What should the EU's Indo-Pacific strategy focus on?

Rather than rivalry, the Europeans should focus on connectivity and rules

Yeo Lay Hwee and Shada Islam for The Straits Times (9 April 2021)

 European Union foreign ministers are expected to approve the broad outlines of their long-awaited Indo-Pacific strategy on April 19, paving the way for the bloc's policymakers to craft a comprehensive and more detailed final document by July.

The decision to release a "European" Indo-Pacific policy, in addition to the national versions from France, Germany and the Netherlands, is good news. It also reflects efforts by the 27-nation bloc to make its already significant presence in the region matter.

The Indo-Pacific is home to four out of the top 10 EU trading partners. With its vast network of trade agreements and partnerships across the region, the EU is an active and significant Indo-Pacific actor.

True, EU member states such as France have engaged in drills in the Bay of Bengal with the Quad - a strategic dialogue group comprising the United States, Japan, Australia and India. However, the EU, with its exclusive competence in trade and being an economic and regulatory power, can help shape a more inclusive, rules-based and less security-dominated conversation in the Indo-Pacific.

As US-China rivalry intensifies, the challenge facing Europe is to bring a more inclusive, flexible and nuanced vision of global relations to the table.

EU high representative Josep Borrell recently flagged areas of possible stepped-up engagement with Indo-Pacific countries. These include trade and investment, climate and biodiversity, emerging technologies and new security threats. The "common denominator will be our interest in upholding and devising rules-based approaches", he said.

Security, prosperity

The EU can contribute to not only a free and open, but also secure and prosperous Indo-Pacific by working with the different partners on connectivity.

The EU and China agreed in 2015 to set up a "connectivity platform" to discuss synergies in transport projects under Beijjng's Belt and Road Initiative and Brussels' Trans European Networks.

With Japan, the EU signed a partnership agreement on sustainable connectivity and quality infrastructure in 2019; and last year, the EU and Asean elevated their dialogue relations to a strategic partnership.

The bloc also hopes that its summit with India next month will see the launch of the EU-India Connectivity partnership.

EU support for Asean integration during 2014-2020 was €200 million (S$318 million). This is in addition to the €2 billion of development cooperation with Asean member states. Another €94 million was spent on supporting Asean economic and trade connectivity.

The EU has in fact been a leading player on connectivity even before this became a buzzword in the 21st century. A definition of the term itself was agreed on at an Asia Europe Meeting (Asem) in 2017. In the Asem sense, connectivity is about bringing countries, people and societies closer together. It facilitates access and is a means to foster deeper economic and people-to-people ties.

As Mr Borrell wrote in his blog, in the field of connectivity, popular perception and reality are two very different things.

-Looking at the overseas development assistance (€410 billion) from the EU and foreign direct investments (€11.6 trillion) made from 2013 to 2018, the EU has been and is a connectivity superpower. China's Belt and Road initiative launched in 2013 has, until 2018, stood at €464 billion.

The EU, in crafting its own Indo-Pacific strategy, would no doubt also take note of other policies for the region. These include Japan and India's stance on a free and open Indo-Pacific, and the Asean Outlook on the Indo-Pacific. The latter adopts the most outward-looking approach, with emphasis on trust and confidence-building and promoting an enabling environment for peace, stability and prosperity.

The challenge posed by China

Drafting a new EU strategy for the Indo-Pacific that emphasises inclusivity, connectivity and a rules-based order will be the relatively easy part.

To maintain such an inclusive approach, the EU will have to stand up to increasing demands at home and from Washington to make a binary choice between the United States and China.

Under former president Donald Trump and now under the Joe Biden administration, the EU has made clear that it agrees with many aspects of the strategic challenge posed by a more assertive China - but does not always agree with the US on the best way to address it.

So it was not surprising that the EU decided to go ahead with a Comprehensive Investment Agreement with China last December, despite pressure from the US. But the EU's decision to join the US and some other Western nations in imposing sanctions on China over alleged human rights violations in Xinjiang, and the counter sanctions from Beijing on some members of the European Parliament and European think-tanks and experts could lead to the rejection of that agreement by the European Parliament.

Fundamentally, the EU believes that dialogue and engagement, even with a competitor and systemic rival, is the better way forward than a mindset of either you are with us or against us.

That's why EU policymakers have so far resisted pressure to emulate the Quad members' hard security stance and implicit anti-China bias, with Mr Borrell - taking a page from the Asean rule book - promising to use a "broad and inclusive prism" in the bloc's Indo-Pacific outlook.

But at the same time, the EU will continue to struggle over how best to reconcile its normative focus on values, including democracy and human rights, with its strong economic and security interests in Asia.

How should the EU respond, and how can the EU effectively implement the different goals in its Indo-Pacific strategy? These would require an EU that can reflect on its collective geopolitical strengths and weaknesses, understand the interests and constraints of itself and its partners and be pragmatic and nimble enough to reconcile or manage the different interests.

Issues to address

More immediately, it would require the EU to get a firm hold on its handling of the Covid-19 pandemic as well as address the rising discontent among its member states.

Sticking to sustainable and resilient connectivity as the over-arching theme of its Indo-Pacific strategy opens up enormous room for reconciling different interests and managing the competition.

The EU's regulatory power can assist in cooperative Blue Economy endeavours - those related to oceans, seas and coasts - while its Green Deal diplomacy can give a boost to the region's climate change efforts.

An EU "high-quality" connectivity blueprint will be an important contribution to the region by providing norms and standards which can help Indo-Pacific decision-makers.

Equally important is the EU's new strategy for digital transformation by 2030, with its emphasis on "human-centred" digitalisation, international partnerships in the sector and plans to set up a digital connectivity fund which could be worth a billion euros.

There is much that the EU can do to translate its presence in the Indo-Pacific into real influence. But it would require internal unity and much more coordination among EU members and institutions to ensure consistency and coherence.

Without this coherence and unity, the Indo-Pacific strategy would remain just a strategy on paper, and the EU would not be taken seriously by the other powers in the Indo-Pacific.

Dr Yeo Lay Hwee is director of the European Union Centre, Nanyang Technological University. Shada Islam is a senior adviser to the European Policy Centre (Brussels) and an independent EU-Asia commentator.