It is becoming increasingly difficult to separate defence/security and economic issues, as economic statecraft is a fundamental tool of geopolitical competition between states. The EU, European states and the US have clearly understood these blurred lines, but differences remain over how to prioritize and approach these issues.
Across Europe and the US, the topic of security usually relates to ‘hard’ power – covering air, land and sea defence, as well as increasingly cyber and space defence, and nuclear non-proliferation. However, the strategic importance of trade to national security now goes beyond the protection of maritime shipping lanes, for example, to encompass discussions around national resilience – including, among others, industrial policy, supply-chain diversification, the protection of advanced technology and innovation, and the role of infrastructure investment. It may also include policy areas like climate change, food security and global health. These are all topics on which European states, and the EU, can provide added value for Indo-Pacific partners seeking to avoid choosing sides between China and the US.
European and US efforts to uphold the principles of the rules-based international order, safeguard the equal rights of nations and promote sustainability are driven by both interests and values. Human rights are one potential area for transatlantic cooperation in the Indo-Pacific, particularly concerns over Chinese human rights abuses against the Uyghur population in Xinjiang, as documented by the UN High Commissioner on Human Rights in August 2022. Both human rights and labour market standards feature in the trade and investment agendas of the EU, the UK and the US. However, individual EU member states keen to strengthen other bilateral relationships in the region have previously sidelined human rights issues in discussions and left the EU to raise specific concerns. Although transatlantic ties with democracies in the Indo-Pacific are deeper than those with more authoritarian regimes, limiting engagement to like-minded countries would severely reduce the scope for cooperation in and with the region.
Environmental aspects (and initiatives related to decarbonization and clean energy) also form part of transatlantic efforts towards cooperation on the Indo-Pacific. On climate change in particular, European states are actively engaging in adaptation and mitigation projects in the Indo-Pacific, as well as humanitarian assistance and disaster relief. These objectives are included in EU infrastructure initiatives like Global Gateway and the G7’s Partnership for Global Infrastructure and Investment (PGII). The UK, the US and several EU member states are involved in the Indian-led Coalition for Disaster Resilient Infrastructure, while the US continues to engage on climate change issues both bilaterally and via the Quad.
Supporting the economic development of lower-income nations in the region is another priority for the transatlantic partners, not least via the G7’s PGII or the recent Partners in the Blue Pacific (PBP) initiative. It is hoped that such initiatives can contribute to prosperity and sustainability in the Indo-Pacific and serve as a bulwark against China’s increasing security engagement in, for example, the Pacific Islands.
Defence- and security-related objectives
For the EU and individual European states, Euro-Atlantic security and the security of their neighbourhood takes primacy. They have long been aware of the limited capabilities of their armed forces to project power outside of their immediate neighbourhood. Many European actors therefore prefer to focus their contribution to Indo-Pacific security on ‘softer’ issues, as outlined in the EU’s own strategy. These softer issues include capacity-building in maritime domain-awareness, law enforcement and training related to the UN Convention on the Law of the Sea (UNCLOS), and countering maritime threats like illegal, unreported and unregulated (IUU) fishing, but also capacity-building on cybersecurity. The EU already conducts an extensive range of activities in this area, such as the Critical Maritime Route Wider Indian Ocean project in the Western Indian Ocean – currently being extended eastward to South and Southeast Asia – as well as a counter-IUU-fishing initiative that limits fisheries exports to the EU based on the efforts of partner countries to improve regulation of their fishing industry and tackle overfishing.
While nuclear non-proliferation is a significant objective in European approaches to the Indo-Pacific, many European states divide responsibility for the topic thematically across multiple government departments and regard non-proliferation as being best managed via the UN.
From a defence perspective, countries such as Germany and the Netherlands may send routine naval or air force missions to the region every few years at best. Germany is currently in the process of drafting its first national security strategy, while earlier in 2022, Chancellor Olaf Scholz promised to invest €100 billion in 2022 to modernize Germany’s military and to boost annual defence spending above 2 per cent of GDP thereafter.
Both France and the UK have sought to expand their defence relationships with countries in the Indo-Pacific – notably India and Japan.
France and the UK are notable outliers in Europe, in terms of their defence capabilities and existing presence in the Indo-Pacific. France maintains a permanent military presence in its overseas territories in the Western Indian Ocean and South Pacific, and undertakes routine military and naval deployments in the region. The UK’s presence is smaller than that of France but is also significant. It maintains military bases and facilities in East Africa, the Gulf and Southeast Asia; participates in the Five Power Defence Arrangements (FPDA) that include Australia, Malaysia, New Zealand and Singapore and the trilateral AUKUS defence partnership with Australia and the US; permanently deploys two offshore patrol vessels in the region; and has signed a reciprocal access agreement with Japan. Moreover, political will exists in the UK to develop this presence further, as indicated by the ‘Indo-Pacific tilt’ mentioned in the 2021 Integrated Review. Both France and the UK have also sought to expand their defence relationships with countries in the Indo-Pacific – notably India and Japan.
Questions around whether France and the UK could serve as ‘framework nations’ for other European countries to become involved will largely be determined by China’s actions, by the US approach and by French and British willingness to provide leadership. If China is seen as a more cooperative partner, then European countries may be less inclined to align closely in practice with the US through, for example, joint deployments or carrier task groups. This ambivalence over China extends to European countries’ willingness to join the UK in further deployments in the Indo-Pacific, despite the successful UK-led carrier strike group in 2021, in which both the Netherlands and the US participated.
Some European governments perceive the UK’s close relationship with the US as leading towards a confrontational stance with China. The announcement of the AUKUS defence technology and nuclear submarine partnership between Australia, the UK and the US has only reinforced this perception. It also led to tensions between France and the UK following the abrupt cancellation of Australia’s previous submarine deal with France. Although on-the-ground cooperation has resumed, it seems unlikely that existing agreements between London and Paris, such as the Lancaster House Treaties or the Combined Joint Expeditionary Force, will develop into extensive formal defence cooperation in the Indo-Pacific.
Balancing cooperation against competition for trade and investment
Economic opportunities are an important part of transatlantic engagement in the Indo-Pacific. Not least as the Indo-Pacific is the largest and fastest-growing region of the world, and contains the world’s second-, third-, sixth- and 10th-largest economies (China, Japan, India and South Korea respectively). More than anything else, the EU, its key member states, the UK and the US are keen to secure increased export earnings and investment opportunities for their own economies.
The transatlantic partners do, however, seek to balance competition with cooperation on shared concerns – especially the risk of economic dependency arising from China’s leading role in trade and technology, and its use of coercive diplomacy against countries in both the Indo-Pacific (e.g. Australia and South Korea) and Europe (e.g. Lithuania). These concerns – together with the disruption caused by China’s zero-COVID-19 policy and associated lockdowns – have brought questions of supply-chain resilience to the fore. In practical terms, this means diversifying sources of supply, reducing reliance on China for essential raw materials and countering Chinese technology threats.
There is also a recognition of the scope to liberalize trade further within Asia, and of the need to update trade agreements to take account of the digital economy and enable cross-border data flows. China is taking steps to shape norms and standards in these areas, which has in part prompted the US to launch IPEF with the ambition of securing agreement within the Indo-Pacific on non-tariff trade issues and standards – especially relating to the digital and green economies. Other issues include export controls and investment screening to limit Chinese access to Western technological capabilities, as well as anti-corruption and taxation measures.
