Enter EU: The Challenges and Cooperation Potential of the Indo-Pacific Strategy

After the initial proposal of a joint strategy in April 2021, the EU formally released its Indo-Pacific strategy on 16 September 2021 – detailing its approach to a region which accounts for over 70% of global trade and over half of the world’s population. The strategy builds upon the April 2021 proposals, and reflects the EU’s growing stakes in the stability of the Indo-Pacific. The central theme of the “EU Strategy for Cooperation in the Indo-Pacific”  is the diversification and expansion of strategic partnerships beyond China, Japan, South Korea, and India, and interregional ties with ASEAN. In doing so, the EU outlines seven priority areas for the Indo-Pacific where it aims to uphold a ‘rules-based international order’ and ‘fair environment for trade and investment’. These priority areas include sustainable and inclusive prosperity, green transition, ocean governance, digital governance and partnerships, connectivity, security and defence, and human security. 

The strategy represents a fundamental step towards the formation of a joint EU policy in the most dynamic and consequential region of the world, bringing in significant resources to address vital challenges such as climate change, openness of sea routes, connectivity and development. Collectively, the EU and its member states have the capacity to deliver on many of their commitments, due to the comprehensive and flexible nature of the strategy.  However, the EU will have to navigate a set of challenges that raise several practical questions. How will the EU manage to mobilise its potential and pursue its strategic goals? 

This EIAS Policy Brief will examine the main obstacles and opportunities to the EU’s declared goals envisioned for the Indo-Pacific. It will focus on addressing the challenges related to  coordination among the Member States, and the seven issue-areas outlined in the strategy. Finally, it will examine the strategic implications of the EU’s newly released policy document. While it commands significant capabilities to make a positive impact in addressing the challenges of the region with its positive and flexible strategy, its strategic ambiguity may risk marginalising the EU itself in times of mounting geopolitical competition.

Consensus within the EU

Although the Indo-Pacific strategy represents a joint effort by all EU member states to engage with the region – beyond the previously launched individual strategies of France, Germany, and the Netherlands – there remains a great deal of variation in definitions, views, and interests between member states on the usefulness of such an EU strategy, on its priorities, and on the definition of the Indo-Pacific region itself. A qualitative survey conducted by the European Council on Foreign Relations highlights many of these disparities. It outlines how each country greatly differs on the level of importance they place on a ‘joint European approach’ as well as which actors they rank as ‘most important’ in the region. Even the varying geographic definitions of the ‘Indo-Pacific’ between EU member states reflects the fragility of the joint strategy in the region, with many member states disagreeing on the geographic delineation of the ‘Indo-Pacific’. It must be underlined though, that the EU’s involvement in the region is only incipient and has often been piecemeal, driven by national – as opposed to unified community – priorities. Therefore, the strategy signals a first step towards establishing strategic guidelines for Member States, eventually fostering greater coordination. Nevertheless, the challenge will be in implementing and monitoring the strategy and execution of its related actions. We will now analyse the key areas prioritised by the Strategy.

  1. Technology and Connectivity

The EU’s strategy for the Indo-Pacific prioritises Digital Partnership Agreements with like-minded partners such as India, Japan, and South Korea, in line with democratic values, human rights and the EU’s Digital Agenda. It also seeks to harmonise data protection regimes to create zones of free data flow. However, unwieldy regulations such as the EU GDPR raise high barriers to technical compatibility with partners in the region. The digital component features heavily in the EU’s connectivity initiatives. Particularly, the EU builds upon the Build Back Better World (B3W) scheme launched at the June 2021 G7 summit, which sets high technological, sustainability and environmental standards that many regional partners are ill-equipped to meet. Technical assistance provided by development institutions such as the European Investment Bank or the European Bank for Reconstruction and Development should provide gradual assistance to developing countries to meet high standard demands. These initiatives, however, should be accompanied by constant political dialogue with relevant authorities, as well as private contractors and stakeholders to ensure compliance and smoothen the process. Furthermore, in light of  the vulnerabilities exposed by overly relying on China for critical supply chains, the EU could collaborate with regional partners such as Japan, South Korea and Taiwan to strengthen and diversify critical supply chains. Finally, the EU could pool talent and resources with the aforementioned partners to develop standards for data management and emerging technology in line with human rights and democratic values, currently challenged by Beijing’s technological rise.

