London will deepen engagement with South-east Asia

Significance The United Kingdom eyes a strategic tilt to the Indo-Pacific, with South-east Asia a key focus because of its economic dynamism and the convening power of ASEAN. The aircraft carrier HMS Queen Elizabeth will deploy to the Indo-Pacific for six months later this year. Impacts The United Kingdom’s view of China as a systemic challenger makes a trade pact between the two countries unlikely. UK efforts to conclude a trade deal with India will be frustrated by Delhi’s protectionist approach. London will pursue closer defence cooperation with Tokyo.

Subject UK political, security and economic ties with South-east Asia. Significance China earlier this month reacted angrily to UK Defence Minister Gavin Williamson’s suggestion that a new UK aircraft carrier would be sent to the Pacific and that the United Kingdom would use “lethal force” against countries violating international law. Williamson indicated late last year that the United Kingdom might seek a more permanent military presence in South-east Asia. Impacts Post-Brexit, the United Kingdom will aim to negotiate bilateral and multilateral trade deals with South-east Asian countries. The United Kingdom will station more diplomatic personnel in South-east Asia, including to the ASEAN Secretariat in Jakarta. Increased UK presence in the South China Sea would be welcomed by the United States and its security partners.


Significance This follows the June 23 'Brexit' referendum, in which 52% of those voting called for the government to organise the United Kingdom's exit from the EU. The vote and subsequent leadership transition pose a foreign policy watershed. Impacts South-east Asian states will seek trade deals with the post-Brexit United Kingdom. The diplomatic importance of UK defence and intelligence aid to South-east Asia will grow. France may become more important for the EU to project its influence in South-east Asia.


Significance At the same time, the EU will lose the United Kingdom’s vital role in coordinating intelligence and leading investigations. In addition, Brexit undermines the prospects for EU-UK security and defence cooperation based on institutionalised relations. Impacts Now that the politics of Brexit is less intense, the EU and United Kingdom have more capacity to focus on building pragmatic relations. The main EU nations will only join inter-governmental arrangements with London if such cooperation aligns with EU objectives. Regulatory and trade pressures could see European defence companies, such as Airbus, more reluctant to invest in the United Kingdom.


Subject Brexit and international security. Significance Brexit in any form will make defence and security cooperation between the United Kingdom and the EU more difficult. While intelligence-sharing and security cooperation are likely to continue, even if in a more cumbersome form, there is a high likelihood of declining defence cooperation and a divergence of UK and EU defence efforts. Impacts Brexit will force EU member states to build up their military. The United Kingdom and Ireland will strengthen security cooperation over fears of a return to violence in Northern Ireland. The United Kingdom may be excluded from security arrangements between the EU and external actors such as China and the United States.


Subject FTA talks and trade tensions between the EU and ASEAN countries. Significance The EU is in free trade agreement (FTA) negotiations with some ASEAN states, even though talks over an ASEAN-EU FTA were paused in 2009. Separately, the EU is pressuring several South-east Asian countries with its trade policies and warnings over human rights. Impacts EU projects in South-east Asia related to sustainability and social justice could suffer reputational damage. Post-Brexit, the United Kingdom could distance itself from EU labour requirements to secure market access in South-east Asia. In the short term, ASEAN-EU trade frictions will have little impact on bilateral foreign direct investment.


Subject The implications of diplomatic competition in South-east Asian humanitarian and disaster response activities. Significance Two major defence cooperation exercises focusing largely on humanitarian assistance and disaster response (HADR) will convene in February. Both exercises are South-east Asia-based but encompass the wider Asia-Pacific in their membership. Humanitarian responses to natural disasters are an increasing focus in ASEAN's security pillar, and a growing priority in South-east Asia's external partners' defence policies, particularly the United States, China, Japan, India, Australia and Russia. Impacts Increasing sums will be committed to help ASEAN develop HADR capacity. The 'ASEAN way' of consensus and non-interference in members' internal affairs will confine ASEAN's HADR activities to natural disasters. ASEAN HADR will not feature in humanitarian crises arising from political or ethnic conflict. US use of HADR initiatives to connect with South-east Asian militaries (when needed) will increase.


Significance This follows Myanmar's National League for Democracy (NLD)-dominated legislature endorsing a new defence cooperation agreement with Russia on May 10. Impacts Tatmadaw modernisation activity is not evidence of preparation to leave politics. Deeper Russian defence ties with Myanmar will support Moscow's policy reorientation in South-east Asia. Myanmar and Russia are currently unlikely to agree a nuclear power deal. In the short term, substantive Myanmar-Russia counterterrorism cooperation is unlikely. Myanmar's domestic defence industry is likely to grow.


Subject Economic impact of Brexit. Significance The latest Brexit deal differs significantly from that agreed by former Prime Minister Theresa May. The United Kingdom (except for Northern Ireland) will leave the EU’s customs territory. Moreover, if the UK government refuses to sign up to “level playing field” provisions, any future EU-UK trade deal is likely to be considerably more limited in scope. As a result, the long-term economic impact of Brexit will be greater. Impacts The key issue concerning trade talks is the extent to which London is prepared to accept constraints on its future regulatory flexibility. Substantial regulatory divergence could damage future UK-EU security and defence cooperation. It is possible that the United Kingdom will leave the EU at the end of 2020 without a trade deal in place.


Significance The announcement came days after an international ruling under the UN Convention on the Law of the Seas (UNCLOS) dismissing China's maritime claims and island-building in the South China Sea -- a ruling that Beijing has rejected. This will affect an aspect of China-South-east Asia relations that has gone under-noticed amid the maritime controversies: security and defence cooperation. Impacts Despite growing Chinese interest, Thailand will still seek security ties with Washington. As a beneficiary of competing Chinese and US diplomacy, Myanmar will try to balance the two powers' advances. The further China pushes defence interests and ties in ASEAN, the harder ASEAN will find reaching common security positions. South-east Asian countries will stay ready for maritime skirmishes; they will need Western military and technological support.


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