EU Relations with China and India: Courting the Dragon, Wooing the Elephant

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Europe can pursue a more interests-based and assertive engagement with both China and India that finds the right mix of realism and self-confidence to make the most of its comparative advantages.
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The European Union’s relations with China and India have been hampered by both Brussels’ limited foreign policy capabilities and by competition among member states. Difficulties have been accentuated by unrealistic expectations of shared objectives with its strategic partners. China in particular has been able to capitalize on European disunity, misperceptions, and lack of resolve.

Although European exports are increasingly dependent on the vast markets of China and India, policymakers in national capitals and Brussels should remember that the dependence is mutual. Europe can pursue a more interests-based and assertive engagement with both countries that finds the right mix of realism and self-confidence to make the most of its comparative advantages.

Europe in the Asian Century

Von Muenchow-Pohl is a nonresident scholar in Carnegie’s South Asia Program, where his work focuses on Indian domestic, foreign, and economic policy.
Bernd von Muenchow-Pohl
Nonresident Scholar
South Asia Program
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When the European Union launched its “European Security Strategy” in 2003, it seemed poised to assume a defining role in shaping the emerging multipolar world order in the new millennium. With the successful integration of the former Soviet satellites in Central and Eastern Europe almost completed; a new common currency as the most visible symbol of its status as an economic superpower; and further steps towards political union in the form of a European constitution on the horizon—European leaders felt encouraged to extend some of the principles that had guided the process of European unification to the EU’s emerging common foreign policy.

The world’s largest trader aspired to a corresponding role as a global political player. Beyond its traditional focus on transatlantic ties and its eastern and southern neighborhood, Brussels sought in particular to expand its engagement with the emerging powers now seen as crucial partners for “effective multilateralism”. This vision of rule-based global governance mirrors the EU’s own internal dynamics. In this quest, effectively engaging both China and India was considered vital.

The EU’s self-confidence proved relatively short-lived. The failed constitution project, the global financial crisis and the prolonged sovereign debt and Euro crisis in its wake continue to have a profound effect on the way Europe sees itself and its place in the world and how it is seen by others. Simultaneously, the Asian century arrived earlier than expected. The United States has now officially acknowledged this paradigm change with a “pivot to Asia” and there is growing concern in European capitals that transatlantic relations will decline further in importance for Washington unless the EU manages to gain more political traction in Asia.

China has for quite some time topped the EU’s Asian agenda, whereas India appears as a somewhat distant runner-up, both in terms of economic and political importance. This gap is unlikely to narrow anytime soon as China’s global footprint continues to increase rapidly. For the EU, relations with Beijing have become second only to those with Washington.

In spite of different degrees of daily attention devoted by the EU to China and India, there are congruencies and similarities in the issues that define the relationships between Europe and China and Europe and India, the policies adopted by Brussels and the underlying political philosophy, and the problems both partnerships have encountered. At the same time, there are noticeable differences. With both relationships maturing at a time when Europe itself is going through difficult times affecting its economic and political leverage in Asia and elsewhere, will these differences become more pronounced? And what are the long-term perspectives for both partnerships?

Evolving Ties

India established diplomatic relations with the then European Economic Community (EEC) in 1963. The People’s Republic of China followed in 1975, after all member states of the European Communities had recognized Beijing as the sole legitimate government of China and broken formal ties with Taiwan. At this time China and India were still at similar levels of development and integration with the world economy. Trade and aid constituted the primary focus of Europe’s engagement with both countries.

As China’s growth rates picked up dramatically following the introduction of economic reforms in 1978, Brussels’ interest in expanding relations grew correspondingly. A Trade and Cooperation agreement was signed in 1985, still the formal basis of EU-China relations today. The European Community responded to the 1989 Tiananmen Square events with the declaration of an arms embargo, and the political relationship cooled off temporarily, while trade and investment continued to rise. Following the normalization of relations in the mid-nineties they increasingly extended beyond economic and bilateral affairs to regional, international and security policy issues. This culminated in the declaration of a strategic partnership in 2003.

