Can Europe Lead the International Order?: EU Needs to Update Indo-Pacific Strategy

In recent years, Europe has become increasingly committed to the Indo-Pacific.

By Tsuyoshi Goroku and Atsuko Higashino

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In recent years, Europe has become increasingly committed to the Indo-Pacific. Since the EU must face China in various realms, it needs a specific and effective approach. How far can the EU unite beyond each member state’s circumstances?

– In the previous round-table session, we talked about your analysis of the Ukraine situation as of mid-January. This time, we would like to discuss Europe’s China challenge, or its commitment to the Indo-Pacific. Europe’s view of China seems to have changed significantly.

Higashino: The recognition has changed a lot in the last year or two. The “Strategic Survey,” released in October 2021 by the U.K.’s International Institute for Strategic Studies (IISS), has stressed a shift in Europe’s view of China, from an economic partner to a geopolitical threat.

Decoupling from China in Infrastructure Investment

– What’s behind the move?

Higashino: We could say, one is economic, and the other is political and security reasons. When China launched the Asian Infrastructure Investment Bank (AIIB) in the mid-2010s and promoted the Belt and Road Initiative (BRI), there were growing expectations among the European countries for expanded Chinese trade and investments.

In Greece, suffering from an economic crisis, China COSCO Shipping Corporation (COSCO) operated the Port of Piraeus, and Italy became the only G7 nation to sign the BRI memorandum of understanding. With boosted investments in Central and Eastern Europe, many states and companies earned financial gains. In reverse, China was the only one offering support for the ailing countries. The result is a situation of China dependence.

But when we look at the actual state, the investments did not proceed as initially promised, and around 2021, there were some signs of fall through. The issues of the Port of Piraeus, mentioned earlier, and Montenegro’s highway construction debt are extreme cases. But as the Italian prime minister changed from Giuseppe Conte to Mario Draghi, the administration is distancing itself from the BRI.

In Japan, Greece and Italy are still widely considered as pro-China, but such an image needs updating. The move away from BRI in Europe is apparent in the Global Gateway plan announced by the European Commission in December 2021, as a strategy to provide 300 billion euros for infrastructure support outside the region.

Goroku: Besides the economic factors Higashino-san mentioned, there were also political and diplomatic aspects. By obscuring the origins of COVID-19 and deploying “wolf warrior diplomacy”—sending “undiplomatic” messages via the media/social media to promote Beijing’s claims or counter criticisms—China really ruined its image. It worked to generate a negative sentiment for those who were indifferent to the China challenge in the Indo-Pacific.

– Can the Global Gateway replace the BRI?

Higashino: “Replace”may not be the appropriate concept. First, the Global Gateway is no match for the BRI in terms of financial power. And with emphasis on sustainability, its investment values transparency of procedures and good governance, so it takes time to implement. Are developing countries ready to accept these conditions? I guess there still will be cases in the future where investment by China with financial power and loose screening will be preferred.

However, there are obviously various problems and limitations in how China promotes its BRI, and Europe has presented a new idea of infrastructure investment and has decided to nurture a “true alternative” over some time. This is not just about Europe, but also holds true for the Build Back Better World (B3W) Initiative for infrastructure assistance to developing countries announced at the 2021 G7 Summit in Cornwall.

Goroku: Regarding the rivalry with China, it’s important what kind of timeframe to consider. Since China itself is anticipating a long-term competition, Europe also needs to consistently present its long-term effectiveness. In infrastructure development, the “quality” is absolutely crucial.

Higashino: Instead of taking it on by itself, Europe should deepen collaborations with more like-minded partners. Besides the Global Gateway and B3W, there’s also the Japan-EU Partnership that focuses on connectivity. The EU has also signed a similar partnership with India. The initiative will be driven through stronger partnerships like these and expanded collaboration network, combined with the EU’s own efforts.

Goroku: Strengthening and expanding collaboration with allies and friends, while presenting alternative measures in the medium to long term, also goes for security.

Expanded Engagement in the Indo-Pacific

– Major European countries are strengthening their commitment to the Indo-Pacific region.

Goroku: As for France, President Emmanuel Macron unveiled the Indo-Pacific strategy in May 2018, the first among the European countries. It also strengthened the dispatch of a naval fleet, including aircraft carriers and nuclear attack submarines, while conducting more practical joint drills with India, Japan. and other like-minded partners. Germany and the Netherlands have also announced their Indo-Pacific Guidelines in the fall of 2020, and the U.K. stated its “tilt to the Indo-Pacific” in the spring 2021 Integrated Review.

Despite different circumstances, they see an underlying problem—the global economic center is shifting to the Indo-Pacific, yet the region is exposed to unstable strategic and security environments with growing uncertainties. If that is the case, they should take initiative and maintain a stable order—this is roughly the shared awareness among the European nations.

