On EU-US-China Dynamics: Who Plays What Game?

Written by | Wednesday, July 19th, 2017

G20 summits are successful when leaders align on a single and clear message just like in 2009 when they united around the global financial crisis. In contrast, they fail when they cannot find a unified voice on the contemporary issues. This year’s summit was set up in a triangle of the United States’ Donald Trump, China’s Xi Jinping and Germany’s Angela Merkel. Just like expected, Donald Trump was left alone and defeated, while Xi Jinping emerged as a newly born progressive and climate-conscious internationalist. Angela Merkel retained its position of a clear-sighted umpire who will supervise the defeat of Donald Trump. However, this scenario draws on Western views and perspective and in reality ignores other major players – most importantly China itself but also Japan.

For China, relations with both Germany and the United States are of major importance. China-Germany relations are currently very strong especially after both sides have joined their forces to chastise Donald Trump over his environmental policy and protectionism. However, Berlin has also spoken on two major issues: Beijing’s treatment of dissident and Nobel Prize winner Liu Xiaobo who has recently passed away while in detention and also China’s condescending attitude to Europe. Moreover, French President Emmanuel Macron has been proposing a way of investment screening against threats to national security and intellectual property that is silently supported also by Chancellor Merkel – both new measures clearly target China.

During the EU-China summit at the beginning of June, the Chinese negotiators seemed to have been leaning towards a compromise on the issue of investment and the market economy status for China within the World Trade Organization. While China seemed ready to concede to an EU-China investment agreement that would include more access for European companies, it changed its mind abruptly during the summit and the Chinese concessions were withdrawn without any clarification.

According to some commentators, Europe’s role as a balancing power between the United States and China is not what it seems to be simply because China is refusing to play that game. Chinese leaders are readily reaping the public diplomacy benefits of Western dissensions with Europe teaming up with China to emphasize Donald Trump’s poor manners. Yet, China will always put outcomes first especially to keep international trade free. The United States is, in contrast, losing its public diplomacy game with Europe and in international negotiations due to President Trump’s unpredictability and lack of a coherent design.

The US-China-Europe triangle is additionally being shaped by the EU-Japan dynamics. With Japan finally finalizing a giant free trade agreement with the EU, creating the world’s largest free trade area, the Europeans and Japanese are in fact sending a concrete signal to both US and Chinese leadership that protectionism will not prevent other free market economies from moving ahead on the trade agenda.

‘Hamburg G 20: A Test for the China-EU-US Triangle’ – Commentary by François Godement – European Council on Foreign Relations (ECFR).

(The Commentary can be downloaded here)

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