Europe’s relations with India followed a similar path. A commercial cooperation agreement was signed by the EEC in 1973, and in 1994 the newly created EU and India concluded a broader cooperation agreement which also instituted a regular political dialogue. India’s 1998 nuclear test dealt a brief setback to the nascent relationship, but it was brought back on course with the first annual summit in 2000 and elevated to the level of strategic partnership in 2004.

Real Strategic Partners?

Although the growing profiles of China and India as global political players in addition to the sheer size of their economies and the opportunities this promises for European companies provided compelling reasons for formally upgrading the EU’s relationships, this step came about in different ways. Strategic partnership with China was implicitly acknowledged in the 2003 summit communiqué without any fanfare after both sides had issued policy papers outlining their rationale, priorities, and objectives for the partnership.

In the case of India, on the other hand, a formal political partnership declaration was further substantiated through a detailed Joint Action Plan covering the whole range of EU-India relations. One important reason for this different approach can be found in the great emphasis the EU-India documents put on shared beliefs and values: democracy, pluralism, rule of law and human rights. This underpinning is so far missing in the EU’s strategic partnership with China.

Brussels overtures to New Delhi might have been directed by greater expectations of common ground as compared to Beijing, but its relationship with both Asian powers has since been exposed to a series of reality checks. This includes trade and investment matters, the scope for political cooperation, and the lack of convergence on global governance issues such as tackling climate change. Given the gap between intent and outcomes produced so far, critical observers have questioned whether the EU’s partnerships with China and India can be called strategic at all.

As a sobering experience for the EU’s belief in “effective multilateralism” through alignment with strategic partners, the 2009 Copenhagen climate summit stands out in particular. Copenhagen was nothing short of a debacle for the EU’s goal of committing the U.S. as well as the major emerging economies China, India, and Brazil to support universally binding emission reductions. Outmaneuvered and sidelined by these four “strategic partners” on climate change, Europe’s most prominent and most ambitious global governance project, EU leaders came to the painful realization that they needed to rethink their common foreign policy objectives in broader terms.

This exercise was initiated at a special summit in Lisbon in September 2010 where it was agreed that, among other things, Europe would have to be more forceful in defining and pursuing its own interests. An internal policy paper tabled in a follow-up meeting in December 2010 advocated a more pragmatic approach toward China, standing firmer in the defense of Europe’s key economic interests and shedding earlier illusions of nurturing political change in the Middle Kingdom through closer engagement. Recognizing China’s new status as a “major world power”, however, the document suggested trilateral meetings between the European Union, United States, and China. A third special EU summit in 2011 planned to conduct a similar review of the strategic partnerships with India, Brazil and others, but leaders’ attention was diverted by more dramatic events closer to home—the unfolding Arab Spring and the EU’s own deepening debt crisis.

Impact of the Euro crisis

The eurozone’s financial woes have increasingly dominated the meetings of European leaders over the past two years and have pushed most foreign policy issues to the bottom of the joint agenda. They have also significantly changed how the EU is viewed by its partners. Whereas vibrant Indian public opinion has always tended to be more critical about the ability of an aging Europe to retain a competitive edge vis-à-vis the emerging economies, and even more so about its willingness to set aside national special interests and member states prerogatives for a coherent EU foreign policy, similar sentiments were less openly voiced in China before the unfolding of the sovereign debt crisis.

The longer Europe remains in financial limbo and the more China and India feel its negative impact on their own economies, the less likely Beijing and New Delhi will be to regard the EU as a global player in the same class as the United States. Since the announcement of the two strategic partnerships almost a decade ago, the weight has shifted away from Brussels – most noticeably in the EU-China partnership. The changed balance was highlighted by the unsuccessful attempts to persuade Beijing to buy into the European Financial Stability Fund set up to bail out faltering eurozone members.

