Defence and security are becoming even more intimately tied with UK trade policy, as the country agrees new deals with both the EU and US to boost its exports and access trade finance.
Further afield, Brussels and Washington have started to dismantle their sanctions programmes that targeted the regime of ousted dictator, Bashar al-Assad, in a boost for the new government in Damascus.
UK-EU ‘defence bank’
The UK and EU are set to launch a ‘defence, security and resilience bank’ designed to help Western firms more easily access finance.
The Telegraph reports that the bank is to be modelled on other bodies like the World Bank and could receive as much as £100bn in funding from member nations. It follows text in this week’s deal between the EU and UK that pledged to “strengthen co-operation and regular consultations on multilateral affairs”.
Anonymous UK government sources told the Telegraph that the deal, which included provisions on defence, paved the way for the bank to be founded with support from both Westminster and Brussels. There are also hopes of drawing in non-European members, such as Canada and Japan.
It would build on the work of the EU’s €150bn Security Action for Europe (SAFE) fund, which the EU and UK are negotiating British access to.
The UK government also announced today (22 May) that European defence company MBDA would be making a £200 million investment in its site in Bolton.
‘Leading edge’ in procurement
UK defence secretary, John Healey, is to announce a strategic defence review that will put “cutting edge” technology at the core of the government’s approach.
In an interview with the Guardian earlier this week, he said “we have to do a great deal more in defence to get on top and then get ahead and at the cutting edge of this”, adding that he would like to see the UK military “on the leading edge of innovation in NATO on AI”.
This would be demonstrated in procurement decisions, he said, promising that “this won’t be a damp squib”. It is a pledge put into context by UK companies’ potential access to the SAFE programme.
He added:
“We have to get more tech in the hands of our frontline forces. And we have to be capable of upgrading and innovating at a wartime pace if we want to give our armed forces the edge over adversaries.”
Chip curbs ‘failure’?
The chief executive of Nvidia, Jensen Huang, has dubbed export controls on AI chips destined for China “a failure” at a news conference this week.
According to the FT, Huang told attendees at the Computex show in Taipei that “four years ago, Nvidia had 95% market share in China.”
“Today, it is only 50%. The rest is Chinese technology. They have a lot of local technology they would use if they didn’t have Nvidia.
“Local companies are very determined, and export controls gave them the spirit, and government support accelerated their development.”
Attacking the policies of the administrations of US presidents Donald Trump and Joe Biden, he said the AI diffusion rule that was destined to be implemented in May – before Trump scrapped it – was based on “fundamentally flawed” assumptions.
The rule implemented export controls on integrated circuits and AI models bound for China and Iran, with exemptions for countries including Germany. A spokesperson for the US commerce department said the rule was “overly complex, overly bureaucratic, and would stymie American innovation”.
EU Syria relief
After Trump unilaterally removed sanctions on Syria following a meeting last week with the country’s interim president, Ahmed al-Sharaa, the EU has followed suit by removing its own sanctions.
Writing on X, EU foreign policy chief Kaja Kallas said the bloc wants “to help the Syrian people rebuild a new, inclusive and peaceful Syria”.
“The EU has always stood by Syrians throughout the last 14 years - and will keep doing so.”
Emmanuel Macron, the French president, called for sanctions relief for the country earlier in the month, saying that it was in “the interest of all”, particularly the US.
Member exclusive
