Written by Apoorva Iyer
On 19 April 2021, the Council of the European Union adopted the “European Union Strategy for Cooperation” in the Indo-Pacific (European External Action Service, 2021). On 16 September 2021, the European Union Commission and the High Representative, as per the guidelines of the Council, unveiled the “EU Strategy for Cooperation in the Indo-Pacific” which is a document that outlines a cooperation plan with the Indo-Pacific (European Commission, 2021). According to the European Union’s (EU) standards, this is a remarkable achievement. Up until recently, Indo-Pacific was not recognised in official statements, policy documents, bilateral agreements, and speeches by the EU representatives, primarily because several EU states have close economic ties with China. Therefore, creating such guidelines could send out a message of EU alignment with the USA and jeopardise the Sino–European relations. The article discusses the role of the EU in the Indo-Pacific and its utilisation for the purpose of expanding economic and trade development, security and defence and the connectivity and technology in the Indo-Pacific.
The emerging strategic importance of the Indo-Pacific
Due to their limited maritime presence, the EU, for a long time, did not pay much attention and did not frame its response to the new geopolitical situation developing in the Indo-Pacific. As a matter of fact, only France through its overseas territories and its military plays a crucial role in the area. However, in 2018, France released its strategy for the Indo-Pacific. Since then, it has been pressuring the EU to adopt a strategic outlook for the region followed by Germany and Netherlands. This encouraged other EU states to re-evaluate their policies towards the Indo-Pacific as it is expected to have a crucial role in the post-COVID-19 international order. The speed in progress in the Indo-Pacific can be viewed as the result of an effort made to counter the rise of China. Since the late 2000s, China has been driven by the “going out strategy” (Kung & Hongxu, 2020). The strategy was initiated by the Chinese government to increase their investments abroad in the field of trade and economic development, which was then later expanded to other sectors as well. That reached an all-time high in 2008, after which it initiated the “Belt and Road Initiative” (BRI) in 2013. Now, the BRI could be seen as a tool in disguise by China to show its aggression in Southeast Asia. China has been financing several infrastructural development projects in several Southeast Asian countries. After all, the gaps in the financing of the infrastructural development, low-interest rates, and developing economies have made the Southeast Asian countries get dragged along in the debt trap of the BRI (Rajah, 2020). Hence, such developments have led to an increase in interest for the West to be further involved in the Indo-Pacific to keep it free and open for operations (Chaudhury, 2021).
COVID-19 eventually made the world realise the over-dependence of the global supply chain on China. Initially, China had tried to win hearts and minds by sending medical supplies to several countries in the world. Duped as “masked diplomacy,” it was an effort made by China so as to compensate for its role in hiding the COVID-19 outbreak from the international community (Hornung, 2020). However, just when China was trying to build its image as a “friendly nation,” China again showed its true colours when it tried to control multilateral organisations such as the World Health Organisation among many others through the steady takeover of key positions in the organisation and severe diplomatic aggression assisted by economic policies (Feldwisch-Drentrup, 2020). The continuous military aggression in the Taiwan Strait, South China Sea, Hong Kong, and Xinjiang were also taken into consideration. These aspects raised concerns among the EU policymakers and member states regarding the future of EU-China relations (García-Herrero, 2019). Additionally, the growing rivalry between China and the USA has negatively impacted European interests (Lippert & Perthes, 2020). These factors made the Europeans re-evaluate their policies on the Indo-Pacific. The progress pushed Europe to pay greater attention to the Southern and Southeast-Asian areas, as the economic and political stability in the region is of utmost importance for EU interests. After all, the Indo-Pacific contributes over 60% to global trade in goods and services and foreign direct investment flows, respectively (Drishti, 2021).
EU Economic and Trade Development in Indo-Pacific
As a block, the EU is the world’s largest trader and manufacturer of goods and Services (European Commission, 2019). It is also ranked first in both inbound and outbound international investments. The Indo-Pacific is one of the biggest trade partners of the EU as it is the second-largest market for exports from the EU. Moreover, it is home to four top trading partners (European Commission, 2020).
In 2019, Germany made over 40% of non-European goods and services trade and it is only expected to grow in the post-COVID-19 world (Asia-Pacific Committee of German Business, 2021). However, in terms of the individual trade of the EU in the region, China is now the largest trading partner and has overtaken the USA, making it the largest trading partner in the Indo-Pacific (BBC News, 2021). Since its induction into the World Trade Organisation (WTO) in December 2001, China has grown faster than any other economy. From 3% in 2000, China by the end of 2015 contributed around 11% share in the world export markets. EU export of goods and services has increased 10% and 15%, respectively, and imports from China have also amplified over the years. The trade deficit also increased to $220 billion. Several other issues have also come up concerning trading with China (Policy Department for External Relations, 2020).
