INTERVIEW: Baron Green of Hurstpierpoint, Asia House chairman on Trump and ‘Asian Century’

Stephen Green — or to give him his full aristocratic title, Baron Green of Hurstpierpoint — knows all about trade. So who better to deliver a verdict on the current troubled state of global economic relations than the 69-year-old former banking chief, former British minister, and current fervent advocate for open and liberal international commerce?
“Recent developments are not good,” he said, with more than a hint of understatement, on the escalating confrontation between Donald Trump’s US, China and the EU with regard to alleged “imbalances” in export-import ratios between the biggest economies in the world.
The prospect of a full-blown global trade war between the US and the rest of the world has increasingly alarmed economists, business people and policymakers since President Trump was elected two years ago, and recent actions have done nothing to reduce the threat to the global economy.
“What is really worrying is the way in which the US administration has sought to tackle a bilateral imbalance. All the economists agree that approaching trade in a bilateral way is not wise. Now, the tit-for-tat aspect to it has brought the EU into it as well,” said Green.
A big part of American industry is against Trump in this respect. In recent weeks, leading US companies such as General Electric and General Motors have come out against moves to raise tariffs on imports from the rest of the world. Last week, the iconic motorcycle manufacturer Harley Davidson announced it was moving some production outside the US to avoid tariffs.
Green thinks that US business can eventually temper the President’s hot-headed protectionism. “I suspect and I hope it will not go much further, because US business will respond in the same way as Harley and the message will get to the White House that trade wars are not good for business. It’s bad for the workers, too. Again, look at Harley. That is the president’s constituency and it will give him pause for thought,” he said.
Green thinks there is another way to calm disagreements in the global commercial arena. “There are other ways to pursue trade matters. The EU also has an issue with China and the way it engages in international markets, for example on the matter of technology transfer. These are legitimate issues.
“It is wrong to paint it as a black-and-white affair, with all the blame going to Trump. There are problems on the Chinese side, there is no doubt about that. China can be protectionist, too, as much as any other state. But if you are committed to a liberal trade environment that benefits all, you have to focus on the fundamental issues. The Europeans are more measured in their response, more focused on the real issues,” he said.
Much of his focus now is on China, and the rest of Asia, in which he includes the Middle East. He is chairman of Asia House, a business and economics consultancy based in London that promotes engagement between Europe and Asia.
He brings to that role many decades of experience in the top echelons of business, banking and policy-making. After a stint with the global consulting firm McKinsey (some of it spent in Saudi Arabia), he was recruited by HSBC, and eventually worked his way to the chairmanship, during some of the banking giant’s more controversial years.
In 2010, he stepped down from the HSBC job in the wake of revelations about the bank’s role in facilitating illegal financial transactions. Green, an ordained minister of the Church of England and a man with strong beliefs on an ethical approach to business matters, subsequently expressed “regret” that the bank’s control systems had failed to identify breaches and deal with them.
On leaving HSBC he became British minister for trade and investment in prime minister David Cameron’s coalition government. That gave him an expert view on the British decision to leave the EU after a referendum in 2016.
“I make no apologies for my view. I think we certainly made a mistake. It is not a matter of either trade with the EU or with the rest of the world. It should be both, we should pursue opportunities both in Europe and the international arena. Asia, including the Middle East, is growing faster than Europe, but that does not mean the EU is a less important trading partner,” he said.
The next few weeks will be crucial for the British government’s strategy to exit the EU, with crucial meetings in Brussels and the UK. “At the moment, everybody is still arguing what the way forward will be. I’m hopeful, rather than optimistic, that the way ahead will be clearer after these meetings,” Green said.
Unlike many of the defeated “remain” camp, Green is not convinced of the need for another referendum, certainly not on the basic proposition of leaving the EU. “I don’t think there is much support anywhere for the idea of another referendum, though that idea could come back in the autumn. There is an argument for having a referendum on a final deal, but I don’t think another referendum on the principle of EU membership is possible or desirable.
“Who knows what the result would be if there was another one? I get the impression the country is absolutely split down the middle, just as it was in 2016,” he said.
A post-Brexit UK will certainly be looking eastwards for trade to compensate for the business lost via EU departure, and in this respect he sees opportunities for the Middle East and the Gulf. Asia House held its first trade seminar in the region earlier this year, at the Dubai Multi-Commodities Center in the UAE, in an event that is scheduled to become an annual affair.
“The region will shift in a more easterly direction, with its hydrocarbon exports as well as with the new industries that are the result of diversification programs. I don’t think the countries of MENA will turn their backs on the west altogether, but it will be a shifting of the relative emphasis in light of the rise of Asia,” Green said.
One dark cloud on the horizon is the deteriorating relationship between Iran and its regional neighbors, exacerbated by the decision of President Trump to reimpose sanctions over Iran’s nuclear ambitions.
“The situation with Iran does not do world trade any good, if sanctions start to bite in a significant way. But it is not as important a development as the US-China tariffs. A trade war embroiling the US, China and Europe is much more significant than disruption to regional ME trade as a result of the re-imposition of Iran sanctions,” he said.
But he still sees great opportunities in the region, and in Saudi Arabia in particular. “What is happening in the Kingdom is visionary and ambitious. It certainly needed doing, from a variety of perspectives — economic, cultural and social.
“Allowing women to drive is a totemic move. It is both an important change in itself, and symbolic of the wider perception of change. It is an enormously welcome development, and I applaud it, along with the other measures that have been taken recently in allowing cinema, theater and the rest,” he said.
He would certainly encourage greater British and European involvement in the Kingdom. “Saudi Arabia is a country of 30 million people, the biggest in the region, so what happens there is fundamentally important for the rest of the Middle East and the world,” he said.
“It was an economic and social imperative to rebalance the economy to develop more jobs for young people. How much will the crown prince be able to achieve of this ambitious program? If only a half or two-thirds of it is accomplished, it would still be an enormous change,” he said.
On the subject of change in Saudi Arabia, he recalled how things were when he worked in Riyadh for McKinsey in 1979. “We were advising local government ministries on how to install proper planning systems. I remember vividly that there was an open sewer that ran down the middle of King Abdulaziz street. Of course, it’s long been filled in, but from the perspective of that kind of thing, there has already been a lot of change in the Kingdom,” he said.
For now, his work at Asia House will focus on expanding its activities around the world.
“Asia includes the Middle East in my view. In future we will expand to include Turkey, more of central Asia and Russian-Chinese relations, as well as the countries of Southeast Asia. You have to understand the geopolitics to understand business and economics. I just cannot imagine living in London in the 21st century and not being aware of the great opportunities there are in Asia,” he said.