Transatlantic engagement with the Indo-Pacific gathered momentum with the 2022 European Indo-Pacific summits, EU–US and UK–US high-level dialogues on the Indo-Pacific and the G7 summit – as well as the latest NATO summit, at which Indo-Pacific leaders were in attendance.
Existing forums, groupings and institutions such as these offer spaces in which to share information and discuss opportunities – both among the transatlantic partners and with partners in the Indo-Pacific. There are calls on both sides of the Atlantic for links to be found between these existing channels rather than their work being duplicated via new entities.
One challenge for transatlantic cooperation will be to create a more systematic and streamlined network for sharing information on Indo-Pacific activities. But the crossover between security and economics complicates such efforts, due to the range of government departments involved (and associated bureaucratic complexity).
Defence- and security-focused platforms
Both the ‘Five Eyes’ intelligence-sharing relationship between Australia, Canada, New Zealand, the UK and the US and AUKUS are primarily focused on security. These initiatives could however form the foundation for deeper cooperation between the countries involved. The Quad agreement is also security-focused, but the four partners already cooperate on other areas related to climate, critical and emerging technologies, cybersecurity, global health, infrastructure development and space exploration.
In 2021, the US also held ministerial-level discussions about regional and global challenges to NATO with what US defense secretary Lloyd Austin termed the ‘Euro Quad’ (France, Germany, the UK and the US).
NATO can and likely will play an increased role in determining how challenges emanating from the Indo-Pacific region will impact security in the Euro-Atlantic region. While the organization has for the first time, in its 2022 Strategic Concept, mentioned China as a ‘challenge’, and has invited its existing four Asia-Pacific (now Indo-Pacific) partners to the Madrid summit, there is a clear understanding that NATO will not formally extend its area of operations to the Indo-Pacific. Indeed, allies reaffirmed the limits on NATO’s mandate – with most European members particularly wary of turning the alliance into a tool of broader US goals in that region. The alliance will deepen its partnership with the four Indo-Pacific partners by sharing information, developing shared defence standards (on climate, cybersecurity and technology, among others) and exploring challenges to national resilience and security in the ‘grey zone’ (i.e. activities that fall below the threshold of armed conflict). Another point of focus in collaboration with like-minded partners in Asia is the need to uphold international law and the rules-based international order, while also monitoring China–Russia relations.
NATO will therefore facilitate discussions on challenges emanating from the Indo-Pacific and from China, and how those challenges impact security in the Euro-Atlantic region. It will not act as a forum for broader coordination of transatlantic policy on the Indo-Pacific.
The transatlantic partners should not underestimate the importance and impact of coordinated action on defence and security through joint diplomatic statements, joint submissions to UNCLOS and similar bodies and initiatives such as coordinated sanctions. Diplomatic and economic signalling is vital in showing solidarity, even if military options for engagement are comparatively limited. Precedents have been set: for example, the E3 (France, Germany and the UK) have coordinated on joint statements and submissions to the UN regarding the South China Sea. Other examples include G7 statements on the situation in the Taiwan Strait, as well as coordinated responses to, and sanctions against, China for human rights abuses in Xinjiang and increasing authoritarianism in Hong Kong. Given the sensitivity in Europe around military engagement with the UK or the US, for fear of being seen as provoking China (hence also the careful balance in NATO’s new China mandate), united shows of support for the rules-based international order and the cause of human rights provide important political signals in the Indo-Pacific.
Economic assistance to the Pacific Islands can contribute significantly to overall security there and provide alternatives to China’s own proposals. The PBP initiative – launched in June 2022 by Australia, Japan, New Zealand, the UK and the US – aims to improve cooperation in the Pacific Islands and seeks to tackle a range of issues from climate change to illegal fishing. The Minerals Security Partnership – another June 2022 initiative – aims to build ‘robust, responsible critical mineral supply chains’. Australia, Canada, Finland, France, Germany, Japan, South Korea, Sweden, the UK, the US and the European Commission were its founding signatories.
