Author: Ben Johnstone, ANU
The European Union (EU) has recently shown increased interest in the Indo-Pacific. From new bilateral partnerships to a new Indo-Pacific Strategy, the region is finally receiving Brussel’s attention. China’s challenge to the global order through projects like the Belt and Road Initiative (BRI) has caused alarm among European leaders and the recently re-emerged Quadrilateral Security Dialogue (Quad) must seize opportunities to work with Europe if it is to maintain the existing rules-based order.
If it were to gain control of the South China Sea’s maritime trade routes, China’s leverage over the EU would be significant. Six of the EU’s top ten trading partners are Indo-Pacific states, with the region seeing most of Europe’s trade and energy resources shipped through it. The People’s Liberation Army Navy’s plan to field 400 vessels by 2025 makes this a threat Europe can’t afford to ignore.
It’s not just China’s navy Europe needs to be concerned about. China’s influence throughout the Indo-Pacific is growing. The Lowy Institute estimates that China provided $1.7 billion USD in funding to infrastructure projects across the Pacific alone between 2006 and 2016. Over 75% of these loans were concessional grants, giving China considerable leverage over the region.
For example, concessional loans were the basis for the $6 billion USD Sri Lanka has received from China. China now has a 70% stake in the Sri Lankan port of Hambantota as part of its compensation. Given that Indo-Pacific states are becoming increasingly indebted to China, it is conceivable that China may begin establishing facilities throughout the region to project its power beyond the East and South China Seas.
This isn’t just isolated to the Indo-Pacific. 18 European states have joined China’s BRI, and China’s 17+1 April 2019 Summit has caused EU policy analysts to question whether China is seeking to undermine EU unity. China may well be on its way to ‘debt-trapping’ European states as it has done with Sri Lanka.
Australia, India, Japan and the US face similar threats from China. The Quad’s primary goal of maintaining a ‘free and open’ Indo-Pacific by promoting areas of free trade, regional institutions, regional development and state sovereignty means that the EU and Quad have an array of aligned interests.
Some steps have been taken towards deepening cooperation. The bilateral ‘Connectivity Partnerships’ between the EU and Japan, the EU and India, and the bilateral EU-Australia Joint Committee are all examples of Quad members making commitments with the EU towards regional, sustainable development in the Indo-Pacific. But June’s US-EU Summit Statement only mentions the Indo-Pacific once and focuses mostly on promoting a ‘Joint Transatlantic Agenda’, and the previously mentioned ‘Connectivity Partnerships’ do ‘not intend to create any legally binding rights or obligations’. How can the EU and the Quad effectively coordinate bilateral arrangements if they differ in objectives and degrees of commitment?
Fortunately, it seems that the international setting is ripe for multilateral collaboration. The Quad’s members are growing increasingly close. Australia has turned towards India for deeper economic partnership and has received American and Japanese support in its trade war with China. India and Japan have been collaborating on the Asia-Africa Growth Corridor since 2017 and US support for multilateralism has re-emerged under the Biden administration. Combine this with the EU’s recently published Prospects for EU-Asia Connectivity, which promotes the sustainable development of the Indo-Pacific, and it seems that the solution is obvious. An overarching multilateral arrangement could overlay the EU’s array of bilateral partnerships with Quad members.
Such collaboration would provide Indo-Pacific states with a viable alternative to the BRI through the EU Connectivity Strategy. An EU–Quad collaboration would have two considerable advantages over the BRI. First, it would more easily gain the trust of Indo-Pacific states. According to the ASEAN Studies Centre, the EU is the second most trusted major power for South-East Asian states, second only to Japan. China ranks fifth behind the US and India. This trust is the product of the EU and Japan’s commitment to action on climate change and sustainable development – something that will also resonate with Pacific Island states. Such trust will contrast significantly against regional perceptions that China’s BRI lacks focus on sustainability and may debt-trap participants.
The collaboration would also be able to take advantage of the Quad’s pre-existent development strategies and frameworks in the region. Australia’s Step Up in the Pacific has allocated $25 million to develop regional infrastructure. The US pledged has $60 billion for Indo-Pacific partnerships, and the Asia-Africa Growth corridor has allowed India and Japan to develop networks with seventeen states. EU investment can be concentrated through these pre-existent networks, whereas China’s BRI requires both the development of these networks and a concentration of the burden on China. This framework could also be an alternate source of investment to the BRI for those European states looking for assistance, if modelled similarly to the EU-Japan connectivity strategy.
Europe has realised it can’t ignore the Indo-Pacific, and Quad leaders seem to be realising they can’t ignore Europe. The foundations are being laid but China isn’t going to wait. If ‘connectivity’ is going to happen it must happen soon.
Ben Johnstone is a student at the Australian National University completing a Bachelor of Philosophy.