By Rosa Balfour
The following commentary is part of a series – “Agenda 2021: A Blueprint for U.S.-Europe-India Cooperation” – co-produced with the German Marshall Fund as part of the India Trilateral Forum initiative
December 2020 was a busy month for EU decision-makers. Following the presidential election, they put together a set of proposals to relaunch the transatlantic relationship after four devastating years. They secured at the eleventh hour an agreement with the United Kingdom on relations after Brexit that minimized the damage for the EU and protected its core interests. At the same time, unexpectedly and opaquely, they closed a six-year long negotiation with China by reaching a Comprehensive Agreement on Investments (CAI).
These three events are telling of the EU’s future direction. There are no doubts as to the EU being part of the transatlantic realm, but the Brexit experience and questions around the European integration project have led to a reflection on what its core interests are. The coronavirus pandemic and its economic impact only reaffirmed this. Divided on many matters, European countries from the Atlantic to the Black Sea converge around the defense of the Single Market as the prime source of growth for the continent. Defending it through the Brexit deal and seeking international opportunities to enhance growth through the CAI confirm a turn toward geoeconomics as a form of EU engagement with the world. EU-U.S. relations after the Trump era will be affected by the ways in which the EU will sharpen its competitive edge.
With President Joe Biden having repeatedly underlined the importance of rebuilding relations with allies, there is much scope for cooperation on a broad and significant agenda. The EU has proposed global health and post-pandemic recovery, climate, and technology as three areas in which the added value of cooperation would be most impactful. Through a proposed EU-U.S. summit as well as the scheduled meetings of the G7, G20, and UN climate conference during 2021, health and climate could see some quick achievements that can put the transatlantic relationship on a different plane by comparison to the past four years.
These wins could also have positive ripple effects on the international system by promoting some reform in global institutions and undoing some of the many hurdles that have accumulated in past years in the World Trade Organization, the World Health Organization, and the Organization for Economic Co-operation and Development as well as bilateral trade disputes. For instance, a new consensus could emerge and trade spats, such as around Boeing and Airbus, and other irritants could be solved; the return of the United States to the World Health Organization gives new hope to global cooperation on dealing with the pandemic. The EU also stands committed to participating in Joe Biden’s proposed Summit for Democracy.
Rebuilding the broken trust between the two sides of the Atlantic through these achievable initiatives will be critical to start conversations on harder issues such as geopolitics, China, security, and emerging cross-boundary challenges. Even on technology, where they are closer to each other in supporting an open and rights-based approach prioritizing the well-being of citizens, as opposed to China’s techno-surveillance authoritarian model, there remain wide differences between the EU’s regulatory approach versus the United States’ entrepreneurial governance of technology driven by the private sector.
It comes as no surprise that the EU proposes to institutionalize the dialogue with the United States on all matters related to technology—taxation, trade, innovation, regulation, cybersecurity, artificial intelligence, privacy, and data flows—through special task forces and platforms. The field is broad, already mined by irritants, and the EU and United States have different starting points—the former as a more advanced and regulated digital market but with little competitive edge on technological innovation; the latter where technological innovation has been driven by incentives financed with venture capital and startups that became technology giants. Another consistent feature of the United States’ technological leadership is the role of military needs in pushing innovation. Seeking compromises and trade-offs to support a common position, especially vis-à-vis the technological and normative challenges posed by China’s rise, will be a hard but necessary area for EU-U.S. cooperation.
How to deal with China’s rise is widely acknowledged as the most challenging area for EU-U.S. relations. While in 2019 the EU came closer to the U.S. view of China as a “systemic rival,” the CAI suggests that the belief that China’s rise can be reined in through greater commercial interdependence, by facilitating access in each other’s markets, lingers on in the minds of European decision-makers, especially in Germany, which most pushed to reach the agreement. The deal has already raised eyebrows among Biden’s advisers and will also face opposition within the EU on several counts, given the divergent positions of member states on China, human rights, and the primacy of the transatlantic relationship. The China dossier, in light of U.S.-China competition and the breadth of the agenda—from climate to human rights, trade, technology, Asian security, global health, and geopolitical competition in the Global South—will be fraught with conflict, making it hard to see EU-U.S. alignment.
The CAI also raises contradictions in the EU’s declared ambition to be more geopolitical. Its implicit message is that the EU is investing in its “strategic autonomy.” Yet on security matters it remains highly dependent on NATO and U.S. commitments. And in dealing with the geopolitics of its neighborhood—from Mali to the East Mediterranean, from Syria to Belarus—the EU has been bereft of unity, strategy, and political commitment. Even through enlargement to the Western Balkans, Brussels been unable to counter the fragmenting trends in the regions surrounding the EU. Without U.S. engagement, the EU and its member states have proved unable or unwilling to address the geopolitics close to home.
While leveraging its economic strengths is an asset in building up the EU’s international role, the bid for strategic autonomy through economic tools thus rings hollow, especially if justified by a decoupling of economics and politics. Also, it is questionable whether the EU can move in that direction without the United States. While the transatlantic relationship and a stronger European autonomy on the international scene are by no means incompatible, driving a wedge with one’s closest ally may not be the wisest diplomatic move.
The debate between transatlanticism and strategic autonomy is likely to play out most emphatically with respect to China but will also impact how the United States and the EU engage with partners around the world. The EU has long sought to diversify its global partnerships and has been working to establish firmer ties in Asia—for instance with ASEAN—and with Africa, with recent proposals for a comprehensive strategy with Africa to prepare for the EU-Africa Summit later this year. Biden too has announced commitments to allies and finding new ways to engage, such as through the Summit for Democracy, and will seek to build upon U.S. engagement with Asia.
The EU and the United States are seeking to redefine their respective partnerships outside the transatlantic framework while pledging cooperation when it comes to global health and supporting worldwide economic recovery, to fending off geopolitical rivalries with other actors keen to assert their presence in the developing world, and to engaging with a network of other partnerships around the world. In this complex landscape of multiple and overlapping arrangements between countries, which vary according to issues, interests, and geographies, the key question will be the degree to which the EU, the United States, and other partners will be able to forge an alliance to reform international governance to meet such complexity and manage future turbulence. For the EU, the ultimate goal is to support multilateralism; for the United States, the end goal may not be the same.
Rosa Balfour is director of Carnegie Europe. Her fields of expertise include European politics, institutions, and foreign and security policy. Her current research focuses on the relationship between domestic politics and Europe’s global role.