Nato and China summits give Europe a chance to assert its interests and stabilise the global order

Vasilis Trigkas says back-to-back summits with the current and rising hegemon give the EU a chance to take the initiative in providing for its own security and securing a trade deal with Beijing, which may bolster a WTO-led order threatened by Trump

PUBLISHED : Friday, 06 July, 2018, 5:03pm
UPDATED : Friday, 06 July, 2018, 6:01pm

July 2018 could be a consequential month for global geopolitics. On July 11, Nato allies will gather in Brussels to discuss the future of the free world amid United States retrenchment and US President Donald Trump’s polemics against the alliance and the “freeriding” Europeans.

Then, on July 15, European Union leaders will head to Beijing to attend the 20th China-EU summit with the global commercial order at stake. For the first time since its geopolitical suicide in the first world war, Europe has a chance to exercise fine diplomacy on a grand scale, soundly protect its interests and preserve the institutions that have kept the world safe and prosperous. 

Unlike the monotony of usual Nato summits, this one will be “predictably unpredictable” due to the mercurial character of the big elephant in the room: Trump. For the past year, following up on his electoral campaign rhetoric, Trump has repeatedly accused the Europeans of failing to share the security bill; meaning, to procure expensive arms from the bloated American military-industrial complex.

Trump has defied Washington's foreign policy establishment and even questioned the benefit of Nato to the US national interest. Never mind that Nato has always done an impeccable job in keeping “America in, Russia out and Germany down”. Just recently, at the eventful G7 summit in Canada, Trump put Nato next to Nafta as two treaties he is sceptical about and which need to be revised or abandoned.

In a US-China trade war, Europe could be the big loser

However coercive Trump has become, Europeans have no need to undo years of painstaking fiscal consolidation and spend big in building guns abroad when the threats at home are transnational and demand tailored security policies. Even Russia, often framed as an existential threat for Europe, is not defying the EU’s security by unleashing tank battalions. Instead, it is going hybrid – utilising misinformation and smart propaganda to exacerbate intra-European populism.

Trump’s rage should inspire Europe to spend on strategy instead: to follow up on French President Emmanuel Macron’s security initiative; take the Permanent Structured Cooperation on steroids and move faster towards a fully fledged security union with its own information agencies and regional security agenda to protect borders; stabilise failed states across its periphery; and, ultimately, integrate the European defence industry into civil innovation, similar to the US Defence Advanced Research Projects Agency.

In Beijing, EU leaders may have a seemingly easier task negotiating with the Chinese on trade but caution is always a wise counsellor. According to reports from the meeting of the vice-president of the European Commission, Jyrki Katainen, and Chinese Vice-Premier Liu He in June, the two sides are ready to present their detailed market access conditions by mid-July and reboot the dormant discussions on a bilateral investment treaty.

As US and EU square up on trade, one country benefits: China

If negotiations accelerate and China and the EU reach a final accord by the end of the year or early 2019, this would complicate US efforts to rebalance its economic relations with China. It could push trigger-happy Trump to unleash tariffs against European exporters at a moment when the EU has just found its economic pace. Any benefits from a bilateral investment treaty with China may be undone by a full-scale transatlantic trade war and an utterly divided West.

The EU should thus only accept a transparent deal with China, making investment relations reciprocal and balanced without alienating Washington. Chinese companies enjoy easy access to funding by state-owned banks and are able to increase financial leverage and competitively bid for the EU’s crown jewels.

The US sees the trade war as a tactic to contain China. So does Beijing

European companies have no similar capacity, and the EU has no screening mechanism to deter such activities. The bilateral investment treaty should thoroughly and bindingly address these issues. Such a balanced China-EU treaty could even serve as a model for a prospective commercial rapprochement between Beijing and Washington.

Watch: Trump emphasises hard-line China stance at Foxconn groundbreaking in Wisconsin

It could help catalyse reconciliation and stabilise the global economy amid the shock waves of nascent protectionism and bearish markets. The EU would have offered Trump a smart way out of a trade conflict with China, without undermining his image as an “artful negotiator”.

An even more significant accomplishment with immediate impact during the summit would be for Brussels and Beijing to double down on their unconditional support for the World Trade Organisation as the prime legal vehicle to resolve trade disputes, particularly now Trump is considering pulling the US out.

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Even with all its limitations, the WTO remains an institutional pillar of legality able to adjudicate trade differences and bind big and small players alike to play by the rules that all have agreed on. In the post-second-world-war history of global governance, the WTO serves as a progressive institution which reconciles national ends with supranational commitments and thus normalises an otherwise anarchic world. It took decades to build, but it would only take days to demolish if big players do not protect it.

It seems hyperbolic to argue that a Brexit-embroiled EU, which has barely managed to survive a prolonged financial crisis in the euro zone and is now polarised by discussions on asylum seekers, will be the prime strategic actor sitting at the table in the two back-to-back summits with the US and China; the ruling and rising hegemon.

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How could the EU be a functioning partner in a diplomatic dance with no real foreign minister? As a Swedish polymath metaphorically put it when thinking of the EU negotiating with China and the US: “A lamb was told it would be invited to the Christmas table. It happily considered this a glorious invitation and looked forward to being a treasured guest. Nobody said it would be served fully cooked with mint jelly.”

If the EU continues to waver then it will indeed be a lamb eaten by lions. However, if it realises that domestic disagreements on the process and pace of integration ought to be put aside to focus on the bigger strategic opportunity, then it could act as a fox and get round the lions.

This may still not be enough to give Europe its finest moment, but it could mean a fine month, or at least a fine beginning towards a strategically literate and versatile Europe in an epoch of hegemonic transition. A more “foxy” EU in the two approaching summits could provide an essential pillar for global stability; a pillar finely made in Europe. Both Aesop and Machiavelli would endorse it.

Vasilis Trigkas is an Onassis Scholar and research fellow in the Belt and Road Strategy Centre at Tsinghua University