As Britain retreats from Europe, should Asia care?

Brexit took another twist with an announcement of a snap election on June 8 by current British prime minister Theresa May, and according to Roland Rudd, chairman and founder of Finsbury, the move was mostly about shoring up party support.

Should Asia care about Brexit?

“In terms of timing you can see why she [May} wants to do it, she’s 20 points ahead in the opinion polls,” said Rudd at his talk, What does Brexit mean to Asia, at Lee Kuan Yew School of Public Policy.

“During her speech, she said ‘we have a divided parliament,’ which is true, which is what parliamentary democracy is about and she wants to end the divided parliament, by obviously coming back with a crushing Tory victory for Brexit,” he added.

Should Asia care about these events happening halfway across the world? Rudd appears to think so, as he states that a Britain’s retreat from the world stage is bad for everyone.

“I think the retreat from the world by Britain is bad news, and I also think that EU will become weaker without Britain, and of course being from Britain I mustn’t exaggerate that point,” said Rudd.

“Britain has been a good force in the EU, in terms of being open, and competitive markets and that sense of liberalisation, there were other strong voices in the EU, but without Britain there will be one less,” he added.

Britain’s contribution as an influencer of foreign policy in the EU is something that will also be missed.

“In terms of the two sets of sanctions that were applied on Russia, Britain played a very key role in persuading Germany to get behind those sanctions, which arguably hit Germany much harder than Britain, as well as Italy, where Italy was very much against Russian sanctions but was persuaded to, not just by Britain, but was a powerful voice,” said Rudd.

“When you lose that voice, I do think the EU will become slightly weaker,” he added.

Where does this leave Asia then? There are now opportunities for new trade deals as Britain goes on tour in Asia to find opportunities outside of the European Union.

“It was obvious we were going to look for these opportunities when Theresa May appointed a secretary of state for International deals, when we were going to come out of the single market and customs union, otherwise we won’t be able to do these separate trade deals,” said Rudd.

“We are now going to be trying to set up some of these deals, no doubt we will call on Singapore. But the problem is the minister’s been caught looking towards rascals and rogues for these free trade deals, and I think it is slightly inopportune to go to the Philippines and stand shoulder-to-shoulder with the president and talk about shared values, when the one person not to talk about shared values is president Dutete,” he added.

Rising right wing sentiments in EU

The rise of right wing thinking and economic nationalism has been clearly documented with Trump’s election victory and even the Brexit referendum, which to Rudd is a very new thing that has emerged from the 2008 financial crisis.

“I think the sense of governments bailing out banks and not coal miners, steel works or other manufacturers have created a huge sense of unfairness, and it did also exacerbate the [economc] inequality. The irony is that people have become more equal over the past four decades not less equal, but the disparity has grown,” said Rudd.

“The 1% here isn’t so much the issue, the 0.1% poses the issue, and that has led to a lot of anger, and you see that playing in France,” he added.

This issue plagued the referendum as well, according to Rudd, where voters could now ostensibly lash out at the establishment.

“One of the issues through the referendum campaign, if you went to places like the midlands or the north of England, when you spoke to people who didn’t have a stake in society, who were unemployed, didn’t think there was any chance to get a job in any manufacturing sector, went for Brexit,” said Rudd.

“Quite often these people have never voted before, and it was their chance of saying, ‘I have now found a voice to really kick at the establishment,’ at the same time you get the resentment of those who are wealthier, you add in the resentment of foreigners who dare to do better, that’s where you create this economic nationalism, which is becoming a prevalent thing,” he added.

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