US-China-EU Triangle: Managing the New World Order

Written by | Wednesday, May 5th, 2021
@Eubulletin

Europeans have long known that the global balance of power is shifting rapidly to Asia, and America’s attention with it. With the transatlantic alliance only barely surviving Donald Trump’s presidency, this may be the last chance to repurpose it for the 21st century.

The first months of US President Joe Biden’s administration have raised Europe’s hopes tremendously – but perhaps too much. For all of our shared values, the United States and Europe each has its own interests and perspectives, and these can sometimes take us in opposite directions. If the transatlantic alliance is to be revived, following its near-death at the hands of Donald Trump, such divergences will need to be accepted and managed. The alliance must make its core interests far more coherent, and its outlook must become more global and comprehensive. Europeans face a stark choice. If we want the US to return to its previous role of stewarding global rules and norms, we must at least do everything we can to lighten its burden by enhancing stability in our own neighborhood. And to do that, we must develop a common foreign and development policy for the Middle East, Africa, and Eastern Europe – one that offers a real alternative to China’s all-too-enticing Belt and Road Initiative (BRI) of infrastructure construction and investment across Africa and Eurasia.

NATO’S DOUBLE VISION — As matters stand, Biden will find it difficult to forge a common approach to China when the G7 meets in Cornwall this June, for the simple reason that Europe doesn’t agree with the US about the nature of the challenge that China poses. Europeans do not see China as an existentially threatening strategic competitor, but rather as a kind of “frenemy”: an indispensable economic partner with a rival (and ultimately incompatible) political system. To be sure, some in Europe are having second thoughts about this benign assessment, now that they have watched China’s ruthless clampdown in Hong Kong, mass imprisonment of Uighurs in Xinjiang, and routine thuggishness on the world stage. But Trump’s bumptious and reckless policies toward China nonetheless drove the US and Europe apart.

Obviously, Trump’s strategy of trying to subject 1.4 billion Chinese to economic “house arrest” was never realistic. Ultimately, what kind of country China becomes in the decades ahead depends on internal developments. External pressure will achieve only marginal benefits, while pushing the country further in a nationalist direction. Accordingly, confrontation or a two-pronged strategy of containment and cooperation appear to be the only options left, owing to the lack of mutual trust between the US and China. And unless the US and Europe can agree on a nuanced strategy to persuade China to moderate its current aggressiveness, an economic and technological collision seems unavoidable. If Europe wants to have any influence on that geopolitical dynamic, it will have to engage seriously with Biden on a joint strategy. Also because, unlike during the Cold War era, today‘s conflict features fundamentally different attitudes and many more potential battlefronts. For example, consider the international monetary system: Whereas the Soviet Union had no ambitions whatsoever for the ruble, China wants the renminbi to supplant the US dollar as the world’s dominant currency. And, ultimately, whereas Soviet leaders understood immediately after WWII that they were falling behind the US and the West, Chinese leaders today are firmly convinced that the West’s hegemony is drawing to a close.

THE PULL OF CHINA — Of course, America grasped the scale of the China challenge long before Europe did. It was Trump’s predecessor, Barack Obama, who first announced that the US would become more of a Pacific power. The Obama administration’s “pivot to Asia” alerted Europe to the fact that a fundamental reshaping of transatlantic relations was in the offing. But the planned reset of America’s China policy never got off the ground. Then came Trump, who turned the pivot into a panic, promptly aborting key US initiatives in Asia. Immediately upon taking office, Trump committed one of the biggest foreign-policy follies of his presidency by terminating the Trans-Pacific Partnership (TPP). That agreement would have created the world’s largest trading zone, bringing together China’s most economically dynamic neighbors. Instead, China’s neighbors – including US allies like Australia, Japan, and South Korea – joined the new Regional Comprehensive Economic Partnership, which, unlike the TPP, includes China. And soon after the RCEP was agreed, Europe and China finalized an investment agreement in defiance of the incoming Biden administration’s stated wishes.

China made good use of Trump’s recklessness. But its strategic gains have been more a reflection of Western blunders than of its own attractiveness to other countries. The BRI, for example, was an aggressive geopolitical gambit from the start. But while the Trump administration routinely lambasted countries for signing on to the BRI, the lack of any US or Western alternative guaranteed that such criticism would ring hollow. It took the EU and Canada five years to conclude a free-trade agreement, so it is little wonder that there is no broader transatlantic strategy for offering development financing in Africa or Central Asia. Worse, Europe has even left it to China to develop fast rail service between Belgrade and Budapest. And now China is exploiting the scarcity of COVID-19 vaccines and other supplies to establish an even stronger foothold in many countries through its Health Silk Road initiative. Instead of meeting the challenge head on, Europeans have been busy pursuing their own forms of myopic “vaccine nationalism,” blocking exports of vaccines to Australia and feuding with the United Kingdom over supplies.

