AUKUS, COP26 and Northern Ireland – the key geopolitical stories traders need to know about

Mon 20 Sept 2021
Posted by: William Barns-Graham
Trade News

global trade

Global trade and international relations go hand in hand.

Trade can forge closer ties between nations, but other political and cultural developments can also serve to undermine those business links.

The IOE&IT Daily Update here looks at the major geopolitical issues impacting international trade this autumn.

1: AUKUS provokes French (and EU) anger

The French government described the AUKUS defence alliance between the US, UK and Australia – and the consequent loss of a multi-billion submarine contract with the latter – as “a stab in the back”, reports Politico.

The AUKUS pact, which seeks to challenge Chinese dominance in the Asia Pacific region, was announced by leaders Boris Johnson, Joe Biden and Scott Morrison last week. It was a blow to the EU’s own ambitions of becoming a bigger player in the region.

According to Sky News, the French could even seek to derail the twelfth round of talks for a trade deal between the EU and Australia, although Australian trade minister Dan Tehan said negotiations are continuing on business-as-usual basis.

2: China and Australia lock horns over CPTPP

Tehan also said Australia could block Chinese accession to the powerful CPTPP group unless a resolution can be found to the ongoing trade war between the two countries, reports the Guardian.

China applied to join CPTPP last week, but a decision in favour of its bid must be unanimous from the current 11 members.

Tehan said China would have to resume high-level dialogue with Australia and convince members of its “track ­record of compliance” with existing trade agreements and WTO commitments.

3: Johnson hopes to gain COPY26 plan support

The prime minister faces a frantic few days at a UN conference in New York as he tries to shore up support for a climate plan he is hoping to reach agreement for at the COP26 conference in just over a month, reports Politico.

Around 100 world leaders will gather at the UN General Assembly, providing a chance for Johnson to galvanise leaders behind his plan to rapidly end the use of coal, help poorer nations deal with climate change and push for radical cuts in greenhouse gases.

The BBC reports that the PM rates his chances of reaching a new accord at COP26 as being just “six out of 10” and said: “It’s going to be tough, but people need to understand that this is crucial for the world.”

4: NI peace will determine US trade deal chances

Nancy Pelosi, the Speaker of the US House of Representatives, said that a breakdown in negotiations between the UK and EU over the Northern Ireland Protocol would be “problematic” for a future UK-US trade deal, reports City AM.

Pelosi said it would be “very unlikely” that the trade terms coveted by the UK would be agreed to by US politicians “if there is destruction of the Good Friday accords”.

According to Politico, Pelosi told the Chatham House think tank that her comment was “not a threat, it’s a prediction.”

5: Frost concern at EU stance on NI

The minister for EU relations, Lord Frost, has said he is “concerned” by EU comments which suggests it does not want a “real negotiation” on the NI Protocol, reports the BBC.

His comments follow claims from his Brussels counterpart Maros Sefcovic that a renegotiation would lead to “instability, uncertainty and unpredictability”.

Lord Frost told the House of Lords that Britain would be prepared to suspend the Protocol by triggering article 16 of the 2019 Withdrawal Agreement if the EU didn’t take its renegotiation suggestion seriously, the Independent reports.