  1. Ocean Governance

The EU aims to take action to strengthen ocean governance in the Indo-Pacific to ensure the sustainable management of ocean resources and safeguarding biodiversity, in full compliance with international law such as UNCLOS, as well as through the implementation of relevant Regional Seas Conventions and Action Plans. It plans to deepen its integration with regional fisheries management organisations and work towards the designation of protected areas in the region. While these policies are important, the differing work and living standards of fishermen in partner countries, and the outlook of the EU (in line with labour standards of the ILO) may cause difficulties in cooperation with regional partners. However, it presents a good opportunity for the promotion and amelioration of working conditions, especially through multilateral cooperation mechanisms such as the ASEAN-EU Plan of Action, contributing towards Human Security goals.

  1. Security  and Defence

The EU also wishes to enhance its naval presence in the Indo-Pacific, taking on the role of a major maritime security provider. To this end, it plans to step up joint exercises and port calls with its partners in the region, such as India, Australia, Singapore, Japan and Vietnam. Moreover, the EU aims to increase the importance of operations such as EUNAVFOR Operation Atalanta, as well as enhance Critical Maritime Routes in the Indian Ocean (CRIMARIO) capacity building projects. Despite the EU’s wish to increase its importance as a security provider, it is not the major partner in regional operations. As it is an outside stakeholder to many of the subjects mentioned in the strategy, the EU needs to weigh its expectations against the scale of operations it can provide, its compatibility with extant initiatives and the political will of the member states (with security matters being a member states’ competence). The member states, working through the EU, could potentially take advantage of their collective diplomatic weight to act as an impartial and trustworthy mediator for the region on cross-domain security issues.

  1. Human Rights and Governance

Human rights and democratic values pervade each section of the newly published strategy. The EU aims to advance its interests in the Indo-Pacific by “promoting democracy, the rule of law, human rights, and universally agreed commitments”, but falls short of detailing how and when values and interests coincide. Besides thematic dialogues, the strategy emphasises the use of sanctions to combat human rights violations. Yet, trade restrictions risk damaging political relations with key partners, thereby undermining the basis of regional cooperation  partnerships. Therefore, the EU needs to decide whether it will continue to be a “geopolitical” player – prioritising its strategic interests – or a normative champion – defending its understanding of human rights and democracy. Given the region’s sensibility towards internal governance issues, the EU could engage in both high-level and working-level diplomacy, avoiding unwanted publicity.  

  1. Climate Change and Green Transition

Alongside human rights and democracy, countering climate change and environmental degradation is given high priority. The EU strategy builds upon the European Green Deal and outlines Green Alliances with states decarbonising by 2050 and Green Partnerships with other partners as key instruments of environmental cooperation. Moreover, the EU will continue to share best practices under the International Platform on Sustainable Finance and seek dialogue with the world’s largest emitters. However, the EU’s climate diplomacy may be obstructed by its own reduction commitments, particularly the adoption of the Carbon Border Adjustment Mechanism (CBAM), which adds tariffs to carbon-intensive products. Several regional partners, including large emitters such as India and China, have already opposed the measure as a bid from the EU to shield its own industries from competition. As a result, the EU’s climate initiatives might be received with increasing scepticism. However, the EU may find willing partners in countries with similar ambitions such as Japan and South Korea. Mirroring the EU Emissions Trading System (ETS), the Chinese ETS  presents another opportunity for setting joint, region-wide standards.