Comparing Relations in Key Areas

Trade and Investment

Regardless of Brussels’ larger political ambitions reflected in every summit statement, economics continue to dominate both relationships to a large degree. The EU-27 is the biggest trade partner and largest investor for both China and India. For the EU, the value of trade in goods with China is only surpassed by that with the United States. India, with its more modest overall 2.5 percent global share compared to China’s 13.3 percent in 2011, has advanced to the eighth largest trade partner. Europe’s trade with China, however, continues to be weighed down by a gigantic deficit which stood at almost €156 billion in 2011. This negative balance is more than twice the size of EU total trade with India. Unlike in the U.S., there has been little wider political debate about the lopsided trade relationship with China.

While it can be argued that the staggering Chinese surplus reflects successful European direct investment and years of large-scale relocation of production facilities to China because of lower labor costs, it is at the same time testimony to the lack of a level playing field in the economic relationship. China enjoys relatively unrestricted access to the EU’s single market at marginal tariff rates, and faces few hurdles for its investments. European companies, on the other hand, continue to suffer from a host of serious impediments to their operations in China, ranging from lack of regulatory transparency and arbitrary decision-making especially on the local level of government, ownership restrictions and severe market distortions caused by subsidies to Chinese state owned enterprises, insufficient protection of intellectual property rights, and forced technology transfers or lack of a reliable legal recourse. Contrary to European expectations, government interventions in the economy have actually increased since China’s accession to the WTO in 2002.

Given the widely divergent interests of its member states vis-à-vis China, the huge deficit has increased internal divisions within the EU rather than strengthening a common resolve to stand firm. Beijing, for its part, has been very successful in capitalizing on this apparent lack of unity. It has also effectively stalled EU efforts to replace the outdated 1985 Trade and Cooperation Agreement, which treated China in many respects as a developing country, with a more up-to-date Partnership and Cooperation Agreement as the new framework for the economic relationship on an equal footing, under negotiation since 2007.

Without more forceful efforts to address the fundamental European disadvantages in the marketplace, the huge trade deficit which is carried on into the current account balance for lack of more substantial Chinese investments will remain a permanent fixture of the relationship. As China begins to lose its low labor cost edge to other suppliers in the region and speeds up efforts to move its export industries up the value chain, the complementarity of EU-China trade is declining and Europe is increasingly facing stiff Chinese competition in high skill and core export sectors like transport equipment and machinery.

The systemic problems European companies continue to face in China have in many instances also played a role in their search for market shares and investment opportunities in India. Started by economic liberalization since the nineties, this bonanza lags the China boom by at least ten years and did not gather full momentum until the new millennium. While the value of EU-India trade is still less than one fifth of EU-China trade (and unlikely to catch up soon) it has been fairly balanced with a slight European surplus in recent years—mostly due to India’s massive needs for capital goods for its expanding economy.

The greater openness of the Indian market, however, does not make Europe’s economic relationship with the subcontinent automatically low maintenance or free of conflict. While many of the regulatory problems and the endemic red tape and corruption European operators face in India are more or less shared by its indigenous competitors, the government continues to bar or limit foreign ownership in key areas, notably in the service sector, and props up public enterprises through a complex system of cross subsidies.

Ensuring better protection of intellectual property rights is an uphill battle in India, too, notably for the pharmaceutical industry, though not nearly to the degree it plagues European business in China in general. Beyond the high tariff barriers for sectors New Delhi considers sensitive, the EU’s trade with India is hampered by frequent and opaque changes in the overall tariff structure or imposition of import or export restrictions in an attempt to regulate supply and prices in the domestic market.

Brussels has integrated most of these issues into its agenda for the EU-India Free Trade and Investment agreement which has been under negotiation since 2007, and which aims to cover no less than ninety percent of the overall volume of trade in goods and services. Following progress in the initial rounds, this ambitious project is facing strong headwinds. Neither side seems willing to yield on their core interests such as lower duties on automotive imports from Europe or unrestricted market access for Indian IT services providers. As these issues have become increasingly politicized in an adverse domestic environment, a quick conclusion which earlier summit meetings have promised repeatedly appears now questionable.

