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Transatlantic tensions and the EU-China Comprehensive Agreement
The marathon talks on the EU-China Comprehensive Agreement on Investments (CAI) finished with a sprint in late 2020, shortly before President Biden took office. In keeping with 2020’s theme of complex technical international negotiations becoming newsworthy (see also: Brexit), the CAI brought renewed focus on the broader EU-China relationship and, inevitably, the EU-US relationship. The economic and political implications for EU-China relations have been dissected elsewhere; the intention here is to step back and examine this episode in the context of the EU-US-China strategic triangle.
The deal’s finalisation prompted mixed responses. Even among EU Member States and institutions, there is no consensus on the wisdom of the timing or content – Noah Barkin identified four emergent ‘camps’. Elsewhere, there has been an outpouring of criticism of the EU, for handing China a “strategic victory”, the deal’s weakness on labour standards, overlooking China’s treatment of Hong Kong and Xinjiang, threats to democracy and human rights broadly, and the agreement’s limited capacity to change China’s problematic behaviour. Some have defended the deal, including on the basis that “its implementation should make China a more open and less opaque country, with higher environmental and labour standards”. Jake Sullivan, Biden’s National Security Advisor, tweeted that the incoming administration sought consultations with the EU, taken by some as an indication of concern.
The fanfare around the CAI and the negative responses – including the Biden administration - represents the latest in a series of episodes where Europeans have edged closer to China, only to irk the US - without apparently appreciating the extent of antipathy the action(s) would provoke. Frequently, the EU’s handling of its relationship with China leaves all three sides dissatisfied with the outcome.
The most prominent example was the EU's contemplation of lifting its China arms embargo during 2004-5 – despite US opposition, this persisted until China’s Anti-Secession Law prompted a rethink. In 2015, some EU Member States rushed to join up to China’s Asia Investment Infrastructure Bank, prompting rare public criticism of European allies by the Obama administration. While the Trump administration banned Chinese tech firm Huawei from developing a 5G network infrastructure, the EU has demurred such a response and Member States have made their own decisions. Across these issues, EU actors arguably prioritised developing relations with China and/or short-term economic gain without extensive consultation with the US. In the wake of the transatlantic dispute over the EU's arms embargo, the two initiated an East Asia strategic dialogue that was intended to facilitate communication of US concerns regarding China to European counterparts. After it became apparent that the EU would not lift the embargo, the dialogues lost salience.
Even as US foreign policy principals became more direct in articulating their concerns about the negative manifestations of China’s rise, the EU pursued closer economic relations. Negotiations on a comprehensive Partnership and Cooperation Agreement fizzled out but the CAI negotiations started in 2014. While the Trump administration stepped up the rhetoric on China, the EU’s internal institutional dynamics and policy compartmentalisation drove forward the negotiations. After the recent fallout, European officials have conceded that the geopolitical implications – including views of the US – were not taken into account.
The EU needs a more coordinated approach internally that can consider any initiative across economic and strategic/political domains. It also needs to do more to communicate with allies. At the same time, if the Biden administration is to realise its objective of reengaging with partners that Trump pushed away over the last four years, then the US too should look for new ways of communicating with these partners. Consequently, the US and EU should establish an Indo-Pacific Strategic Dialogue, improving on the framework that emerged in the wake of the embargo dispute. This time, commitment beyond short-term interactions is needed. Transatlantic rifts over China policy in recent years could have been at least minimised – if not avoided altogether – had an institutionalised forum for discussing preferences and strategies persisted. The two sides could go even further – the Transatlantic Economic Council could be used as a model for a Transatlantic Strategic Council for coordinating on matters of global importance.
The problem is not just that the US and EU disagree on the nature of and responses to the China challenge (and how to balance these with the opportunities); as mentioned there is still no clear consensus within the EU. Consequently, there are multiple levels at which there needs to be more sustained dialogue. However, the EU does not necessarily need a comprehensive strategy before engaging in institutionalised dialogue with the US. Rather, strategic dialogue with the US could help with the EU’s internal deliberations, by making clear the perspective of a key ally, providing information that might not be available to European officials otherwise, and broadening the range of policy options. That is, the dialogue could potentially help with the development of the EU’s strategy. Even if talks lead only to identification of paths that the EU does not want to follow, this will still count as progress. For US policymakers, they will be kept abreast of European thinking – minimising the prospects for surprise announcements or decisions.
Engaging in sustained, institutionalised dialogue with the US would not amount to the EU taking instructions on policy items. Rather, it would give the two a chance to communicate their preferences and work towards policy coordination in areas of mutual interest. Sometimes, they might leave the room disagreeing – but agreeing to disagree in advance, averting public admonitions that have soured transatlantic relations (albeit temporarily) in the past. Transatlantic quarrels are beneficial for China, not the EU or the US. The EU would not be surrendering its much-vaunted strategic autonomy; instead, taking the initiative to establish frequent dialogue would signal that the EU is thinking strategically and identifying areas where it needs to work more closely with key allies. The EU does not need to wait for the US to make the first move.
Finally, a new transatlantic dialogue would not necessarily be exclusive to the EU and the US. Despite Brexit, UK and EU interests vis-à-vis China have not substantively diverged. The UK has taken recent action on Hong Kong and Xinjiang, which the EU could learn from. Canada, too, has an increasingly fraught relationship with China and could benefit from engaging in these dialogues. While some would prefer NATO as the venue, the challenges posed by China are much broader than security and so require a different logic and set of policy tools. Like it or not, the sizeable economic dimension of the EU-China relationship is not going away, so the EU Member States and institutions need to be at the core of policy discussions.
Scott A.W. Brown is a Lecturer in International Relations within the School of Social Sciences at the University of Dundee and a member of the Political Studies Association. Image credit: European Council President/Flickr.