Young Strategists Forum
India’s and Europe’s vestedinterests in stability and regional
cooperation across the Asia-Pacic
go much further than trade andeconomic considerations.
successul so ar than the United States, which has investedmost o its energy in pushing or one comprehensive deal,the rans-Pacic Partnership (PP). Both India and theEU have signed FAs with Singapore and South Korea.India has urther FAs 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 FA with ASEAN.India’s trade with ASEAN countries has grown rom $2.3billion in 1991 to $80 billion in 2012,
which amounts toone-third o India’s trade overall.
Cross-border investmentshave grown substantially — by 2009, India had received$13.15 billion in oreign direct investment (FDI) rom EastAsian countries.
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.
EUmaritime trade with Asia accounts or more than 25 percento global transcontinental container shipping trac.
Indiaand the EU have particularly high economic stakes withChina. Te country is India’s largest, and the EU’s secondlargest, trading partner.
And Beijing is estimated to holdaround one-quarter o its currency reserves in euros.
But, like the United States, India and Europe ace a numbero economic challenges with China. Both entities havesignicant trade and investment imbalances. India’s tradedecit with China currently stands at $40 billion,
andIndian rms invest ar more in China than Chinese rms doin India. Te EU’s trade decit with China stands at almost$195 billion.
Delhi and European capitals believe that someo China’s trade practices
create an unair advantage or
1 Sujay Mehdudia, “India, ASEAN nalise FTA in services, investments,”
,December 20, 2012.
2 Karl F. Inderfurth and Ted Osius, “India’s ‘Look East’ and America’s ‘Asia Pivot’: Con
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
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
6 General Secretariat, “Guidelines,” 3.7 Jonas Parello-Plesner, “After Cyprus: China watches for its money in the euro zone,”
, 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 China’sexport 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 benet rom theshale gas revolution.As a result o India’s and Europe’s extensive economicinvolvements in the Asia-Pacic, both powers could seetheir economic interests damaged through trade disputes,particularly with China. Tey could also suer 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 conrontation 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-Pacic go muchurther 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 eorts to main-tain security in its volatile neighbourhood. Te prolierationo weapons o mass destruction and terrorist groups oper-ating in Southeast Asia could harm both Indians and Euro-peans in the region and urther aeld. And i the UnitedStates were to be pulled into a military conagration in theAsia-Pacic, it would signicantly limit the extent to whichWashington — which will already be under pressure toreduce its military spending over the next decade — could