While Europe’s exchange of goods and services with India has continued to register encouraging growth even in the absence of a Free Trade Agreement, a deal would give the economic relationship a considerable additional boost. This would notably be the case with respect to European investment in India, which has been slipping lately primarily due to lack of further liberalization. Despite all uncertainties, the conclusion of the agreement remains the most tangible deliverable in the EU-India partnership, and without parallel in the EU-China relationship. Brussels, for its part, certainly entertains no such plans with Beijing for the time being. Any serious consideration of a Free Trade pact with China remains unlikely without prior conclusion of the elusive Partnership and Cooperation Agreement, and as long as the severe imbalances in the economic relationship persist.

“Effective Multilateralism”: International and Regional Cooperation

The European Commission’s “communications” of 2003 and 2004 to the member states at the European Council and the European Parliament highlight Brussels’ political rationale and priorities for embracing China and India through strategic partnerships. They also reflect the optimism and ambition that characterized Europe’s vision of the emerging new world order and its own role in it at that time. Given their growing weight, the EU expected both China and India to contribute significantly to global stability, whether through their role in the region or through wider multilateral engagement, first and foremost at the United Nations. Moreover, Brussels assumed that the acceptance of growing global responsibilities would lead to an increasing convergence of interests.

In particular the China document of 2003 must strike today’s reader in large parts as wishful thinking. A critical comparison of the EU communication with China’s own EU policy paper of that same year should, however, have already inserted a note of caution in Brussels’ overly optimistic assumptions. Where the EU invokes “shared visions and interests” vis-à-vis Beijing, China is content to seek “common ground while reserving differences” and stresses non-interference in internal affairs as an overarching principle for the relationship. The references to Taiwan or Tibet reveal an entirely different set of goals and expectations.

Since then, Brussels and Beijing have mostly failed to see eye-to-eye—not only in China’s extended neighborhood regarding the approach to the regimes in North Korea and Myanmar—but also in other parts of the world. The antagonism between the strategic partners has probably been most obvious in Africa, where China’s large and growing footprint is increasingly seen as neo-colonialist in nature by many western critics.

Beijing effectively blocked EU initiatives at the UN to put pressure on Sudan to accept a peacekeeping force in Darfur or to force Robert Mugabe to ease political repression in Zimbabwe in order to safeguard its own economic interests ranging from oil to arms sales. The protracted current stand-off at the UN over how to halt Syria’s slide into an all-out civil war or impose sanctions against Iran’s nuclear program reveals similar fault lines. Though both sides have emphasized disarmament and nonproliferation among their political priorities for the partnership and Beijing has set aside its principle of non-interference to become part of the 5+1-dialogue with Tehran, it is not willing to support tougher UN sanctions that would jeopardize its oil and gas imports.

While India shares some of China’s misgivings about European responses to the Arab Spring in general, and its positions on Syria in particular, New Delhi’s latest votes at the UN indicate that its assessment of the situation on the ground has shifted—and that BRICS solidarity with China (and Russia) certainly has its limits. India’s less categorical insistence on non-interference and opposition to the “right-to-protect” might have been helped by the obvious need to carefully balance relations with Syria against its growing economic ties with the Gulf states as the country’s main source of badly needed energy imports. India faces a similar dilemma with Iran, and has voted with the EU to censure Tehran’s nuclear non-compliance, but, like China, refuses to back stricter UN sanctions.

Judging from the wording of the 2004 “communication” making the case for a strategic partnership with New Delhi, European expectations for “effective multilateralism” appear to have been even higher than vis-à-vis China because of “shared values” and India’s active role in UN peacekeeping, conflict prevention and post-conflict reconstruction. Consequently, Brussels, aside from issues like nonproliferation of weapons of mass destruction or the fight against terror and organized crime (which also find mention in the document on China) earmarked this as a specific area for closer EU-India cooperation. These expectations, however, have so far failed to materialize, and the strategic partners have not moved past the level of political dialogue.