STRATEGIC PATIENCE WITH WESTERN CHARACTERISTICS — Although Chinese leaders recognize that China’s military is nowhere close to being able to compete with the US, President Xi Jinping is eager to close the gap. His government is investing massively in China’s war-making potential, and strengthening its capacity for specific objectives, such as a rapid and decisive victory in a conflict with Taiwan. China’s leaders seem to be wagering that the US will intervene only if it is certain that Taiwan will win. But this is a risky bet. All US presidents know that any breach of America’s security guarantee vis-à-vis Taiwan would fatally undermine confidence in all US security pledges and alliances, with far-reaching implications for America’s role in the world. These old US alliances are what China fears most, not only because they are a true force multiplier, but because China – like the Soviet Union before it – is essentially friendless in the world. Making matters worse, China is surrounded by rivals – at least four of which possess nuclear weapons – and it has severe trade conflicts not only with the US but also with Europe, Australia, and other countries that are actively trying to reduce their dependence on Chinese commercial ties. For all of these reasons, hobbling the US alliance system has become a core strategic goal for China.

Biden’s early successes in revitalizing old alliances and deepening new ties with rising powers like India indicate that the multiplier effect of America’s alliances is coming back into play. Despite all the drama over tariffs and sanctions, the Chinese strategists would have preferred more of Trump’s “bullying alone” strategy. While Trump’s policies did hurt China’s economy somewhat, they also promised to wreck America’s alliance system, and thus much of its global power. One advantage that China did have, until Xi’s rise, was strategic patience – a willingness to bide its time and choose the most favorable opportunity to assert its interests. Now that Xi has committed China to a less cautious and discriminating approach, the West should now seek to acquire the strategic patience that he abandoned.

STRENGTH IN ECONOMIC NUMBERS — The Biden administration seems to recognize that the West can create a sustainable balance with China only if the US regains its own national economic and technological strength. Among other things, that will require combating domestic inequality and the growing sense of racial and economic injustice among Americans. More specifically, US expenditures on international engagement – not least military spending – cannot be seen by Americans to come at the expense of domestic welfare. Squaring this circle will be difficult, but not impossible. And it is here that a more proactive Europe can demonstrate to American voters that international partnerships do indeed serve their interests. To become a more equal partner, however, Europe must “gain weight” economically and technologically. For its part, the US could help itself by extending fair trade offers to its allies in Europe and the Indo-Pacific, rather than punishing them with tariffs or sanctions for unrelated issues.

THE OLD-NEW MODEL ALLIANCE — For Europe, the upshot of the Sino-American confrontation is that the pivot to Asia won’t be reversed. From now on, the US will place far more value on its deepening Indo-Pacific alliances than on its traditional alliances with Europe. But Europeans should not feel threatened by this development. Biden and an overwhelming bipartisan majority in Congress remain committed to NATO, despite America’s growing military partnerships with India, Japan, South Korea, and Australia. Since the left wing of the Democratic Party would likely object to a return to the TPP, Biden will avoid that particular conflict. But the US is already forging a new form of strategic alliance that includes technology, trade, and military cooperation in Asia. We Europeans would do well not to see America’s shifting priorities as a rejection, but rather as part of the same global shift in power with which we must reckon, too. In doing so, we may find new ways to strengthen our own sovereignty that does not, however, mean insisting on European “autonomy.” Without reliable partnerships and alliances, even a Europe that has grown stronger and more independent will not have the power to keep the world in balance on its own. Ensuring resilience at home and stability globally are two sides of the same coin, and Europe must renew its alliances with the US and other democracies to do both. Striking this balance will be the political litmus test of Europe’s maturity in this century.

REINVENTING THE WEST — If the transatlantic alliance is going to provide a long-term check against China’s increasing weight, the US and Europe must not only coordinate; they also must confront the deficiencies of their model of capitalism. While confronted with the 2008 global financial crisis and its long tail of sharply rising inequality and economic precarity across rich democracies, now it is the COVID-19 crisis that has poured even more fuel on the fire, further widening the gap between rich and poor. The world’s wealthy democracies will either develop a socially inclusive form of global capitalism or lose in the competition with authoritarian regimes like China. The overarching objective of reinventing capitalism could become a powerful unifying theme among the “old” transatlantic allies and the newer Indo-Pacific partners. Should such a structure of peace arise, the EU would gain far more global influence without having to put any military boots on the ground.

Europe’s most important contribution to a collaborative global strategy would come from its experience in designing multilateral rules and norms. Here, the task is to create a clearly defined framework for managing the Sino-American rivalry within the broader globalization regime. The NATO-Russia Founding Act that has helped prevent a direct confrontation between Russia and the West since it was signed in 1997 may be replicated in the case of China. Other agreements with China can evolve over time, such as mutual renunciation of cyberattacks or unannounced large-scale military maneuvers. Measures such as these will create a more grounded structure of peace globally, despite the high level of bilateral tension between the US and China. And containing the risk of a military confrontation will open up the prospect of cooperation with China in other areas, not least climate change and pandemic prevention.

In the coming years, Europeans will be reminded repeatedly that the ongoing shift of power toward Asia means that we must finally grow up. We must take on more responsibility in our own neighborhood to ensure that the US will remain truly committed to our security. In this sense, the ideal EU foreign policy will be one focused on establishing European sovereignty. The time when we could outsource our foreign policy has come to an end. The next step is to build reliable partnerships and alliances through which to make our weight felt in the global balance. Sovereignty and close partnerships with other democracies are vital for Europe’s security. It must have both.

‘What Europe Must Do’ – Commentary by Sigmar Gabriel – Project Syndicate.

The Commentary can be downloaded here

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