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Challenges of a Multipolar World: The United States, India, and the European Union in the Asia-Pacific

Challenges of a Multipolar World: The United States, India, and the European Union in the Asia-Pacific

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This policy brief explores the similarities and contrasts between the European and Indian positions toward the Asia-Pacific.
This policy brief explores the similarities and contrasts between the European and Indian positions toward the Asia-Pacific.

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Published by: German Marshall Fund of the United States on Jul 10, 2013
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08/26/2013

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Summary:
As the United Stateshas grown concerned aboutescalating tensions in the
Asia-Pacic and increased its
involvement in the region, it hassought to enlist the help of twoof the largest economic andmilitary powers in the world:India and Europe. However,these two powers are not proving to be the forthcoming partnersWashington would like. Thispaper explores the similaritiesand contrasts between theEuropean and Indian positions
toward the Asia-Pacic in order
to highlight the challengesfor the United States of international cooperation in anincreasingly multipolar world. Italso recommends how, in lightof their differences, both powersand the United States can bestwork together in the region.
Young Strategists Forum
Policy Brie 
Challenges of a Multipolar World: The United States, India, and the European
Union in the Asia-Pacifc
by Rohan Mukherjee and Clara Marina O’Donnell
1744 R Street NWWashington, DC 200091 202 745 3950F 1 202 265 1662E ino@gmus.org
July 2013
Introduction
As the United States has grownconcerned about escalating tensionsin the Asia-Pacic and increasedits involvement in the region, it hassought to enlist the help o two o the largest economic and military powers in the world: India and Europe.However, these two powers are notproving to be the orthcoming part-ners Washington would like. India andEurope share ambitions o global lead-ership and many o the United States’broad interests in the Asia-Pacic. Inaddition, Europeans are the UnitedStates’ closest military and diplomaticpartners. But both India and Europealso have security priorities closer tohome, and they do not see eye to eyewith Washington — or with each other— on the best way to pursue some o their interests.Tis paper explores the similaritiesand contrasts between the Euro-pean and Indian positions towardthe Asia-Pacic in order to highlightthe challenges or the United Stateso international cooperation in anincreasingly multipolar world. It willalso recommend how, in light o theirdierences, both powers and theUnited States can best work together inthe region.
Common Interests
Like the United States, India and theEuropean Union (EU) stand to gainrom open markets and regionalstability across the Asia-Pacic. Forboth Delhi and Brussels, the region isan important economic partner
.
Sincethe end o the Cold War, India hassought to increase its trade and invest-ment ties with East and SoutheastAsian countries. From Delhi’s perspec-tive, higher levels o investment romprosperous regional economies suchas Singapore and Japan can assist Indiain diversiying its economic relation-ships and in achieving developmentalgoals. Europeans have long viewedtheir Asian counterparts as helpulmarkets or their exports — and theregion’s appeal as a source o potentialeconomic growth has only increasedwith Europe’s economic crisis.Unable to make progress toward tradeliberalization within the World radeOrganization (WO) in recent years,both India and the EU have sought toestablish an extensive network o reetrade agreements (FAs) across theregion — and they have been more
 