Among other mitigating factors, the wide gap between the EU’s initial objectives and the performance of its two strategic partnerships to date can be traced to the different perceptions of the global order in its present state. While the EU’s quest for “effective multilateralism” leans on the hitherto dominance of the West and seeks to establish its norms as the ground rules for global governance—both China and India challenge the American and European preponderance in the Security Council and the Bretton Woods institutions as no longer reflecting political and economic realities. Both Beijing and New Delhi want a greater role for emerging powers and the developing world in the redesign of this order.

Promoting Democracy and Human Rights

This promotion of democracy and human rights as part of the EU’s normative agenda ranks high in the initial set of objectives Brussels spelled out for its closer relations with China and India. However, the focus in each case is different. For the partnership with China it is the support of a gradual transition to an open and pluralistic society based on the rule of law, democratic participation and the respect for human rights. India, as the world’s largest democracy, is seen as an important partner to jointly promote these shared fundamentals in the region and beyond. As with other strategic partners, the EU also established a regular bilateral human rights dialogue focusing on developments within Europe and India, but the real added value was expected to materialize in multilateral cooperation and joint initiatives in third countries.

In both instances, the EU’s normative approach has remained well off target. In 2006 a European Commission document prepared for both the Council and Parliament rather candidly admitted that European expectations for the human rights dialogue with China were “increasingly not being met”. Having successfully staged the Beijing Olympics in 2008 and the World Expo in Shanghai in 2010, the authorities’ low tolerance for any sign of political dissent and demands for more democratic participation and civil liberties has become more visible again.

Beijing’s heavy-handed judicial as well as extra-legal measures against human rights activists, including Liu Xiabo and Chen Guangcheng, in recent months may have evoked protests from various quarters, but have so far not led to any adjustment of EU policy towards China. On balance, a more robust European stance regarding China’s democratic and human rights deficits seems increasingly unlikely as the eurozone crisis deepens further, and as the momentum of the global economy becomes more and more dependent on continued strong growth in China and other emerging markets. Beijing is well aware of the shift in power in the relationship. Admired in many parts of the world as an economic model, and increasingly assertive in its foreign relations as evident in the South China Sea, it sees little reason to veer from its course in order to placate European sentiments its leadership does not share.

While the annual human rights dialogue between the EU and India has overcome its initial tensions around sensitive issues like Kashmir or the massacre of Muslims in Gujarat in 2002 and transformed into a constructive and open exchange of views and information, the high hopes Brussels had for India becoming an active promoter of democracy and human rights did not materialize. New Delhi contributes to the UN Democracy Fund and assists in local democratization projects in Afghanistan and other countries, but insists on the consent of the host government as precondition for any financial or technical support. Committed to its non-aligned creed of non-intervention in what it considers the internal affairs of others, India continues to abstain when any country-specific resolution comes up for a vote at the UN Human Rights Council in Geneva.

The only recent exception to this rule was Indian support for condemnation of the Sri Lankan government for not making good on its promises to better safeguard the rights of the Tamil minority after it had won the war. This was, however, motivated solely by domestic political considerations. European expectations that India’s well-established and highly regarded democratic credentials would help spread the shared values abroad and give political support to popular movements against autocratic regimes were most visibly shattered in the course of the Arab Spring. Like Beijing, New Delhi left no doubt that it rejected the western interpretation of the right-to-protect, and considered regime change out of bounds of its foreign policy.

Sustainable Development, Energy Security, and Climate Change

In spite of the important role of development cooperation for defining the European role in China and India in earlier years, the EU documents of 2003 and 2004 laying out the rationale for entering in strategic partnerships with both countries devote relatively little space to the issue of sustainability. The 2006 EU Commission “communication”, however, illustrates how the rapid growth of China’s global economic and environmental footprint has pushed sustainable development to a top position on Brussels’ agenda, linking growth, energy security, and climate change mitigation and underlining China’s global responsibilities. Prior to this, the 2005 summit meeting had already established a EU-China “climate change partnership”—aiming to upgrade bilateral cooperation as well as joint multilateral efforts within the UN framework convention.

