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Europe's Role Between the US and China
Illustration via Die Weltwoche

Europe's Role Between the US and China

Bruno Maçães

We seem to be back where we started. The world is divided between two opposing blocs and Europe struggles to find a new role for itself. Its own integration efforts depend on finding an adequate definition for this role.

During the early years of the Cold War, the term “Third World” seemed reserved for Europe. Many considered that, after economic recovery, it was more or less inevitable that Europeans would want to affirm themselves as a third pole of global power together with the United States and the Soviet Union. It was a plausible idea. Europe had been able to recover from the destruction of the First World War and a similar recovery was expected after 1945. It would take one or two years for the consequences of the Second World War to be understood in their full extent. By 1947, economic collapse was all but certain and America rushed to create and implement the Marshall Plan in order to prevent it. Even then, however, few across the Atlantic wished to see a permanent U.S. suzerainty over Europe or entertained the idea that American voters would be willing to continue paying the costs of European security and supporting European economic recovery for much longer.

As it turned out, voters were won over to the concept of an Atlantic community under American leadership. Perhaps surprisingly, the collapse of the Soviet Union did not change that, at least not in the decades immediately following it. President George Bush quickly announced in 1991 that the United States would continue to be a European power, something fully confirmed during the Balkan and Kosovo wars.

It is only today, with Donald Trump, that the question has been reopened. On every issue affecting European interests, the president follows a singular theme: Europe is now prosperous and united, so what prevents it from taking care of its own affairs? Trump is not interested in the old vision of the United States as a European power. He wants Europe to pay for its own defense, while pushing for a renegotiation of the economic relationship on terms much more favorable to the U.S. If there was ever a justification to deal with Europe as a preferred partner, that justification is gone – or so Trump argues.

Europeans find themselves thrown into circumstances they have often dreamed about but for which they are not prepared. As Saint Augustine is said to have pleaded with the creator, make me virtuous but not quite yet. Europeans want to be left to their own devices and grow into a fully sovereign pole of global power. But perhaps not quite yet or, at least, not too quickly.

The problem is that the world in which they will be forced to fend for themselves is suddenly a much more dangerous one. Both Russia and China have grown in their eyes into strategic threats, made more acute by the very different ways in which they project their power.

Of Russia it is said that it is no more than a paper tiger. Its economy is dwarfed by those of France and Germany, let alone the combined force of the European Union. And this is an economy hampered by deep and almost permanent structural problems: low innovation, excessive reliance on energy and commodities, an overbearing bureaucracy. In other words, business as usual. These problems are not a Russian crisis. They are the Russian model. They have not prevented Russia from having considerable power over European affairs in past centuries, so the possibility that it could do so again in the future should not be dismissed.

China is a more serious case. This is a country that shows no evidence on converging with Western society on political and economic values, but whose ability to compete with the West seems undisputed. Whether the Chinese economy continues on the same path of fast growth or enters a period of economic malaise, few with knowledge of local realities will doubt its ability to master the sources of technological growth. It is precisely on this question that contemporary China has issued a serious challenge to liberal ideas. If China is able to demonstrate that Western society is not the only model capable of developing and controlling the key technologies of the future, global political competition will take place between different models and historical development will no longer follow a predetermined path. Already many voices coming from European industry – particularly in Germany – warn about a world where Chinese companies will come to dominate key new technologies where Europe once had a first-mover advantage and on which its future prosperity no doubt depends. Robotics, artificial intelligence, autonomous electric vehicles. These are but a few examples.

The latest case is that of China’s commercial aviation industry. Over the next two decades, Boeing estimates that China will need 7,690 new planes, valued at $1.2 trillion. This is a huge opportunity for its domestic industry and Beijing has marked aerospace and aviation equipment as one of ten strategic industries targeted in its Made in China 2025 initiative. Industry experts estimate that it will take China 10 years to be able to compete with Boeing and Airbus.

Control over the key technologies of the future is not without consequences in military affairs. This is yet another reason Europeans are steadily growing more concerned about China, a country that seems capable of combining military power with economic dynamism in a way that always evaded the Soviet Union and continues to evade contemporary Russia. At the same time, the threat, which is doubtless real, should be placed in context. Neither Russia nor China seem capable of immediately threatening core European security interests. What they increasingly have the ability to do is divide the European Union, in the process erecting new obstacles in the way of addressing those fundamental challenges which continue to erode the sources of European power. We see evidence of that every day.

The nightmare scenario is one where the technological gap relative to the United States and China continues to grow, European companies largely miss the fourth technological revolution and global value chains are redesigned in such a way as to increasingly exclude Europe from the new geographies of growth, predominantly in the littoral arc all the way from Mumbai to Jakarta and north to the Pearl River Delta.

The threat from China and its grand political and economic ambitions are so acutely felt that many European officials now openly bemoan that a united front combining Europe and America has not been established. But this is not a coincidence. The United States is retreating from Europe because it believes the economic center of the world now lies elsewhere and it is adopting a less liberal policy towards the European Union because it feels it can no longer afford to share its power and resources now that they must be held in reserve for the coming confrontation with Beijing.

Europe is not prepared. One could say that in two different senses. First, at the level of policy, it seems clear that the European Union was caught off guard by the early manifestations of a new world order – one where the United States is less committed to promoting liberal values and competition across Eurasia gains intensity. It was only last month, for example, that we saw the initial attempt to design a new chessboard of alliances. Meeting the Japanese Prime Minister in Brussels, outgoing European Commission President Jean-Claude Juncker announced a new agreement on global infrastructure and singled out Japan as a privileged partner in the project to build a global order based on strong normative standards, multilateral institutions and a system of rules. The move had the almost explicit and declared intention to rival the major Chinese geopolitical initiative, the Belt and Road Initiative, but will have to be expanded in all sorts of ways – geographically, functionally, and financially – if it hopes to have the necessary range and impact.

Many new policy instruments are quickly being developed. Over the last two years the EU approved new legislation aimed at revamping the panoply of trade instruments to defend the European market against unfair trade practices. It has approved new legislation aimed at screening foreign investment and stopping it when foreign interests can endanger the security of the union and its member states. Over the next year or two we can expect similar developments in two other areas: public procurement and competition law. The former is an old European grievance against Chinese protectionism. The latter is a priority for incoming president Ursula von der Leyen, who believes European companies must be allowed to grow into genuine global actors.

There is a second and deeper sense in which Europe was caught unprepared. We have to ask whether Europe is prepared at the constitutional level for the coming challenges. Does it have a common voice? Does it benefit from decision mechanisms capable of aggregating different national interests? Does it have an executive capable of reacting quickly to unforeseen developments? Can it resist attempts by foreign powers to sow internal divisions?

For seventy years Europeans have been trying to build a genuine political union between their divided nations. It remained a promise and perhaps the reason is that the most basic ingredient of political unity was lacking: the fear that brings people together to face an external threat.

The United States played a critical and often overlooked role. By extending an unconditional security guarantee to its allies, it ensured that the Soviet Union would never become an existential threat to Europe. At the same time, American society and politics were too similar for Europeans to feel genuinely threatened by the extent of American power. The geopolitical limbo was comfortable enough and Europe took a long holiday from history. A political union was postponed more or less indefinitely.

It can be postponed no longer. In a world of giants, the European Union needs to develop a common foreign policy. The union must grow into a confederation.

Read in Die Weltwoche

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