2
Policy Brief 
Young Strategists Forum
India’s and Europe’s vestedinterests in stability and regional
cooperation across the Asia-Pacic
go much further than trade andeconomic considerations.
successul so ar than the United States, which has investedmost o its energy in pushing or one comprehensive deal,the rans-Pacic Partnership (PP). Both India and theEU have signed FAs with Singapore and South Korea.India has urther FAs with Tailand, Malaysia, Japan, andthe Association o Southeast Asian Nations (ASEAN). TeEU is negotiating trade deals with the rst three, and withVietnam and Indonesia. Europeans also hope to revive thestalled negotiations or a regional FA with ASEAN.Indias trade with ASEAN countries has grown rom $2.3billion in 1991 to $80 billion in 2012,
1
which amounts toone-third o India’s trade overall.
2
Cross-border investmentshave grown substantially — by 2009, India had received$13.15 billion in oreign direct investment (FDI) rom EastAsian countries.
3
oday, the EU trades more with EastAsia than with the United States. In ASEAN alone, the EUinvested on average $20 billion between 2006 and 2009.
4
EUmaritime trade with Asia accounts or more than 25 percento global transcontinental container shipping trac.
5
Indiaand the EU have particularly high economic stakes withChina. Te country is India’s largest, and the EU’s secondlargest, trading partner.
6
And Beijing is estimated to holdaround one-quarter o its currency reserves in euros.
7
 But, like the United States, India and Europe ace a numbero economic challenges with China. Both entities havesignicant trade and investment imbalances. Indias tradedecit with China currently stands at $40 billion,
8
andIndian rms invest ar more in China than Chinese rms doin India. Te EU’s trade decit with China stands at almost$195 billion.
9
Delhi and European capitals believe that someo China’s trade practices
 
create an unair advantage or
1 Sujay Mehdudia, “India, ASEAN nalise FTA in services, investments,”
The Hindu
,December 20, 2012.
2 Karl F. Inderfurth and Ted Osius, “India’s ‘Look East’ and America’s ‘Asia Pivot’: Con
-
verging Interests,”
CSIS U.S.-India Insight
, 3:3 (March 2013).
3 S.D. Muni, “India’s ‘Look East’ Policy: The Strategic Dimension,”
ISAS Working Paper No. 121
(2011): 19.
4 General Secretariat, “Guidelines on the EU’s Foreign and Security Policy in East Asia,”(Brussels: Council of the European Union, 2012), 3.5 Daniel Keohane, “Strategic priorities for EU defence policy,” FRIDE Policy Brief, No. 146
(2013), 3.
6 General Secretariat, “Guidelines,” 3.7 Jonas Parello-Plesner, “After Cyprus: China watches for its money in the euro zone,”
ECFR Blog 
, May 1, 2013.
8 Will Davies, “Beijing Vows to Ease Imbalance With India,”
The Wall Street Journal
, May22, 2013.
9 “Facts and Figures on EU-China trade,” European Commission, accessed June 20,
Chinese rms at home and abroad, and they dislike Chinasexport restrictions on rare earth materials. Being heavily reliant on imports or their energy supplies, both India andEurope also ace the prospect o competing with Beijing orincreasingly scarce resources over the next decades — moreso than the United States, which will likely benet rom theshale gas revolution.As a result o India’s and Europe’s extensive economicinvolvements in the Asia-Pacic, both powers could seetheir economic interests damaged through trade disputes,particularly with China. Tey could also suer rom any disruption to the various maritime trade routes in theregion, be it as a result o organized crime or regionalborder disputes. And o course, they would bear theeconomic impact o any major military conrontation trig-gered by the contentious disputes in the region, whether inrelation to aiwan, North Korea, or the Senkaku/Diaoyuislands.However, India’s and Europe’s vested interests in stability and regional cooperation across the Asia-Pacic go muchurther than trade and economic considerations. China,whose ties with India have been contentious, seeks tocontain India within South Asia as it expands. Both coun-tries still have an unresolved border dispute, and Beijing’sstrategic links with many o India’s neighbours (especially Pakistan) could urther complicate Delhi’s eorts to main-tain security in its volatile neighbourhood. Te prolierationo weapons o mass destruction and terrorist groups oper-ating in Southeast Asia could harm both Indians and Euro-peans in the region and urther aeld. And i the UnitedStates were to be pulled into a military conagration in theAsia-Pacic, it would signicantly limit the extent to whichWashington — which will already be under pressure toreduce its military spending over the next decade — could
 