At its 2022 summit meeting, the G7 announced PGII – a relaunch and rebrand of the previous year’s Build Back Better World infrastructure initiative. PGII promises up to $600 billion of global infrastructure investment as a form of belated response to China’s Belt and Road Initiative, although questions remain as to how much ‘new’ money is involved. By its nature, the G7 has significantly less Indo-Pacific representation than the G20, and its initiatives are intended to be global in scope. This can be in part mitigated through supplementary invitations to like-minded countries: in 2022, for example, India and Indonesia were among those present at the annual G7 summit.
Platforms for economic engagement
While bilateral engagement continues to play an important role, platforms for economic cooperation within and with the Indo-Pacific have proliferated in the past five years.
Within the Indo-Pacific, two new trade agreements continue the process of trade liberalization without EU or US involvement. The first is the Regional Comprehensive Economic Partnership (RCEP), signed in 2020 and which counts China among its 15 members. The other is the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), signed in 2018 and which has 11 members. China has submitted an application to join CPTPP, as it has with the Digital Economy Partnership Agreement (DEPA) signed in 2020 between Chile, New Zealand and Singapore.
The UK is the first European country to apply for membership of CPTPP. Post-Brexit, the UK is keen both to improve access to non-EU growth markets and to send signals on its commitment to global involvement. The EU currently remains focused on bilateral FTA negotiations.
The domestic political environment in the US currently precludes participation in new trade agreements. Instead, the US has announced its intent to shape agreements on non-tariff trade questions and standards through IPEF. IPEF was launched in May 2022 and currently includes 13 regional partners: Australia, Brunei, Fiji, India, Indonesia, Japan, Malaysia, New Zealand, the Philippines, Singapore, South Korea, Thailand and Vietnam. It envisages a range of agreements under four ‘pillars’: (i) trade (including the digital economy, labour and environmental standards); (ii) supply chains (focusing on mapping and diversification of critical supply chains); (iii) the ‘clean economy’ (covering decarbonization, energy efficiency and renewable energy); and (iv) the ‘fair economy’ (combatting corruption and curbing tax evasion). 12 of the partners have joined all four pillars; India has opted out of the trade pillar. The US is, however, unwilling to offer improved market access to IPEF countries as an incentive to make further commitments.
In the critical area of semiconductors, in March 2022 the US proposed the so-called ‘Chip 4 alliance’ – to include Japan, South Korea and Taiwan – with the aim of enhancing cooperation between those countries to counter China’s ambitions in the sector. Rather than use the term ‘alliance’, South Korea has characterized the Chip 4 as a ‘supply chain consultative body’ in an attempt to deflect Chinese opposition.
Increasing geopolitical differences among the members of the G20 following Russia’s war on Ukraine have given the G7 renewed importance as a forum for cooperation among leading democracies.
The EU and US engage each other through various other structures. The renewal in 2021 of the EU–US–Japan trilateral partnership, for example, signals an effort to take a common approach to shared concerns on China’s trading behaviours at a global level. The EU–US TTC aims to foster cooperation on trade and technology and could address issues related to the Indo-Pacific, such as digital governance or supply-chain resilience. In practice, however, an extensive agenda of other bilateral EU–US matters needs to be resolved first before any shift in focus. Examples include recent transatlantic tensions concerning US tax credits for electric vehicles favouring North American-based manufacturers, a potential subsidies race for semiconductors between the US and EU and US export controls for semiconductor technology to Chinese chipmakers that could restrict EU firms’ business relations with China.
Increasing geopolitical differences among the members of the G20 following Russia’s war on Ukraine have given the G7 renewed importance as a forum for cooperation among leading democracies. For the UK in particular, the G7 provides a ready-made platform to engage with key EU member states and the US (as well as Canada and Japan). With Japan taking over the G7 presidency in 2023, cooperation between the G7 and non-members in the Indo-Pacific could gain further traction – especially in the areas of digital trade and supply-chain resilience.
