Europe’s Incomplete Pivot to Asia

We have been talking about the pivot to Asia, and discussing for so long about the US turning its back on Europe. I have always been convinced that we should together pivot to Asia, the US and the EU. It’s our joint interest, and it would be a strategically powerful move. The reality at the moment is that somebody else is pivoting to Asia. Yes, we have do have a security challenge now, which is mainly in Europe and around Europe; yes, we need to restate the need for common work on the Atlantic, but this should not prevent us pivoting to Asia together. Otherwise, we will pay the consequences in the coming decades. It’s also an area that’s challenging for us in terms of security threats—major security expenditures, territorial disputes, historical animosities, and lack of a regional security architecture. The risk of a major threat to global stability coming from [Asia] puts the issue high on the agenda even if in the meantime we are dealing with crises all around us.

– EU High Representative for Foreign Affairs and Security Policy Federica Mogherini speaking at the German Marshall Fund in Brussels, September 10, 2014

A rising Asia, led by an authoritarian China that could soon emerge as the world’s largest economy, threatens to eclipse the global liberal order and Europe’s privileged position within it. In contrast, the democratic quality of emerging Asian powers like India and resilient ones like Japan suggests that a resurgent Asia could also naturally partner with Europe to safeguard an open and pluralistic international system in which China is a stakeholder. In recent years, Europe has made a partial pivot to Asia, but it remains underdeveloped and incomplete. While the United States has long had a Pacific orientation, it is time for Europe to develop a full-spectrum Asia policy to shape the emergence of the world’s future center of wealth and power in a way that reinforces peace, pluralism, and prosperity. Europeans will find that their strength and influence are magnified by pivoting towards Asia in ways that reinforce the transatlantic alliance, given the United States’ existing role in the region, rather than in ways that risk undermining it.

America has been a Pacific power for several centuries and has recommitted to leadership in Asia through its “rebalance” to the region. By contrast, beyond a narrow commercial agenda, Europe is far behind, with the EU’s Asia policy often consisting of little more than a trade-promotion agenda with China and other Asian economies. This is surprising given that European powers were dominant strategic actors in Asia until only about 70 years ago. The European Union’s absence as a strategic player in Asia makes little sense given its stake in the region’s political and economic evolution. After all, Asia’s ascendance is a global phenomenon, not simply a regional one, as attested by the impact of China’s and India’s rise on global energy markets, trade and investment flows, global governance, security, and development—all areas where Europe has core interests. And Europeans do have influence in the East; to take but one example, the European Union is China’s largest trading partner.

While individual European states have long pursued national strategies, the European Union has only recently developed anything resembling a unified Asia policy. Ironically, it was the internal EU debate in the mid-2000s over lifting an arms embargo on China—despite China’s rapid and destabilizing process of military modernization directly targeting the United States—that drew attention to the absence of a European Asia strategy.¹ The debate led the European Union to adopt, for the first time, a set of “Asia security policy guidelines.”² Still, Asian and American elites do not view Europe as a coherent or strategic actor in a region that produces nearly 40 percent of global GDP and surpasses any other in military spending. This is a missed opportunity for the European Union given its members’ compelling interests both within Asia and in a wider international order buffeted by the ascendance of new, non-Western powers with revisionist ambitions.

Where We Are Today?

Three of the world’s four largest economies in purchasing power parity (PPP) terms are now in Asia.³ This is a revolutionary development in an international system that has been shaped by European power for five centuries. The European Union is China’s largest trading partner, giving Europe an enormous stake in the future of the next superpower. Asia is the most likely arena for great power war as rivalries over territory and history collide with surging nationalism and weak political institutions. At the same time, more people live under democracy in Asia than in any other region of the world, attesting to the universal appeal of the values generated by the European Enlightenment—and Europe’s continuing commitment to the cause of human dignity everywhere.