Although China has intensified its efforts to become less dependent on fossil fuel imports to sustain its high growth rates, as well as to increase its energy efficiency and grow non-carbon energy sources in recent years, Beijing and Brussels have seldom been on the same page when it comes to climate change as a global governance issue.

China continues to vigorously defend its status as a developing country under the UN framework convention and the principle of “common but differentiated responsibilities”, exempting it from binding emission reduction targets even though it has overtaken the U.S. as the world’s largest emitter of greenhouse gases in absolute terms. Simultaneously, it clings to the principle that the industrialized countries (the so-called Annex-1 countries of the Kyoto protocol) should pay for the transfer of clean energy technology to the developing world.

While Beijing managed to capitalize on U.S. intransigence against accepting emission ceilings to deflect pressure over its own refusal to consider mandatory cuts at the 2007 Bali conference, it was at the 2009 Copenhagen conference that China openly assumed the role of climate arch villain in the eyes of Europe, masterminding and leading the charge to wreck the EU’s plans for an ambitious fifty percent reduction target and replacing it with non-binding individual commitments in the “Copenhagen accord.” The fact that Prime Minister Wen Jiabao preferred to stay in his hotel room and left it to a deputy minister to deliver China’s veto to the small inner circle of world leaders in Copenhagen trying to salvage the climate talks in the eleventh hour added insult to injury and remains unforgotten in European capitals.

Though India’s total and per capita emissions are still only a fraction of China’s, the mere size of its population and economy make it a crucial factor for any coordinated effort to mitigate global warming. Consequently, the EU also identified this as a priority item for its strategic partnership with India. Results have been mixed at best. As in the case of China, there is considerable interest in European energy policies, measures to boost energy efficiency and clean technologies, but little to no concerted efforts at the multilateral level. In the UN climate conferences, New Delhi has so far adhered to the same basic principles as Beijing, unwilling to let mandatory emissions targets get in the way of strong economic growth.

Content to let China take the lead (and the heat) in Copenhagen, India emerged as the main obstacle to universal emission ceilings two years later in Durban, but found itself increasingly isolated and had to acquiesce in the end because a majority of developing countries supported the EU proposal. For Brussels, the learning curve with both Asian powers shows strong similarities. Focused on their growth imperative and—like the EU—concerned about their growing dependence on fossil fuel imports, China and India appear equally keen to profit from European experiences to diversify energy sources, use clean technology to boost energy efficiency and reduce the carbon footprint of their economies.

The EU’s goal to extend the emission reductions targets of the Kyoto Protocol to the emerged economies in order to halt global warming, however, has been met with fierce resistance in Beijing and New Delhi alike. It should expect further opposition and delaying tactics in the upcoming negotiations to implement the “Durban platform”.

Divisive Issues: The Arms Embargo and Nuclear Cooperation

Unlike the U.S. arms embargo against China, Europe’s response to Tiananmen Square was never written into law. Strictly speaking, the EU arms embargo consists of a single sentence in an EU council resolution. It is a political declaration, left to the member states to enact according to their respective constitutional requirements and individual arms control legislation, as well as to monitor compliance on a national level. Against this backdrop, it can hardly be surprising that the embargo has seen quite varying degrees of implementation and remains the object of internal European controversies.

While no EU member state has allowed exports of arms and offensive systems to China, various dual use technologies continue to be sold and licensed, notably from France and the United Kingdom, and integrated in military applications in China especially for air force and navy. Subcontracting from European partners has also allowed Chinese industry to gain valuable know-how in this vast grey area between civilian and military end-use.

Politically, there have been repeated attempts to scrap the embargo—with the argument that it no longer reflects the positive state of EU-China relations. Not surprisingly, these efforts were spearheaded by the member states with the strongest trade links, Germany and France, as well as by Italy and Spain. Aside from discrete U.S. pressure to keep the embargo in place, changes in government in Berlin and Paris resulted in a more cautious attitude toward China which appears to rule out a lifting of the embargo in the nearer future. Though the rapid development of China’s indigenous defense industry has considerably diminished the importance of the embargo as a potential lever, Beijing continues to regard it as a major political irritant and regularly assures its inclusion in the EU-China summit agenda.