For several human and labour rights violations, China has come under the scanner (Asian News International, 2021). Apart from that, BRI is also one such trade project that is a cause of worry to the EU as 13 EU countries and the EU neighbourhood are part of the project. Lack of transparency in decision-making, lack of respect for labour rights, environmental protection, human rights, and the possible debt traps due to the policy, cause concern as several Balkans countries continue to struggle economically (Delegation of the European Union to China, 2017).
The closure of the Hubei province to contain the virus became a wake-up call for the world as it resulted in significant disturbance to the global supply chains (Kenner, 2020). Not only that, The overdependence on China for the global supply chain also has multiple implications on a broader EU-China trade relationship. The EU already has signed regional trade agreements with several Indo-Pacific countries such as Japan, South Korea, and Vietnam, and has also developed economic partnership agreements with several Pacific states. It also aims to have trade deals with the QUAD and the ASEAN nations (Basu, 2021).
As the EU looks forward to diversifying the supply chain in the post-pandemic world, the Indo-Pacific can play a huge role in economic and trade development. Building on the 2018 “Connecting Europe-Asia” strategy, the EU should ensure that it makes new trade agreements with Australia, New Zealand, and Indonesia so that it can increase its involvement in the Indo-Pacific through economic and trade cooperations. It also aims to resume the trade negotiations and start investment negotiations with India (European Commission, 2018). The EU can also partner with Japan and India on the newly launched “Global Gateway” in the Indo-Pacific to work on an alternative approach to the BRI (Valero & Follain, 2021).
The EU upholds similar human rights and democracy values and encourages sustainability, transparency, and local ownership in their projects. All these developments are crucial; unlike the USA which follows “power-based policies” and China is known for extensive strategic investments, the EU believes in a rule-based system for economic and trade development, which is eventually a drawback for it with the US-China rivalry in the background (Woolcock, 2019).
Security and Defence in the Indo-Pacific
The EU has for long been reliant on the USA for security and defence because of its limited joint military capacity. Thus, the security aspect has never been a priority for the EU. However, the rising USA-China rivalry and China’s military aggression in the South China Sea have drastically changed the EU’s perception (D. R. Chaudhury, 2021). China’s ambitions and assertiveness in the region have challenged the rule-based international order and impacted the free flow of international trade, which is crucial for the bloc (Brattberg et al., 2018).
Other aspects in the Indo-Pacific that impact the EU are illegal fishing, piracy, terrorism, non-proliferation, cyber security, and organised crime. Through Operation Atalanta, the EU Naval Forces (EUNAVFOR) have been a part of the maritime operation in the Western Indian Ocean with New Zealand and South Korea (Mission | EUNAVFOR, 2021)
The recent progress in the region’s geopolitics has made the EU to enhance its presence in the Indo-Pacific and “play its role” and respond to the security challenges. The EU prioritises the region to ensure “free and open global trade and sea lines of communication”. It would try to resolve those disputes following international law and the UN Convention on the Law of the Sea (UNCLOS) (Norman, 2016).
The EU aims to hold several joint exercises and naval drills, forge defence partnerships with regional powers, and offer capacity building and security assistance to its key partners such as India, Australia, and Singapore (Benaglia, 2021). It also seeks to increase its military presence through the Critical Maritime Routes in the Indian Ocean (CRIMARIO), which is an information-sharing platform that expands in South East Asia to promote safety and security in the region through web-based Information Sharing and Incident Management networks (IORIS). The second phase of CRIMARIO or CRIMARIO II began in April 2020 (Critical Maritime Route, 2021). A possible “Maritime Area of Interest in the Indo-Pacific” has been discussed to increase engagement with partners in the region. Enhancing Security Cooperation in and with Asia (ESIWA), a project to address counter-terrorism, cybersecurity, maritime security, crisis management, and its key partners, are also on the table (The EU Strategy for Cooperation in the Indo-Pacific, 2021).
Nonetheless, since the EU has not taken a strong stance on any of the security issues in the Indo-Pacific, it has so far been considered as a side layer (Banim & Pejsova, 2017). Consequently, the EU approach towards the Indo-Pacific as a silent spectator to the developments makes its position slightly sceptical (Youngs, 2015).