The European Union brings to the table its position as Asia’s largest trading partner; its decades of experience building the strong multilateral security and economic order that Asia still lacks; its stance as a more convinced advocate on values issues than Washington’s existing allies in the region; its decisive role in institutions of global governance that directly affect Asian nations’ core interests; and an array of advanced militaries and defense industries, whose weapons sales and military cooperation programs have the scope to influence the balance of power in the Asia-Pacific region.⁴ Yet the European Union has no comprehensive policy for engagement with Asia. Some of the pieces of a more concerted approach are in place. Europe has enjoyed success in deepening trade ties with the region. Despite declining defense budgets, European nations like France, Germany, the United Kingdom, and Sweden are among Asia’s largest defense suppliers. Europe has pursued development cooperation and promoted human rights in poor but promising countries, including India, Indonesia, Vietnam, and Myanmar.

But these elements do not add up to a strategy. The European Union has not leveraged the strength of individual member states’ bilateral relations—say, Germany’s ties with China, or Britain’s and France’s with India—toward a common purpose. Moreover, Europe has been too susceptible to Chinese divide-and-conquer tactics on issues of human rights, Tibet, and market access, where Beijing has cleverly played off European nations against each other in return for commercial contracts. This has not only weakened European solidarity and the development of a common foreign policy; it has also diminished Asian nations’ opinions of Europe as a strategic actor. China’s divide-and-conquer diplomatic approach to Europe deserves closer scrutiny.

China’s Transatlantic Wedge

Once upon a time, China would have fit centrally into conversations on the future of Asia but not the future of Europe and the Atlantic alliance. This is no longer true. China’s rise has moved beyond being a regional phenomenon that primarily impacts Asia. It is a global force, creating pressure on alliances that underpin the liberal international order Nowhere is this truer than in transatlantic relations, where China recently convinced America’s closest European allies to join the Asian Infrastructure Investment Bank—Beijing’s proposed multilateral development bank— over Washington’s concerted opposition.⁵ White House officials have condemned the “constant accommodation” of China by Britain and other European powers,⁶ but it is the United States that looks isolated by this diplomatic spat, even as Beijing’s leadership remains untested and Washington is set to deliver trans-Pacific and trans-Atlantic trade agreements that are far more important economically.

American officials worry that the allure of the China market risks converting European allies into proponents of the kind of Ostpolitik that Cold War-era US leaders feared could tear apart the Western alliance by turning Europeans into middlemen horse-trading for advantage between rival superpowers. China is not yet a superpower like the Soviet Union; it needs Europe’s technology and investment capital at least as much as Europeans need access to Chinese markets. And as Russia’s army marches westward, Europeans still find US defense guarantees rather useful. Nonetheless, in at least five ways, China threatens to crack the Atlantic alliance by challenging America’s privileged position in Europe, leading to a perverse form of European “pivot” to Asia that undermines the transatlantic security order and decouples Europe from its US security provider.

First, China has called into question both the “special relationship” between the United States and the United Kingdom and American influence in NATO by tempting Britain (followed by Germany, France, and Italy) into joining the AIIB. All four countries have acted in defiance of a concerted US campaign to boycott what Washington sees as a competitor to the Asian Development Bank, in which Japan and the United States are the largest stakeholders. President Barack Obama’s campaign to prevent allies from joining the AIIB is perverse: Asia has enormous infrastructure requirements that neither the ADB nor the US foreign assistance budget can meet.⁷ But by luring America’s closest friends into the new grouping over loud protests from Washington, China has demonstrated the limits of US influence in Europe, and its ability to check-mate American power in allied capitals.

Second, China’s economic magnetism risks pulling Germany, Europe’s central power, away from both Washington and its EU partners, threatening the trans-Atlantic and European compacts.⁸ Nearly half of all EU exports to China are made in Germany. Already, China absorbs twice the value of German exports that Russia does. German-Russian economic ties have constrained Berlin’s support for tougher sanctions against Moscow following the invasion of Ukraine; closer German economic ties with China will have even greater weight in shaping Germany’s foreign policy choices. When German and Chinese leaders huddle in their now-annual summits, American (and other European) officials are anxious to know what they are discussing behind the backs of their friends.

