The EU’s Chinese dilemma

The 27-member European Union (EU) seems to be in a dilemma, as it seeks to balance its relations with Beijing and Washington. The more the Beijing-Washington relations slide and the more the Chinese economy and market expand, the more intensity the dilemma assumes.

The EU is universally regarded as the most successful manifestation of regional integration – largely economic and partly political. Starting with a six-member European Coal and Steel Community after the Second World War, the organization went on to become an economic and monetary union of 28 members until the UK called it quits in 2020.

With or without the UK, the EU remains the only instance of a supra-government bloc on the globe, with its own legislature (European Parliament), executive (European Council and European Commission), judiciary (European Court of Justice), currency (the euro), central bank (European Central Bank) and a Common Foreign and Security Policy (CFSP). Even the 193-member United Nations can only dream of the status that the EU holds.

Yet the same EU is dependent on the US, the bloc’s erstwhile ally, and to many its mastermind, for its security. The birth of the North Atlantic Treaty Organization (Nato) in 1949 was undergirded by the need to protect the war-torn European states against the Soviet-communist threat. The most significant feature of Nato was that it made the US a European power by giving it the role of Western Europe’s protector should any of its states be attacked by the USSR or its allies.

Another important event that took place in 1949 was that the USSR went nuclear, thus offsetting the big advantage that the US had secured a few years ago. As Moscow continued to expand its muscles, the European states became increasingly suspicious of it and thus increasingly dependent on Washington against the red threat.

This is the major security dilemma that the EU has faced since its inception. In the words of Henry Kissinger, “[The] EU never fully recovered world leadership after the catastrophe of [the] First World War.” In fact, in both World Wars, it was the American intervention that tipped the scales. The Second World War left Germany, the biggest and the most powerful of Western European countries in tatters, while it sucked almost dry the UK’s conventional military might.

The defence build-up of Western Europe would have run counter to its economic reconstruction, which was the priority of the architects of the post-war international order, as well as resurrected the erstwhile German threat. However, weak military muscles attenuated the members’ capability to defend themselves against a third country and play a decisive role in international conflict resolution. European security was left in the hands of Nato, which was contrived to keep ‘the Russians out, the Americans in, and the Germans down’ in European affairs.

A year before Nato had seen the light of day, some leading European states put in place the Western European Union’s Defence Organization. However, it had to make way for Nato as the inclusion of Washington was considered essential for underwriting European security and stability. Incidentally, the headquarters of both the EU and Nato are in the same city – Brussels – and with the notable exception of the US, the membership of both organizations is largely conterminous.

The 2003 Iraq war laid bare the schism between the EU and the US as well as within the EU on international security issues. For a start, EU countries, with the exception of the UK, did not see eye to eye with the US on toppling Saddam Hussein. Later, France and Germany opposed, or at least did not concur with, Washington’s plan to invade Iraq; while the UK, along with Spain, Italy and some other EU members, not only backed the invasion but also provided troops for the campaign.

On Iran’s nuclear issue as well, the EU was compelled to follow the US in imposing menacing sanctions on Tehran in 2010. EU members including the UK, France, and Germany were part of the P5+1 negotiations, which led to the conclusion of the Joint Comprehensive Plan of Action (JCPOA), or the Iran nuclear deal, in July 2015. These countries, however, could not hold Washington back from withdrawing from the agreement in early 2017.

Nato makes it mandatory for its members to set aside at least 2.0 per cent of their GDP for defence. However, most of the EU states do not meet this target. Not surprisingly, former US president Donald Trump from time to time chided his EU allies for being ‘free-riders’ in collective security matters.

The security dependence on Washington, which racked up in the wake of Russia’s invasion of Ukraine first in 2014 and then in 2022, has put EU countries on the horns of another dilemma – this time with regard to China. Being the globe’s second-largest economy, importer and consumer market, and the largest exporter, China offers a massive opportunity for EU businesses and consumers. Should EU countries seek to build on the existing bilateral economic relations to optimally cash on the opportunities thrown up by China? Or should, taking a leaf out of Washington’s book, if not at its behest, they try to decouple from the Asian giant?

In May 2021, the EU Parliament (EP) voted to freeze the ratification of a comprehensive investment agreement with China. The pact, which was negotiated for seven years, aims at significantly raising the two-way investment and deepening the bilateral economic relations. Ostensibly, the EP’s decision was based on the perception that Beijing often acts in a way that runs counter to the bloc’s political and economic interests.

EU countries have followed the US in putting the screws on China’s high-tech enterprises, such as Huawei for allegedly spying at Beijing’s behest. Like Washinton, they also keep censuring Beijing on alleged human rights violations and on Taiwan. Beijing’s growing ties with Moscow are also a thorn in the EU’s flesh and the former is being seen as much of a ‘strategic’ threat as the latter.

China is the world’s largest producer of electric or new energy vehicles (NEVs), accounting for nearly 60 per cent of the global output. Lately, the EU threatened to clamp punitive tariffs on Chinese NEVs alleging that their production is subsidized by the government. Beijing responded by initiating anti-dumping investigations on a range of food imports from EU countries, signaling that a possible uptick in import duties on Chinese vehicles would be matched by a similar treatment to EU products.

At the same time, major EU members have kept the communication channels with Beijing open at the highest level. The German chancellor and Italian prime minister visited China in recent months, signaling that they wish to keep up the momentum in bilateral economic relations. Josep Borrell, the EU CFSP’s high representative – effectively the bloc’s top diplomat – lately warned member countries against initiating a trade war with China and advised them to maintain strategic autonomy in dealing with Beijing. “To oppose ourselves to the rise of China as a power is impossible – China is a great power”, he said.

Reciprocating Borrell’s comments, a Chinese foreign ministry spokesperson said that Beijing attached high importance to its relations with the EU and believed that the two sides should view each other as partners, not rivals.

All said, Brussels is walking a tightrope, as it seeks to even out its relations with Beijing and Washington. The US being the ultimate underwriter of the EU’s security will remain the bloc’s staunchest ally, and at least on human rights and democracy, the members will keep toeing Washington’s line concerning China. All the same, the EU realizes that it will be up the creek should it disregard the enormous potential of economic relations with China.

The writer is an Islamabad-based columnist. He tweets/posts @hussainhzaidi and can be reached at: hussainhzaidi@gmail.com