As the world prepares for the post-COVID-19 reality, the EU is expected to show more active participation in the region. So, the EU must be in consensus and clear its stance on the South China Sea crisis and several issues about the region. In 2016, the EU’s Global Strategy acknowledged that “security tensions in Asia are mounting” and noted that “there is a direct connection between European prosperity and Asian security” (European Commission, 2016). However, there is nothing concrete to put its words into action. Hence, it would be essential for the EU to increase its physical presence, as the Indo-Pacific has a lot to offer.
Connectivity and Technology
Connectivity is what brings people and countries together. Therefore, based on the definition of ASEM, the European Council in 2018 adopted the “Connecting Europe and Asia – Building Blocks for an EU Strategy” (European Commission, 2018a). The objective of this document was to ensure rules-based, sustainable, secure, and intelligent connectivity by upgrading the existing infrastructure and developing it around four pillars— transport, energy, digital, and people-to-people links (Okano-Heijmans, 2019).
Adopting this policy was a significant boost as connectivity is being used as a geopolitical tool to promote strategy and national interests. As the EU emphasises a sustainable, comprehensive and rules-based system, it signed its first partnership on connectivity with Japan in September 2019 (Ministry of Foreign Affairs, Japan, 2019). In December 2020, the EU-ASEAN released a joint ministerial statement that provided a framework for promoting connectivity between the two regions (ASEAN-EU Joint Ministerial Statement on Connectivity, 2020). What is more, in 2021, the “EU-India Comprehensive Connectivity Partnership” was adopted to promote “resilient and sustainable connectivity projects in India and other regions such as Africa, Central Asia, and the Indo-Pacific” (European Commission, 2021a). The developments, as mentioned earlier, became vital due to the increasing rivalry between US-China over the 5G technology.
Furthermore, technology is one of the significant aspects to ensure connectivity across the world. Nevertheless, with the rising issue of cyber security, it has become even more critical to ensure that digital governance is based on international norms and standards. The ongoing competition between US and China over technology makes it even more significant that the EU works with like-minded partners from the Indo-Pacific Region. Several countries in this region resonate with democracy and freedom of usage in technology. Also, these countries have untapped potential to align and dominate the 5G technology with the required innovation.
Moving ahead with the EU idea of democratic values and human rights, the “Digital Partnership Agreements” was signed with like-minded partners such as India, Japan, and South Korea, perfectly in line with the EU’s Digital Agenda.
Understandably, whosoever dominates the 5G technology would most likely dominate the entire technological world and thus have enough leverage over other countries due to its technological advancement (Herman, 2020). This technology can also serve strategic and military purposes. It raises concerns as it reduces the privacy of personal data (Congressional Research Service, 2021). However, technological barriers could arise due to the European Union Data Protection Regulation (GDPR) as all the businesses from across the world that operate within the EU must comply with the GDPR law.
The fundamental principle of ‘EU: GDPR’, is that the ownership of personal data remains in the hands of individuals, and not data controllers or processors. Even though the EU has tried to ensure harmony and data protection for the free flow of data, substantial technical compatibility is required that the potential partners in the region do not possess (Layton, 2019). Moreover, this is crucial as the technological aspect has been given significant emphasis in the connectivity strategy of the EU. The EU has now complied with the Build Back Better World (B3W) scheme (The White House, 2021). The scheme was launched at the G7 Summit held in June 2021 and is considered a measure to counter the BRI (Ghiretti, 2021).
The European Union strategy on the Indo-Pacific is mainly to secure its strategic and economic interests in the region. A significant development in the region is expected to have a geopolitical impact. The sudden development has taken place primarily due to the rise of China. Despite the threat by China and its belief in a rules-based order, there has been no hard-hitting statement or action taken by the European Union. The EU’s Indo-Pacific strategy is large in scope, as it contains a variety of ideas and distinctive features, including ocean governance, the diplomatic role, climate partnership, among many others. The EU has always believed in maintaining harmony and it would thus be essential to observe how it tries to implement this in the Indo-Pacific. The primary hurdle that the EU would have to cross is to ensure that all the member states have a unanimous consensus on each step and ensure that the balance in engagements is maintained. Nevertheless, if the EU can implement the elements of the strategy that has been outlined, its role and partnership in the region could become a pivotal contributor to ensure stability and rules-based international order that promotes security, governance, and development in the region.