Third, the allure of Chinese trade and capital has tested the limits of European unity by creating a scramble for mercantile advantage, pitting EU member states against one another to secure commercial contracts. European leaders’ summitry with China is too often about doing deals. In recent years, a wave of Chinese capital has washed over Europe’s shores, transforming property markets from London to Lisbon and infusing investment in both “core Europe” and in its poorer southern and eastern peripheries.⁹ Chinese companies are active in everything from Greek ports to British telecommunications, Italian electricity, and Swedish cars.¹⁰ China’s buying power has created new political groupings like the annual summit between China and 16 central and eastern European countries, which last took place in Serbia in December. China’s government has not been shy about using divide-and-conquer tactics to provide European powers with differentiated levels of access and investment on the basis of their political cooperation with Chinese goals.

Fourth, in the run-up to the seventieth anniversary of the end of World War II, China has engaged in a propaganda blitz linking European memories of the fight against fascism to what Beijing alleges is an equivalent “militarism” emanating from Japan—a close US ally that enjoys privileged partnerships with NATO and the European Union. Few countries have done more than Japan to promote peace during the past seven decades, but Chinese embassies across Europe are running a concerted campaign to vilify the West’s natural ally in Asia in emotional terms that play to the sensitivities of Europeans who abandoned war as an instrument of policy after 1945. Just when Europe needs a strong democratic ally in Asia to counterbalance ever-closer ties with authoritarian China, Beijing is cleverly driving a wedge between Japan and its Western friends.

Fifth, China’s government has withheld commercial and diplomatic access from European countries whose leaders dare to meet with the Dalai Lama and other political dissidents. This has neutered official advocacy of democracy and human rights for the Chinese people in the home of the Enlightenment. No European leader publicly stood up for the rights of Hong Kong’s citizens during their recent faceoff with the regime in Beijing over voting rights they were promised. This leads many Chinese to conclude that Europeans are engaged in a blinkered pursuit of profit that only enhances state control and repression inside China. In fact, China’s transformation into a more liberal, reliable, and transparent partner would benefit European interests across the board. Ironically, officials in Beijing would respect European leaders more if they did not so often abandon their principles in dealings with Chinese interlocutors.¹¹

Europe has “pivoted” to Asia before in ways that sowed trans-Atlantic divisions. In the mid-2000s, the European Union debated lifting its arms embargo on China, which could have seen US forces defending Taiwan confronting top-of-the-line European jet fighters piloted by Chinese aces. European officials sensibly retained the arms embargo. Today they should consider whether, with Russia simulating nuclear strikes against European capitals and deploying offensive forces along NATO’s borders, a continuing US commitment to Europe’s defense may be worth a degree of restraint in Europe’s dealings with Beijing. For their part, Americans might have a little more trust that growing European ties with China exert influence in both directions and spend more time collaborating to shape China’s behavior in ways that advance Western interests and ideals.

Policy Recommendations: Towards a Transatlantic Asia Strategy

There are specific opportunities for the Atlantic allies to work together in a structured, systematic way in rising Asia. These include China, where US and European concerns over human rights, protection of intellectual property, and rule of law are convergent, and where the West wields much more leverage than commonly understood as a result of being China’s dominant trade and investment partner. The United States and Europe should be aligned in promoting basic standards of transparency, accountability, and norms-based behavior in business transactions with China, to include minimum expectations for protection of intellectual property. Europe and the United States should enlarge and deepen their regular dialogue on China, so that European capitals can benefit from consultations before making diplomatic or commercial decisions that could impact Asia’s strategic balance. European nations are among Asia’s largest arms suppliers, but weapons sales need to be sufficiently coordinated to ensure that they reinforce rather than undermine European interests.¹² They should be clear that economic and diplomatic partnership with China does not preclude open discussions of concern for individual rights, where the West should coordinate its approaches in a way that is most effective and prevents China from dividing allies from each other over these issues. For instance, transatlantic cooperation to promote rule-of-law initiatives in non-politically sensitive sectors could be fruitful.