3
Policy Brief 
Young Strategists Forum
Delhi has been keen to constrainBeijing’s rise and foster a stable,rules-based Asian order.
intervene in conicts in other parts o the world. Tis couldhave signicant ramications or its European allies, whichrequire U.S. support or large military operations.
Falling Below Expectations
India and Europe are conscious o their various interestsin the Asia-Pacic. And both have requently expressedan ambition to play a role in the region. But, to the UnitedStates’ great rustration, both powers struggle to imple-ment some o their declared ambitions. For decades, India’sleaders have viewed their country as a key geopoliticalplayer in the Asia-Pacic. Tey have promoted India asan Asian power — or at least a potential leader o devel-oping nations in Asia — and Arica. As the power disparity between China and India has grown, Delhi has been keen toconstrain Beijing’s rise and oster a stable, rules-based Asianorder in which India is not compelled to accept outcomesthat are contrary to its interests. Trough the EU and theNorth Atlantic reaty Organization (NAO), Europeansperceive themselves as a orce or good in the world thatcontributes to conict resolution, good governance, and arules-based international system with the United Nations(UN) at its core. In April 2012, Catherine Ashton, the EU’shigh representative or oreign aairs and security policstressed that “developing our relations with Asia acrossthe board is a major strategic objective or the EuropeanUnion.”
10
welve months later while in Japan, Anders FoghRasmussen, NAO Secretary General, argued that
 
today’sNAO is “a NAO with a global perspective” that “seeks towork with the Asia-Pacic region.”
11
Europe does use its large resources in trade and develop-ment aid in an attempt to promote stability and goodgovernance. Te European Commission alone has providedAsia with over $6.5 billion since 2007.
12
It also grants theregions poorest countries duty-ree and quota-ree accessto all products, except or arms and ammunitions, as longas these countries respect core conventions on human andlabor rights. Cambodia, Laos, and imor Leste benet romthis arrangement, and the EU is reinstating it or Burmato encourage recent political reorms. Te EU has levied
10 Remarks by EU HR Ashton following the EU ASEAN Ministerial Meeting in Brunei, April
27, 2012.
11 Speech by NATO Secretary General Anders Fogh Rasmussen, “NATO and Japan:Natural partners,” Japan National Press Club, Tokyo, April 15, 2013.12 European Commission, “MTR Document: Regional Strategy for Asia 2007-2013,”adopted by Commission Decision C(2010) 7863, November 17, 2010, 4.
heavy sanctions on North Korea, and it maintains an armsembargo against China, notwithstanding regular complaintsrom Beijing. However, India, or its part, has not been asassertive in its policies toward North Korea or Burma, letalone China.Both India and Europe have been increasing their diplo-matic involvement in the Asia-Pacic in recent years. Onthe bilateral ront, India has cultivated ties with Cambodia,Laos, Myanmar, and Vietnam, and most recently withJapan. Europeans have established “strategic partnerships”with China, Japan, and South Korea. Both India and Europehave made a concerted eort to engage with regional multi-lateral institutions. Every two years, India, the EU institu-tions, and 29 European countries hold summits with 20Asian countries within the Asia-Europe Meeting (ASEM).Both India and the EU participate in the ASEAN RegionalForum (ARF). Te EU and ASEAN have had ties since1980, and they have progressively enhanced their relation-ship over the years. India started as a sectoral dialoguepartner o ASEAN in 1992, and is today a strategic partnero the association.
 
India participates in the ASEAN DeenseMinisters Meeting (ADMM) and the East Asia Summit(EAS), and the EU has sought to deepen ties with bothgroups. In addition, Delhi has established or co-establishedits own multilateral institutions in the region, includingthe Mekong Ganga Cooperation (MGC), the Bay o BengalInitiative or Multi-sectoral Scientic, echnological, andEconomic Cooperation (BIMSEC), and the Indian OceanRim Association or Regional Cooperation (IOR-ARC).Partly in response to the United States “pivot,” a highernumber o senior Europeans diplomats have been visitingAsia, and they have been making more orceul state-ments on the various regional disputes. At the 2012 ASEMmeeting in Laos, President o the European CouncilHerman Van Rompuy stressed that the EU wanted reedomo shipping guaranteed in the region and conicts to beresolved according to the rule o law,
13
a position almost
13 Interview with Charles Grant, Centre for European Reform, U.K., November 2012.

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