Therefore, Europe’s concern and commitment will increase by additional actions by China to change the status quo by force. For Europe, status quo changes and unstable marine transport in the South China Sea are vital issues, in political and security terms as well as economic aspects. That is why the U.K., France, Germany, and the Netherlands have dispatched naval vessels to demonstrate their presence.

– What are the circumstances in each country?

Goroku: For example, with its overseas territories in the Pacific Ocean and the Indian Ocean, France has many people and a vast Exclusive Economic Zone (EEZ) in the region, and their protection would be the first objective. As for the U.K., it launched the Global Britain concept following Brexit, and the engagement in the Indo-Pacific is part of that, which I believe will intensify more in the future.

The establishment of the U.S.-U.K.-Australia security framework AUKUS, announced out of the blue in September 2021, is the first big step. In the framework, the relationship with China is also going through extensive review.

Higashino: It’s not clear at this stage how long the Netherlands will be committed, but it probably has similar motivations as the U.K. and France. Meanwhile, we’re not so sure about Germany’s intentions. Committing to a stable Indo-Pacific will lead to the issue of how to confront China.

But in 2021, when Germany was dispatching its frigate, China denied the request for a port call. Rather than sharing the same geopolitical concerns, Germany probably just went along with the more aggressive U.K. and France, so maybe it was more like a courtesy visit.

Goroku: Meanwhile, France showed the strongest leadership when drafting the EU’s Indo-Pacific strategy in September 2021, but it’s said Germany and the Netherlands have also taken initiative and worked together. Yet, the administration changed in Germany, and with the growing tension in Ukraine, the Scholz administration’s specific policy towards China and the Indo-Pacific is still not in view.

– How would you assess the EU’s Indo-Pacific strategy?

Higashino: The “EU Strategy for Cooperation in the Indo-Pacific” announced in September 2021 was very well made. It has about twice the volume of the document released six months earlier by the EU Foreign Affairs Council. The details are specific, stating to contribute to the seven key areas, including Green Transition and Ocean Governance. It also mentions concerns about China and the Taiwan Strait.

It’s a pity it coincided with the AUKUS announcement and gained little attention. I’m concerned the discussions have not progressed since then. The important part is yet to come—the framework for proceeding the discussions and accumulating specific results. Also, Europe is now caught up by the Ukrainian issue.

Japan also needs to approach in various ways so it would not be a passing movement. In fact, the strategic document refers to Japan repeatedly, as a like-minded nation. Japan closely collaborated with the EU in making this document in the first place.

Goroku: For the first half of this year, France holds the presidency of the Council of the EU, so it was supposed to be a great opportunity for specific developments in the EU’s Indo-Pacific strategy. But the EU is now wound up in the Ukraine agenda and the French presidential election is coming up in April, so I don’t think there is enough time for France to show leadership on this issue.

However, ties with France remain essential. It was the first European country to release the Indo-Pacific strategy and played a leading role in formulating the EU’s strategic document. The Indo-Pacific strategy has a relatively high priority within French diplomacy.

For example, together with the EU, France newly organized the “Ministerial Forum for Cooperation in the Indo-Pacific,” in which Japan also attended. Japan’s diplomatic power will be put to the test—applying Japan’s concerns and ideas to the EU’s strategic framework, through the existing channels with the European countries and the EU.

How to Counter Beijing’s Economic Coercions

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– China tends to exploit trade policy for political purposes. How should we respond?

Higashino: As the EU presidency, France also has stable relations with China in mind. It was willing to hold an EU-China Summit that China had called off many times. Meanwhile, President Macron made repeated statements on solving the “Lithuania dispute” (see below) before the summit. At one point, France deemed there would be no summit without settling this issue, but in the end, the EU filed a complaint to the World Trade Organization (WTO) in January. So, it seems the EU is taking a two-track approach; WTO discussions and an EU-China summit.

– What were the discussions within the EU on the Lithuania dispute?

Higashino: In November 2021, Lithuania tried to open its Taiwan Representative Office, a de facto embassy. In fierce protest, China launched various countermeasures. Targeting Lithuanian products, it imposed discriminatory import restrictions, generating a great impact. In response, the French government expressed support for Lithuania, and is having the whole EU address this issue. Beijing will disregard complaints by a small country, but it may lend an ear to France speaking on behalf of the EU.

For that, however, the EU needs to solidify within the region and the attention is again on Germany. China’s Global Times has been actively reporting that the business world in Germany values China and the new German administration will continue the China-focused policy. The Scholz administration’s handling of the Lithuania dispute will be a litmus test for Germany’s view of China.

Goroku: To counter forcible economic coercion, the EU will need an effective response. In December 2021, the European Commission announced a proposal for the EU’s anti-coercion instrument (ACI). Would Lithuania be its first case?

Higashino: The ACI is designed with China in mind, but before they could fully integrate the opinions, China imposed import restrictions on Lithuania. In practice, the ACI will not be available in time for Lithuania’s case. But in December 2021, besides Lithuania, companies in France, Germany, and Sweden were also affected. With problems becoming this big, the EU must come up with some measure. France is willing to act, seeking progress during its presidency.