There is also an opportunity for Europe to join the United States in closer engagement of India, where the West has a compelling stake in supporting the rise of a developing democracy that can deliver more than one billion people economic opportunity and security through free political institutions, and which can anchor an Asian balance of power that will deter Chinese hegemony. The European Union has a strong interest in an India that is economically dynamic and opening its economy further to international trade and investment. EU-India negotiations over a comprehensive FTA have been in the doldrums for several years, in part due to the absence of economic reform and the protectionist/interventionist instincts of the previous Indian government. Now that India is generating rapid economic growth under a reformist new leadership that is opening new sectors of the economy to trade and foreign investment, EU officials should prioritize its conclusion of as the centerpiece of relations. Such a move would reinforce Prime Minister Narendra Modi’s emphasis on promoting job growth at home and making India’s economy more competitive internationally. It would also help ensure that Europe is on the radar screen for an administration in New Delhi otherwise more focused on relations with East Asia, South Asia, the Persian Gulf, and the United States.

Europe, India, and the United States also share a compelling set of domestic security concerns, particularly with respect to home-grown radicalization and terrorism. Both Europe and India are buffeted by the extremist currents emanating from Pakistan, Syria and other parts of the greater Middle East; therefore, they should launch a regular dialogue on homeland security and counter-extremism. This could include intelligence exchanges, transfer of surveillance technologies, sharing of best practices for domestic security, and an intimate dialogue on how to manage home-grown radicalism in the context of governing an open, pluralistic society. This should include a focus on how to protect and strengthen global internet freedom, including striking a balance between freedom of information and access online, on the one hand, and protecting religious and cultural sensitivities, on the other. A European-Indian dialogue on these subjects could complement US-Indian equivalent dialogues nicely.

The European Union and the United States could cooperate more systematically to develop a new transatlantic strategy for Pakistan, which is engaged in the world’s fastest buildup of nuclear weapons, threatening transatlantic non-proliferation goals. This would be in the West’s self-interest. Elements within its security establishment employ terrorist groups like Lashkar-e-Taiba as proxies against Western forces in Afghanistan and against India. Extremist groups operating in Pakistan have been known to inspire terrorist attacks in Western capitals and in India. Substantial American and European assistance programs can be better coordinated and targeted to help mitigate rising extremism that threatens Western societies, including by improving education and economic opportunity, while strengthening civilian government. Closer US-EU collaboration to strengthen civil society, improve the rule of law and civilian government administration, and expand nuclear safeguards would not only support Western interests; it would also ease India’s security conundrum vis-à-vis a neighbor that sponsors terrorism against it.

There is strong potential for Europe to play a greater role in Myanmar, where a historic political opening can be constructively encouraged—and where backsliding on liberalization can be deterred—through close coordination with the United States in diplomatic and economic engagement, and where the allies can bring to bear lessons learned in Europe (for instance, in the Balkans) to support Myanmar’s fragile process of ethnic reconciliation. The same is true as regards institution-building, where Europe is in a singular position to serve as an example to nations with only a superficial history of multilateral cooperation on how to build durable and robust regional institutions in the fields of security, trade and investment, and transnational governance. This is one area where Southeast Asian nations look actively to Europe for inspiration and guidance.

Transatlantic cooperation in Asia could also encompass security issues, where Europeans have not been pivotal players for some decades, but where a more global European Union must step up its game as competition among Asia’s rising and established powers creates dangerous dynamics that threaten international security and prosperity. It was the peculiarities of the Cold War that led to the development of separate US alliance systems in Europe and Asia. In today’s globalized world, the United States and Europe should consider linking the Atlantic and Pacific security networks in closer patterns of cooperation, e.g., a much more robust NATO agenda to partner with like-minded democracies in Asia. If NATO can enjoy ad-hoc military support from nations like Japan, Australia, and South Korea for US-European operations in theaters like Afghanistan, it should certainly be possible to imagine more institutionalized NATO cooperation, including in patrolling, training, and strategic planning, with like-minded, militarily capable partners in Asia.

