Cousin Frieda, a delightful and cheerful young lady, really only serves one purpose: to represent the world outside England. Specifically, she represents Germany, the other side of the Schlegels' heritage. Her conflicts over nationality with Aunt Juley are only half-joking, and every time they argue playfully about whose nation is superior, it's always with a slight edge of seriousness. After all, let's not forget the fact that this novel was written in 1910, only four years before a certain Archduke was assassinated (leading to World War I) and the world changed forever.
However, Frieda certainly doesn't represent Germany as an evil, challenging nation – rather, we become quite fond of her, as her cousins are, and for good reason. She's fresh, funny, and generally a lovely person. This makes the whole pre-WWI "England is good, Germany is bad" dichotomy problematic. Instead, Forster invites us to consider the possibility that things aren't that simple: maybe England and Germany are both good and bad.