A similarly controversial issue in Brussels remains the extent of EU nuclear cooperation with India. Although intense U.S. lobbying in the Nuclear Suppliers Group persuaded its more reluctant European members not to stand in the way of the historic U.S.-Indian nuclear deal allowing for the exports of nuclear fuels and technology to India in spite of its unchanged status as a de facto nuclear weapons state outside of the Non-Proliferation Treaty, there prevails a sense of unease in many European capitals both regarding the quality of the commitments made by India to secure the agreement and the wider consequences for the nonproliferation regime as a whole.

Some member states, however, were quick to grasp the opportunities the change in U.S. policy offered. Even before the 123-Agreement for peaceful nuclear cooperation had cleared the final hurdles on Capitol Hill, President Sarkozy signed a bilateral agreement on civil nuclear cooperation with Prime Minister Singh in the margins of the EU-India summit in Marseille in 2008, opening the India market for French nuclear technology. The United Kingdom followed suit in 2010.

Growing European skepticism of the merits of nuclear energy in general in the wake of the Fukushima accident has not helped advance cooperation with India in this field. The 2012 summit statement called for “progress and finalization” of a research and development agreement between New Delhi and EURATOM, the European Atomic Energy arm, already signed in 2009. Highlighting the shrinking consensus at home, the EU’s own official fact sheet handed out to journalists at the eve of the summit preferred to narrow the prospects for nuclear energy cooperation with India to the aspect of “nuclear safety”.

Prospects for the Future

Both the China arms embargo and the issue of nuclear cooperation with India point to a key problem plaguing the EU’s strategic partnerships with Beijing and New Delhi, and EU foreign policy in general. It continues to lack critical competences to commit Europe as a whole politically where it matters most to its partners. Particularly the bigger member states, highly protective of their sovereign prerogatives vis-à-vis Brussels, pursue their individual national agendas which often stand in the way of a unified European position. Instead of speaking with one voice and closing ranks, EU member states therefore often appear as competitors for both market shares and political attention—trying to capitalize on the setbacks to their peers where a united front would be needed. This has been particularly evident in relations with China which has been very adept at exploiting the lack of European solidarity when it comes to issues like Tibet or public criticism of its human rights record.

Although the EU has significantly scaled back its earlier overly optimistic expectations on convergence of interests and policy goals vis-à-vis Beijing in recent years, many observers agree that Europe still has not fully grasped the extent to which China has become a global power whose actions directly impact key European interests in almost every area and region. Instead, Europe continues to regard China as an emerging power in need of patient coaching to become a responsible player on the world stage. However, if Beijing’s voting record at the UN General Assembly is any indicator for the performance of the strategic partnership and the EU concept of “effective multilateralism” then the results are not encouraging. The vote match with Europe remains below fifty percent. China views multilateralism as “continuation of realpolitik by other means”, as Jonathan Holslag puts it in an article on the EU-China Strategic Partnership in the Journal of Common Market Studies.

Instead of subscribing to the EU’s vision of norm-based global governance through strengthened multilateral institutions, Beijing has become very skillful in using these institutions and fora to pursue its own interests—often directly counteracting European initiatives whether in trade negotiations, climate talks, or at the UN Security Council. Focused on the U.S., China tends to see the EU increasingly as a secondary political force with a shrinking economic base whose importance to its own interests is to a large degree defined by its close alignment with Washington.

Critical observers including John Fox and Francois Godement in their power audit of EU-China relations for the European Council on Foreign Relations see Europe’s lowered standing on Beijing’s political priority list as a direct result of what has been described as the EU’s “unconditional engagement”, giving China unlimited economic and other cooperation benefits without reciprocity or a political quid pro quo.

