity for middle-income and low-income countries, with the potential for that to grow to more than $100bn if other countries make additional pledges.Separately the EU has prioritised wide-ranging reform of the lender to give developing countries more sway over their decisions and operations. The US is likely to resist this, should it grant China a greater voting share. On Saturday, the leaders of the world’s 20 biggest economies agreed a joint statement that “call[s] on the [multilateral development banks] to undertake comprehensive efforts to evolve their vision, incentive structures, operational approaches and financial capacities so that they are better equipped to maximise their impact.“We will collectively mobilise more headroom and concessional finance to boost the World Bank’s capacity to support low and middle-income countries that need help in addressing global challenges,” the statement added. It provided no details on the possible scale of the increases or timeframe.Separately, IMF head Kristalina Georgieva said the fund‘s lending quota needed to be increased. Leaders agreed that a review into its quota would be included by December 15 this year.“To make the global economy stronger and more resilient in a more shock-prone world, it is vital to reach an agreement to increase the IMF’s quota resources before the end of the year and secure the needed resources for the fund’s interest-free support to the poorest countries,” Georgieva said in a statement at the summit. More

NEW DELHI (Reuters) – It is vital to increase quota resources for the International Monetary Fund (IMF) before year-end, its chief, Kristalina Georgieva, said on Sunday, while urging members of the G20 bloc to deliver on a promise of $100 billion a year in climate funds.In a declaration at its summit in New Delhi this weekend, the grouping vowed to tackle debt vulnerabilities in low and middle-income countries “in an effective, comprehensive and systematic manner”, but offered no fresh plan of action.”G20 members must lead by example in delivering on the promises of $100 billion per year for climate finance, supported by strengthening the multilateral development banks,” Georgieva said in a statement at the end of the two-day summit.”Countries also need to mobilise domestic resources to finance and manage the green transition through tax reforms, effective and efficient public spending, strong fiscal institutions, and deep local debt markets.”She urged the grouping to strengthen the global financial safety net. “To make the global economy stronger and more resilient in a more shock-prone world, it is vital to reach an agreement to increase the IMF’s quota resources before the end of the year,” she said.Such a pact would secure resources needed for the Fund’s interest-free support to the poorest countries through the Poverty Reduction and Growth Trust, she added.The G20 summit also pledged to strengthen and reform multilateral development banks, while accepting a proposal to regulate cryptocurrencies more tightly worldwide.”More work lies ahead, including in the realm of digital money and crypto assets,” Georgieva said. More