Wilson Briefs

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 December 2014

The U.S. pivot and the debate in Europe

The U.S. pivot, which centers on diplomatic, economic, and military initiatives to ensure that Beijing’s rise does not upset the U.S.-led order in Asia, has generated debate in Europe about aligning with Washington’s program. Advocates of alignment argue that Europe’s engagement with Asia’s economies has been fostered by the protective U.S. umbrella, as the EU itself is not capable of enforcing its own vision so far away.

How Europe and the United States Can Boost Cooperation and Manage Competition in Asia

by Nicola CasariniIn the early 2000s, the European Union (EU) began its own rebalance or pivot toward Asia. The European pivot often competes with the United States in focusing on economic, monetary, technological, and defense-related issues such as arms sales. But the EU and its member states harmonize with U.S. goals in boosting diplomacy, supporting multilateral security fora and regional integration initiatives, and deploying soft power. The EU and the United States should improve their dialogue on Asia to better understand their own interests and priorities, identify areas for cooperation, and manage competition.

SUMMARY

 

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Others support European autonomy, arguing that the EU’s economic interests in Asia would be better promoted through independent action, and also because, unlike the United States, it does not have troops to protect or alliances to support there.Most European policymakers and experts, however, maintain that EU-U.S. relations on Asia will likely combine alignment on security issues and competition on economic matters.

The European pivot

Europe’s own rebalancing began in earnest in the early 2000s, following the realization that Asia, especially China, had become central to global prosperity and to the EU’s growth prospects. The EU-China strategic partnership, established in October 2003, exemplified the change, expanding collaboration beyond trade to high-tech, monetary, and defense issues. Three major initiatives accompanied the partnership: (1) joint development of Galileo, a global navigation satellite system that could rival the U.S. Global Positioning System; (2) discussion on lifting the EU arms embargo imposed on China following the June 1989 Tiananmen Square crackdown; and (3) informal commitment by the People’s Bank of China to diversify its foreign currency reserves away from the dollar and toward the euro.

Promoting EU aerospace and defense interests

Space cooperation has been expanded to other Asian countries, too. Since 2006, the EU has agreed on joint development of Galileo with South Korea and India, and has developed industrial cooperation in space technology with Japan and Taiwan. EU member states, within the NATO framework, have established defense dialogues and military links with American allies such as Japan and South Korea. But France, Germany, and the United Kingdom have also set up strategic dialogues with China itself, complemented by training of Chinese military officers and high-level visits. Europe’s aerospace and defense industry, increasingly dependent on exports, finds a promising market in Asia, and commercial considerations often trump concerns over Asia’s strategic balance. Asia imports almost 20 percent of its armaments from Europe and around 30 percent from the United States.

Fostering trade and promoting the euro

Traditionally, trade has been a top priority in EU-Asia relations. Since 2011, the EU has signed free-trade agreements with South Korea and Singapore; is negotiating agreements with Japan, Vietnam, Malaysia, and Thailand; is discussing a trade and investment agreement with

 

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the Association of Southeast Asian Nations (ASEAN); and is negotiating a bilateral investment treaty with China that could foreshadow a free-trade agreement.Eurozone members have also promoted the euro. Asia has become the largest buyer of euro-denominated assets, and euros average 25 to 27 percent of the foreign exchange portfolio of the central banks of Asia’s major economies, reaching 32 to 34 percent in China, the world’s largest holder. The euro is the second most important reserve currency in Asia—after the dollar, but before the yen.

Between competition and cooperation

Attitudes toward China are possibly the main difference between the two pivots. The United States approaches Beijing in the context of an Asia policy and system of alliances, while Europeans traditionally engage Asian countries—particularly China—bilaterally and without the strategic considerations that inhibit the United States. But recently, recognizing China’s growing assertiveness toward its smaller, weaker neighbors, the EU has begun a more comprehensive approach to the region, one that includes its own role in cases of conflict. As Catherine Ashton as EU high representative for foreign affairs and security policy and Hillary Clinton as U.S. secretary of state said in a July 2012 joint statement, the transatlantic allies have a shared interest in Asian security, especially in fostering multilateral-based rules and standards. The EU has boosted diplomatic support for multilateral security fora and regional integration initiatives. It belongs to the ASEAN Regional Forum and the Council for Security Cooperation in the Asia Pacific, and will join the East Asia Summit if invited. It consistently supports ASEAN as a “partner in integration,” and appointed a dedicated ambassador to ASEAN in September 2014.Support for Asian integration and reconciliation is an important aspect of the EU’s rebalance. The EU backs the ASEAN+3 (ASEAN plus China, Japan, and South Korea) framework and the Trilateral Cooperation initiatives among Beijing, Seoul, and Tokyo, including the South Korean-inspired Northeast Asia Peace and Cooperation Initiative.The EU and its member states have also deployed their soft power arsenal in the East: the EU is the largest provider of development aid and humanitarian assistance in Asia and a major contributor to civilian capacity-building initiatives. This offers a complement to U.S. hard power. Moreover, the United States and the EU are also committed to promoting democracy, human rights, and the rule of law in Asia. Federica Mogherini, Ashton’s successor as high representative, declared in September 2014 that the United States and the EU should pivot together toward Asia.