More broadly, the Eropean Union should adopt a whole-of-Asia approach that gives it more negotiating power with China through strengthened relations with its many neighbors. European unity is a potent force for influence in Asia, and national strategies alone will not succeed in dealing with China, whose economic, military, and population weights are multiples of those of even the biggest European states. Europe needs to be in the Asian arena to defend its strong interests in peaceful resolution of territorial disputes, freedom of the sea lanes that carry the world’s commerce, an open economic order, and democratic development. The costs of non-engagement will only grow as Asia becomes the world’s center of gravity in economics and security. A strategic approach would magnify EU influence by aligning Brussels with like-minded democracies across the Indo-Pacific, including the United States.

Europe should also welcome Washington’s outreach to Europe to pivot together towards Asia in transatlantic fashion, rather than leaving the Americans to build a trans-Pacific future that has the unintended effect of weakening transatlantic ties. Rather than view America’s rebalance to Asia as something harmful to Europe, it makes more sense for the European Union to widen its strategic horizons in a similar way. Europe is not a competitor to America in Asia because their goals of peace, stability, pluralism, and prosperity are congruent. Tactical US-Europe competition over commercial contracts or arms sales pales in comparison to common strategic stakes in preventing regional war, supporting democratic development as a source of opportunity and stability, and ensuring that the Asian economy remains integrated with the world rather than walled off by a new sphere of influence. Beyond leveraging the transatlantic alliance, both the United States and Europe can also take advantage of close ties to key regional powers like Japan and India to engage China from a position of strength on issues of mutual concern – including the necessity of peaceful resolution of conflict, rule-bound trade and investment, and human rights.

Conclusion

Europe is a global actor that should have a global set of policies, encompassing the region that increasingly will be at the center of the world economy in the twenty-first century. Europe’s stakes lie not simply in regional dynamics but in the implications for liberal order and global governance. China’s impact alone is reshaping the world economy, global energy markets, international security, and development in Africa and Latin America. German Foreign Minister Frank-Walter Steinmeier recently highlighted the enormous pressure the post-1945 international order is under from “the shift of power toward newly emerging countries” and “the tectonic shifts best exemplified by the remarkable rise of China,” which “pose an unprecedented challenge to the world as we know it — and to our transatlantic unity.”¹³

Brussels has correctly seized on the economic competition from Asia to push ahead with the Transatlantic Trade and Investment Partnership to ensure that the depth and breadth of transatlantic economic integration remain ahead of anything that might develop across the Pacific. Leading EU states support a UN Security Council permanent seat for India; Europe has a key stake in the evolution of the G20 as well as in forums like the World Bank and International Monetary Fund, where demands for stronger Asian representation will only grow. And global issues of concern to the European Union, like climate change and Internet freedom, will be enormously affected by the policies Asian nations adopt. To the extent that China is both a top economic partner and top security concern for so many countries, it only makes sense for Europe and the United States to use their combined influence to manage relations with Beijing from a position of strength—rather than succumb to a more national approach that will disadvantage every country that cannot alone match China’s clout. Asia will unquestionably develop in a more peaceful and stable direction if Europe and the United States enjoy strong relations with a range of Asian partners than if the transatlantic allies do not work with them to shape a strategic and economic environment that incentivizes China’s peaceful rise.

If we want China to play by the global rules that have preserved peace and created unprecedented prosperity, the West and Asian partners need to collectively encourage—and challenge—China to uphold those rules. TPP and TTIP are examples of how to do this in the realm of trade; Chinese reformers have cited both agreements as reasons China should further liberalize its own economy so as not to get left behind. Rather than somehow “ganging up” on Beijing, Europe and America can thus shape an agenda that benefits China too.