Unless this approach is replaced by an interest-based paradigm of “reciprocal engagement” (and vigorously backed by all EU member states) China will continue to exploit European weakness and disunity. Further, the EU needs to concentrate on a smaller agenda of those policy areas which are of key relevance to its interests and where it can reasonably be expected that a collective European effort will make an impact. This streamlining can only succeed if member states stop bloating the EU’s joint agenda with their special interests. This applies to relations with China, but holds no less true for the engagement with India.

Shared fundamentals notwithstanding, the performance diagnosis for the EU-India strategic partnership shows more similarities than differences with Brussels’ China record. While the common ground of parliamentary democracy, pluralism and the rule of law had no doubt heightened European expectations of converging interests and objectives, this false assumption led to additional disappointment and frustration.

Not unlike China, India’s positions taken at the multilateral level are first and foremost a reflection of its own national priorities, of established foreign policy traditions since independence, of a growing sense of self, and the belief that the multilateral system does not adequately represent the changed political and economic realities of today’s world. Against this backdrop, India’s voting pattern at the UN continues to show much more concurrence with China or Russia than it does with the EU. Reinforced by Brussels’ capability gap and Europe’s political coherence deficits, India, too, pays more attention to those it considers its most important global peers, the United States and China, than it does to the EU, trade excepted.

Unlike the U.S., the EU, regardless of its further political evolution, cannot become an Asian-Pacific power. Its role in the region will continue to largely depend on its economic traction. Trade, investment and technology remain the main levers in the EU’s strategic partnerships with both China and India. The EU can lean on them to also pursue its wider political objectives vis-à-vis its partners. However, it must do so in a more interest-driven, persistent, and coherent manner. At the same time, it is essential that Europe further expands its economic presence to remain relevant.

While some EU member states’ export industries have become dependent on the vast markets of China and India, European policymakers should bear in mind that the dependence is mutual. The slowdown of growth in both countries has complex causes, but there can be no doubt that the slack in European demand is an important contributor. Europe’s increased economic exposure to Asia does not preclude a more interest-based and assertive engagement with China and India. The EU needs to court both Asian giants, but without romantic illusions about them or about itself. It needs to find the right mix of realism and self-confidence to make the most of its comparative advantages.

Greek mythology has it that Zeus was so smitten by fair Europa that he changed himself into a tame bull in her father’s herd to whisk her away. While a role reversal may be in keeping with the changed times, the dragon and the elephant are different creatures that demand a lot more caution. The lady is now past her prime and should not get to fanciful in her designs, lest she be taken for a ride.

End of document

Comments (1)

 
 
  • amarashish
    Europe has lots of introspection to do as disorder reigns supreme at this point in time. With regards to the dragon and the elephant—one has flawed communism to defeat it forward march, whereas the other suffers and stutters in democratic morass. Let each set its house in order first while playing ball. Only time will tell as to who becomes a cropper but yes, till then, keep guessing!
     
     
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Source http://carnegieendowment.org/2012/08/23/eu-relations-with-china-and-india-courting-dragon-wooing-elephant/g1hx

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50%

of Syria’s population

is expected to be displaced by the end of 2013.

18%

of the U.S. economy

is consumed by healthcare.

81%

of Brazilian protesters

learned about a massive rally via Facebook or Twitter.

32

million cases pending

in India’s judicial system.

1 in 3

Syrians

now needs urgent assistance.

370

political parties

contested India’s last national elections.

70%

of Egypt's labor force

works in the private sector.

70%

of oil consumed in the United States

is for the transportation sector.

20%

of Chechnya’s pre-1994 population

has fled to different parts of the world.

58%

of oil consumed in China

was from foreign sources in 2012.

$536

billion in goods and services

traded between the United States and China in 2012.

$100

billion in foreign investment and oil revenue

have been lost by Iran because of its nuclear program.

4700%

increase in China’s GDP per capita

between 1972 and today.

$11

billion have been spent

to complete the Bushehr nuclear reactor in Iran.

2%

of Iran’s electricity needs

is all the Bushehr nuclear reactor provides.

78

journalists

were imprisoned in Turkey as of August 2012 according to the OSCE.

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