Strategic Implications

Although not explicitly singled out, China is an inevitable factor overall and in each priority area. The EU states an approach of ‘cooperation not confrontation’ and a ‘multifaceted’ engagement with China to maintain a peaceful role in the region. China is a key partner in the fight against climate change, and a net security provider in maritime transnational challenges such as IUU fishing and counter-piracy operations. Such a positive approach is likely to be welcomed by all the partners who are weary of picking sides in the looming US-China rivalry. Especially for ASEAN states, any EU attempt at bridging differences with potential adversaries would help dilute great-power competition and provide room to manoeuvre between the two rivalling superpowers. The EU’s non-confrontational approach has also been warmly received in Beijing. Indeed, in the last EU-China strategic dialogue, Foreign Minister Wang Yi has underscored the potential for cooperation in areas like pandemic control and climate change. 

However, the EU strategy also outlines how it will ‘continue to protect its essential interests and promote its values’, pushing back through ‘restrictive measures… where fundamental disagreements exist, such as on human rights’. These divergences are particularly apparent in the fields of technology and connectivity, where China is a competitor, and defence and openness of Sea Lines of Communication, where China challenges EU interests. This position is even more pronounced when considering that no other individual Indo-Pacific strategy has explicitly outlined these tensions. The approach resonates within the countries that are being exposed to the risks of continued engagement with China – e.g. Vietnam and Singapore –, that have experienced Chinese coercion – Australia –, or whose security interests collide with Beijing’s – Japan and India. However, it risks eliciting a counter-reaction from the Chinese side. As no policy area can exist in isolation, success or failure in one would determine the prospects of cooperation in others. For instance, China has warned that cooperation on climate change is dependent on the solution of disagreements in the overarching political relationship.Therefore, it will be hard for the EU to ensure Chinese cooperation in the absence of a resolution on pre-existing disputes – and in the continued existence of mutual sanctions.

How the EU manages to simultaneously collaborate and compete with China, as well as its other regional partners, will be one of the biggest dilemmas in the coming years. 

Another looming challenge for the EU is ensuring coordination between member states. For instance, encouraging the pooling of financial resources is a prerequisite to the strategy’s success. In policy areas that are exclusive competences of the member states, like defence, such cooperation would be much needed, although the highly sensitive character of these domains makes member states reluctant to cooperate within an overarching EU framework. However, the EU can mobilise significant collective resources to address non-traditional security challenges. For instance, instruments such as ‘Team Europe’ have the potential to reestablish the EU as a leading humanitarian assistance provider, multiplying its member states’ impact.

The multifaceted nature of what is at stake in the Indo-Pacific requires not only a coordinated Member State-response, but also enhanced collaboration with like-minded partners. This is evident in the EU’s effort to achieve a degree of strategic autonomy, ensured by the strengthening of critical supply chains. To achieve this goal, the EU already has several dialogues and cooperation mechanisms in place to leverage partnerships to build resilient supply chains. Chiefly, the EU and the US have jointly kickstarted the Trade and Technology Council in September 2021 to address, among other issues, supply chain security. Moreover, the EU could also encourage investment in critical sectors – above all, semiconductors – by industry leaders in Japan, South Korea, and Taiwan, to reach its goal of domestically producing 20% of global chip output by 2020. 

Acknowledging the importance of inclusive cooperation, the Indo-Pacific strategy’s main recurrent theme is networking with the region. Most importantly, the EU recognises ASEAN as a natural partner, given its centrality in the regional institutional architecture and its leading role in promoting region-wide consultation and institutions such as the ASEAN Regional Forum and the East Asia Summit. Working closer together with ASEAN would give the EU an inroad into managing tensions in the region, as well as establish itself as a trustworthy mediator. 

High expectations should be mitigated by the EU Indo-Pacific Strategy’s incipient stage. While it falls short of detailing concrete steps in some policy spheres, most notably security, it provides the EU member states with a common platform to synchronise their foreign policy priorities. It allows for flexibility in action, while providing the chance for compatibility with numerous pre-existing institutions, both European and in the Indo-Pacific, amplifying the EU’s impact. Despite its shortcomings, it is nevertheless a good starting point for the EU’s goal to increase its footprint in the Indo-Pacific region and safeguard its interests.

Gregory Tiberghien-Römer, EIAS Programme Coordinator
Aadil Sud, EIAS Junior Researcher
Walter Brenno-Colnaghi, EIAS Junior Researcher

Photo credits: Pixabay