Interview: Assessing the EU-China-US Triangle - The Diplomat

Trans-Pacific View author Mercy Kuo regularly engages subject-matter experts, policy practitioners, and strategic thinkers across the globe for their diverse insights into U.S. Asia policy. This conversation with Dr. Frans-Paul van der Putten – senior research fellow at Clingendael and co-coordinator of the Clingendael China Center in The Hague – is the 211th in "The Trans-Pacific View Insight Series."

Explain Brussels' strategic objectives for EU involvement in China's Belt and Road Initiative (BRI).

The European Commission's first significant response to the BRI was its agreement in September 2015 with China to set up a bilateral Connectivity Platform. As part of this platform, each year a high-level meeting takes place between the Chinese government and the European Commission. These meetings are aimed at improving Sino-EU cooperation on transport corridors within and between Europe and China. Although the connectivity platform continues to function, it does not appear to have resulted in any major practical instances of European engagement with or involvement in the BRI.

In September 2018 the EU published its Connectivity Strategy for Europe and Asia. This constituted a major shift in its approach to the BRI. The main aim of the EU's Connectivity Strategy is not engagement with China: the strategy document refers to China only as one among many relevant parties and there is no mention of the BRI at all. And yet the EU Connectivity Strategy is primarily a response to the BRI, aimed at promoting a European alternative to the Chinese approach. The main concern of the European Commission appears to relate to China's growing influence in the non-EU countries of the Western Balkans, but to a lesser extent also to Chinese influence within the EU, in particular in its eastern half, and in Asia. The Connectivity Strategy of the European Union entails technical cooperation on and financing of cross-border infrastructure ̶ transport, energy and digital ̶ that is based on the EU's competition, environmental, and transparency standards. By taking this approach the EU is not only responding to the rise of China but also to the increasing importance of great power politics to the detriment of international rules and cooperation. Through its Connectivity Strategy the EU tries to strengthen its economic and diplomatic involvement in Eastern Europe and Asia, and its geopolitical relevance at the global level.

The EU took a further step in this direction in September 2019 when it convened the Europa Connectivity Forum to bring together stakeholders from a broad range of nationalities and sectors. The most important outcome of this event was an agreement by the EU and Japan to commence a bilateral "partnership on sustainable connectivity and quality infrastructure." This agreement is aimed at improved coordination between the EU and Japan in regard of their respective responses to China's BRI.

The EU's strategic objectives in regard to the BRI combine engagement with China on cross-border transportation, while pushing back China's growing overall influence and strengthening the visibility and role of the EU as an autonomous actor among other great powers.

What is the impact of the U.S.-China trade dispute on Germany and the Netherlands as EU economic and export engines?

Uncertainty resulting from the U.S.-China trade dispute, along with Brexit, has contributed to the difficulties that German export-oriented industries are currently experiencing. The German economy is contracting and appears to be falling into a recession. Also, in the Netherlands exports and investments are suffering from the dispute. Dutch economic growth remained stable in the first half of 2019, but is expected to decline in the second half and beyond. Some Dutch companies have been directly affected by the trade dispute. For instance, Philips recently announced that profits for this year will be lower due to the trade dispute. The company produces goods in the U.S. for the Chinese market and vice versa. Restructuring its production base takes time and is costly.

Assess whether EU-U.S. tariff tensions would compel Brussels and Berlin to rebalance toward China and Asia.

The EU and its member states are not likely to rebalance towards China and Asia, but they are looking for ways to increase European "strategic autonomy." Through NATO, the U.S. continues to be Europe's main security provider. Europe needs the U.S. as a counterbalance to Russia. As long as this remains so, the EU and its member states will remain geopolitically much closer to the U.S. than to China. Nevertheless, the European Union is likely to look for ways to diminish its economic and financial dependence on the United States. EU and U.S. interests are often aligned but not always, and from a European point of view the U.S. is less dependable as a long-term partner than it used to be. In my view, EU-U.S. tariff tensions are not a crucial issue, but an escalation of U.S.-China geopolitical competition would be. Potential U.S. pressure, at some point in the future, on Europe to decouple economically from China, to end cooperation with China within international organizations, or to participate in military activities directed against China would probably create severe transatlantic tensions.

How is China's BRI exacerbating transatlantic friction and fragility?

China is a major economic partner to Europe. This would still be the case if the BRI did not exist, and so far the impact of the BRI on Sino-European economic relations remains limited. The main significance of BRI for transatlantic relations is symbolic. Many EU member states signed a memorandum of understanding with China on BRI cooperation several years ago, when this attracted limited attention. Of those that did not do so, very few are likely to sign an MoU under the present conditions. Not only because of possible frictions with the U.S., but also because since 2018 the EU has become more critical of the BRI.

Explain the geostrategic risks of protracted U.S.-China trade war and EU-U.S. tariff disputes on the global economy.

A major risk relates to the paralysis of international financial and economic institutions, such as the IMF and the WTO. These were created during World War II and after to stabilize the global economy. The more major actors such as the U.S. and China resort to leveraging their mutual economic dependence for geopolitical aims, the less likely it becomes that they will cooperate on maintaining international financial and economic institutions.

Interview by Mercy A. Kuo. Published 5 November 2019 on The Diplomat.