Within the EU, there are critics of the ACI, mainly among the Nordic countries, saying if the EU’s regional rules are inconsistent with the WTO rules, it would affect the international trust of the EU. For the countries and companies suffering damages right now, a WTO complaint takes too much time. To counter Beijing’s economic coercion, the EU needs to formulate its own ACI, while creating a scheme to provide compensation for afflicted countries like Lithuania.


Supplementary Comments to the Roundtable Talk, Following Russia’s Invasion of Ukraine

The Effects and Limits of the Minsk Agreements

By Tsuyoshi Goroku

The Minsk Agreements of September 2014 and February 2015 were signed to attain ceasefire and peace in eastern Ukraine. The agreement covers a broad range of items, but the main points are on security, such as immediate ceasefire and withdrawal of foreign troops from Ukraine territories, and politics, such as Ukraine granting “special status” to some eastern regions controlled by armed forces with Russian support.

From the start, Ukraine and Russia disagreed on the interpretation of the Minsk Agreements. For example, Russia, despite being the signatory nation, insisted it is not a party to the conflict and therefore not bound by its terms, which differed from the stance of Ukraine and the G7.

As for the sequence of implementation of clauses, there was an enormous gap between Ukraine preferring security, and Russia demanding political points more than anything else. This strongly reflects the difference in objectives between Ukraine seeking restoration of sovereignty and territorial integrity, and Russia wanting to limit Ukraine’s sovereignty and place it under Russian influence.

Yet, the concerned nations, including the two countries, regarded the Minsk agreements as the only roadmap towards peace. This is because it had functioned to a certain extent as a device to avoid a flare-up of a major war in the eastern region and to prevent/postpone the escalation of the confrontation between the two countries over the issue.

The Minsk Agreements included details favorable for Russia. Yet, Putin chose to scrap it and invade, probably because he wanted more than the gains from the agreement, such as overthrowing Zelensky’s government, practically dividing Ukraine, and making it a pro-Russian neutral state.

From a historical perspective, with Russia’s military invasion, the post-Cold War era in Europe has come to an end. We could reposition the period as “Thirty Years’ Crisis.” From now on, there will be active discussions on reframing and reconstructing the “post-Cold War history.”

Upheaval of European Security Order

By Atsuko Higashino

In Europe, the invasion of Ukraine has heightened vigilance towards Russia, and also stirred active movements to counter the threat.

Sweden and Finland have maintained military neutrality for a long time. However, in the light of this war, the two countries have expressed their willingness to join NATO, and they may become members as early as next year. Even Switzerland, a permanent neutral country, has fully committed to the economic sanctions against Russia.

The EU is also strengthening solidarity in security. It is likely that France will play a leading role as the presidency of the Council of the EU, and the European Commission will draft the proposal, and create the overall policy in May. Likewise, the association with Ukraine will also continue. On March 18, EU President Charles Michel held a telephone conference with President Zelensky, and discussed establishing an international “Ukraine Solidarity Trust Fund.” There are also plans for supporting post-war economic recovery.

Of course, the shock of the military invasion was the direct cause that made the European countries unite against Russia. But at the root is the awareness that Russia’s action is a turning point in Europe’s security order. In particular, since the annexation of Crimea in 2014, NATO had been reverting to the military alliance that considers Russia as the supposed enemy. That trend has further accelerated by the latest invasion.

Upon invading Ukraine, did Putin imagine such anti-Russia unity by the European countries? I guess his view only focused on Ukraine, and Moldova and Georgia at most, to regain the former Soviet sphere of influence, and never considered beyond that; the structural change in Europe.

One thing we should watch out for in the future is China’s move. While the international community tightens sanctions against Russia, if Beijing seriously starts providing loopholes for the economic sanctions or support in weapons, it will be strongly recognized as a security threat by the European countries. Such tendencies are starting to show.

* Since Russia invaded Ukraine after this round-table talk was held, comments related to the matter have been added.

This article is a translation of the Japanese original published in the March/April 2022 issue of Gaiko (Diplomacy) magazine.

Tsuyoshi Goroku earned an MA from Keio University. After serving as a researcher at the EU Studies Institute in Tokyo (stationed in Ukraine), he is currently an Associate Professor at the Nishogakusha University. He specializes in the history of U.S.-European relations and security in Europe. He is the coauthor of books, including What is Defense Diplomacy? and New Missile Arms Race and Japan’s Defense (both in Japanese).

Atsuko Higashino earned a Ph.D. on political science at U.K.’s University of Birmingham in 2005. She specializes in international politics of the European Union. After serving as an expert researcher at the Japanese Delegation to the OECD and an associate professor at Hiroshima City University, she is currently a professor at the University of Tsukuba. She is the coauthor of books, including Yugoslavia after Breakup and Resonating International Politics and Regional Studies (both in Japanese).

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