Who is holding back and who is accelerating on EU anti-China policies
Facts, objectives and divisions between European states in the new European strategy on economic security designed to loosen ties with China
According to a revelation by Politico , Ursula von der Leyen will present the new European strategy on economic security designed to loosen ties with China and reduce the related risks on June 20, ready to be discussed and approved at the next EU Council. Here are some anticipations and doubts nourished by more than a few chancellery and by pieces of the Commission itself.
Europe between two fires.
Europe finds itself in the uncomfortable position of wanting on the one hand to continue doing business with China and on the other to aspire, as indicated by the US, to limit the risks of its strategic dependence.
Interpreting the security needs of the Union as well as those who are pushing for a progressive emancipation from the Dragon, the President of the Commission has for some time been denouncing what appears in her eyes as "an unbalanced economic relationship", pressing for the introduction of measures which make it possible to reduce risks arising from the Chinese embrace.
De-risking has thus become the keyword of a new vision of the Union which shuns the temptation to carry out a total "decoupling" from the Chinese economy, as invoked by the US, but at the same time aims to reform an economic relationship which has generated an enormous trade deficit and tied Europe hand and foot to the production chains of the East and its technological giants.
In practice, von der Leyen's ambition is to see Europe behave in matters of trade and investment more like countries such as the USA and Japan than like the old Brussels which closed not one but two eyes to the problems generated by relations with superpower number 2.
The new EU strategy that von der Leyen is about to reveal reflects these concerns and represents, in the words of a senior representative of the EU institutions interviewed by Politico, "an enormous change in EU policy … suggested by friends beyond of the Atlantic.
Doubts and fears.
But the road to Ursula's new plan appears to be an uphill one, considering that first of all we need to convince those member countries that espouse a liberal-style position and are suspicious of moves with a protectionist flavour. As Politico puts it, “the free traders of the Union, both within the Commission and among the EU countries, are getting nervous”.
"Everyone is watching what is happening very carefully," comments a European diplomat covered by anonymity. “I hope,” the cocked hat adds, “that von der Leyen is aware of the different red lines.”
Those who threaten to block the way for radical measures that push more in the direction of decoupling than risk reduction can be found, among other things, precisely within the Commission itself. We are talking about Trade Commissioner Valdis Dombrovskis and Competition Commissioner Margrethe Vestager, who, notes Politico, "are admonishing not to go too far".
As Dombrovskis himself explained last week, the new EU strategy should be "targeted and focused". Brussels in other words "should not use the issue of economic security as an excuse for protectionism", is the Commissioner's warning,
Facts first.
As Tobias Gehrke, analyst at the European Council on Foreign Relations observes, the challenge for Ursula is now to "prevail in these ideal debates on free trade against protectionism" and to enucleate a strategy based on "a clear and factual analysis of the variety of the economic security risks with which the EU measures itself”.
In a nutshell, we must avoid proceeding "without knowing what we are talking about", to quote another European diplomat.
If it is therefore to be pragmatic, and not make a clean slate of relations with China, the new European plan will first of all have to pay attention to the delicate issue of European investments in China. The guiding idea in this regard should follow the American one of blocking the transfer of technologies to the military sphere only, thus continuing to carry out exchanges with Beijing without thereby strengthening its war machine.
Therefore, if Ursula wants to introduce a screening system for outbound investments, it will necessarily be necessary to intervene in a "selective" way by introducing bans or bans only for those investments that involve the risk of strengthening the capabilities of the People's Liberation Army.
It is only by proceeding in this way, specifies another diplomat from a liberal-oriented country, that Ursula will be able to neutralize the counter-arguments of those who think that the goal is to "raise barriers that are not economically justified".
The front of the rioters.
Among those who will have to be convinced with a robust dose of factual elements and without too much rhetoric is Dutch Trade Minister Liesje Schreinemacher, who expressed all her perplexities at a meeting of her European counterparts held last month. “What exactly is the purpose? And what are the right tools to achieve it?, asked the minister, who promised to go both ways with Ursula's plan.
In the list of subjects on which a strong dose of persuasion will have to be exercised there are also the industrialists, traditionally hostile to measures that could have repercussions on the flourishing interchange with China.
“We must be very careful” , BusinessEurope representative Luisa Santos told Politico for example, not to go too far with measures that “could be detrimental to our future economic prosperity”.
The challenge of VDL the American.
It is with this large front of rioters that von der Leyen will have to measure himself before and above all after 20 June, when, in the Council, they will make their voices heard without aloud.
The challenge faced by the American Ursula is to convince everyone in Europe that the US is not wrong when it aims to limit the Chinese risk and that the Old Continent can also follow this path without damaging its most important commercial relationship.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/mondo/chi-frena-e-chi-accelera-sulle-politiche-ue-anti-cina/ on Sat, 10 Jun 2023 07:54:51 +0000.