Robert Madelin / Jan 2022
The year begins with some potential for armed clashes in Asia and Europe.
Against that background around Ukraine and Taiwan, there is also increased attention to the parallel and increasingly loud drum-beat for cold as well as, or instead of, shooting wars to be engaged in the name of freedom and rights.
It is unpopular in such times to point to the risks, costs and complexity ‘even’ of ‘merely’ Cold War policies. But someone has to do it, and that is the burden of this article.
The argument is neither for the betrayal of our own interests, nor for some starry-eyed pacifism. Global economics are an extension of diplomacy, war and other forms of inter-state rivalry. Realpolitik is inevitable, and a necessary precondition to any degree of success in the search for effective territorial autonomy, even sovereignty, in matters of technology and growth.
Within that framework, however, it is still possible to doubt that EU (or UK, or US) long-term goals can be achieved by a return to the values-based segmentation of the world that characterised the Soviet-West Cold War.
That original Cold War effectively ran for pretty much the lifetime of the Berlin Wall. So there are not so many policy professionals working today on strategic autonomy or China who have experienced the relationships and the mechanisms of that curious period. My own perspective on the period is brief and late, and mainly influenced by involvement from the European Commission side in the 80s, so the last decade of the Cold War, of the export control mechanisms then in place on sales of technology to the Warsaw Pact allies of Moscow and to Communist China.
That experience teaches, I think, a couple of lessons that are applicable to today’s calls for a return to tech controls between the Free World and China.
The first is that all controls are inevitably circumvented.
By mistake and by deliberate conspiracy, chemicals and digital kit found their way across borders. Were the lower volumes in reality low enough to make a difference in the Cold War? Hard to say.
The second is that even allies bend the rules to help their own businesses.
By very deliberate negotiation, the thresholds above which computers and chip sales were forbidden would move in mysterious ways that allowed certain, for example, US shipments while preventing legal shipments of as it might be UK or French kit that was in reality the direct substitute for the permitted sale. At a time when Europe aims at technology autonomy, and needs global markets for its own inventions, this can be a killer for current industrial strategy.
The third is that trade restrictions come with costs, notably in lost markets.
This is a much bigger potential problem in any 21st century China Sanctions War. Because by prohibiting the use in Europe of the best network equipment, we impose a tax on our own consumers, on our own Factories of the Future, on our own network operators. And by imposing an ‘us or them’ choice on third countries (think Africa…) we run a risk that we did not really face in our struggle with the technologically far weaker Soviet Bloc – the risk that huge swathes of the non-aligned world will go with China, and be lost to Western commerce and to the values-driven mission of the Free World.
My conclusion from these few indications is that the terrain for a 21st Century Cold War is going to be quite unfavourable, to the West in general, and in particular to Europe, and indeed to other allies of the US.
But terrain is not all. Some wars must be fought: however poor the prospects, they are accepted because of the awfulness of the rival, or the awful consequences of peace or of appeasement. This short note does not allow a comprehensive review of China’s current policies, but does merit a couple of key closing comments.
The first is on the legitimacy of intervention. The Westphalian settlement of the 17th century formalised non-interventionism, because that alone could end decades of bloodshed resulting from intervention. The Blair era marked a high-point in the search for an alternative theory of humanitarian intervention, but was marked also by deep divisions around the legitimacy and effectiveness of interventions ranging from Iran to Afghanistan.
So hard intervention is not today the favoured tool. Instead, we can see a more or less random walk around deterrence tactics, in the Baltics but not in Crimea, and in Asia.
Alongside deterrence, we have the ‘bully pulpit’, designed to create moral and soft-political pressures for restraint and reform on the part of the rogues around the world. Jaw, jaw, jaw is famously better than war, war, war. But - and this is crucial - diplomatic pressure has a weight determined by the audience’s respect for the standing – moral as well as military – of the speaker.
Today, we face a paradox of positioning. The free world needs to convince the unaligned. But in order to do so, we need to enjoy their respect. Our post-colonial and decolonising century will show no respect, and little tolerance, for the free world if we are perceived as proponents of ideological imperialism. This may suggest a softer talking voice than we usually seem to have: if we assume too strongly that we are right, and that everyone will follow our restrictive policies on investment and trade controls, we may lose the audience. And, by the way, the same applies to current popular ideas in EU debate, around the imposition on global trade partners of mirror-reciprocity – import bans based on the pesticides and fertilisers they use, the forestry policy they enact, their animal welfare standards. If Europe imposes such measures, which we can do in practice (albeit with uncertain international law cover), we impose our preferred policies and standards unilaterally on many established export partners: this can make every one of those governments more likely to sympathise with Chinese arguments that this sort of intervention on domestic policy is part and parcel of our China sanctions policy.
Europe surely has right on its side but needs to be more careful to pick a fight, even a cold war fight, where we really see a probability of victory, or of a net-positive impact. However noble our underlying intent, Realpolitik must be real, not aspirational.