Related posts

The excitement of in-person diplomacy ahead of the G20 summit in Rome (30-31 October) may put geopolitical tensions, epitomised by the US–China clash, on hold. However, a few days later (8 November), things may be different at the Asia-Pacific Economic Cooperation (APEC) summit.

In order to understand the reasons for this guess, let us make an overview of this intergovernmental forum that, though many miles from rond-point Schuman, is relevant for the Old Continent.

The majority of countries bordering the Pacific Ocean meet regularly at the APEC since 1989, with the aim to ease trade in the region. APEC countries, of which there are currently 21, represent nearly 62% of world GDP thanks to the participation of heavy-weights like the United States, China, Japan, and Canada, which together represent 80% of APEC’s economy.

The efficacy of APEC is attested to by the decisions made during the COVID-19 emergency (e.g., members pledged to facilitate trade of vaccines and other essential medical devices), but also by the progress achieved towards reaching broader agreements.

In November 2020, 15 countries signed the Regional Comprehensive Economic Partnership (RCEP), with China as the reference country. The RCEP was born in response to the Trans-Pacific Partnership (TPP), the agreement endorsed by President Barack Obama to stem Beijing’s economic growth and political influence. The TPP was then abandoned by Obama’s successor, Donald Trump, but relaunched by Japan and enriched with the must-have adjectives “Comprehensive” and “Progressive”, to become CPTPP in March 2018.

The two agreements – RCEP and CPTPP – share the objective of liberalising trade in the region; six APEC members are signatories to both (see Table 1). The RCEP is larger than the CPTPP (Cambodia, Laos, and Myanmar participate in the agreement alongside 11 APEC countries) and is the first regional agreement that includes China, Japan, and South Korea. Compared to the RCEP, the CPTTP is more ambitious on tariffs and investments, on State-Owned Enterprises (SOEs), especially with regard to public subsidies, on workers’ rights, on privacy, and on data transfer between member countries.

The UK, China, and Taiwan all recently applied to join the CPTPP. Existing members of the agreement decided to open negotiations with the UK, for whom ‘Pacific’ is the manifestation of a certain post-Brexit horror vacui regarding trade agreements. Taiwan applied on 22 September, six days after China did, probably hoping to join the partnership before Beijing, thus avoiding its likely veto as a member.

China’s candidacy to the CPTPP raised some eyebrows as the country remains far from the agreement’s objectives, such as in the field of SOEs and state interventionism. It is unlikely that CPTPP members will welcome China, as the nation was welcomed 20 years ago when it joined the World Trade Organization: the expected transition to a market economy has proven to have been wishful thinking.

China being granted membership is rendered even more unlikely considering the position of some CPTPP members, especially Australia. The already tense relations between those countries have certainly not improved after the AUKUS agreement (where collaboration with the UK and US will equip Australia with nuclear-powered submarines), after President Xi Jinping’s commitment to a reunification with Taiwan, and after the test of a Chinese nuclear-capable hypersonic missile. The US, even if it is not a member of the CPTTP, can exert its anti-China influence in the Pacific area. However, American influence in the Pacific as it existed in 2008, when the TPP was launched, is now fading as Pacific countries have intensified economic relations with China, conversely reducing links with the United States.

Table 1: APEC members and their participation in CPTPP and RCEP

How might the APEC summit turn sour?

The rich agenda of the forthcoming APEC summit, to be discussed across eleven time zones, may cool American and Chinese hearts. In addition to issues directly related to the COVID-19 pandemic, it will actually be necessary to discuss how to strengthen value chains and how to make trade more sustainable.

However, unlike the G20 in Rome, the APEC summit will see the empathy of in-person meetings replaced by physical distancing: being in one’s stronghold, connected through high-quality video, may increase one’s ease to lift the drawbridge in case of a clash. Moreover, since physical geography cannot be altered, European countries won’t participate to the APEC summit.

The EU has found itself equidistant between China and the US and could have stood in the way of a direct confrontation. The EU and China reciprocated bilateral sanctions after a European Parliament resolution condemning China’s policy in Xinjiang and in Hong Kong, thus freezing the Comprehensive Agreement on Investment. As far as transatlantic relations are concerned, President Joe Biden has barely improved the legacy of his outspoken predecessor, as demonstrated by the nominal progress on tariffs on EU steel and aluminium and the AUKUS agreement. It is an odd coincidence that, after months of patience, the Commission and the High Representative publish the new strategy for the Indo-Pacific the day after the announcement of the AUKUS agreement, which does not include any EU nation.

AUKUS was an agreement high on symbolism but low on substance.

It symbolised the continuity of the “Pivot to Asia” policy through three successive Presidencies, from Obama, to Trump, to Biden. In terms of strategic substance, however, it did not add much to existent collective security arrangements. The US and Australia were already formally bound together, along with New Zealand in a tripartite collective defense agreement (ANZUS). The signatories of AUKUS are also members of other security arrangements, such as the “Five Eyes” agreement on sharing intelligence, that includes Canada and New Zealand.

Furthermore, AUKUS is not an alliance in the strict sense of the term, in that it does not include a collective defence commitment like NATO’s Article 5 does. Accordingly, it does not provide for automatic collective action in the event, let us say, of a Chinese provocation in Taiwan. All this may have amounted, in strategic terms, to a storm in a teacup, if the Biden administration had not infuriated the French and annoyed the Europeans with the way it handled the whole issue.  

The French were infuriated because the largest arms export deal in French history (roughly 56 billion euros) was “stolen” from them, and to add insult to injury to Macron, it happened less than a year from the French elections. The deal was struck in secrecy, with the Americans and the Australians failing to inform the French that they were involved in parallel negotiations. This is not supposed to happen among allies and friends, and the French struck back accusing the parties involved of lies, duplicity, and a major breach of trust. The agreement was also a real blow to France’s Indo-Pacific strategy, meticulously developed over the last several years, along the Paris-New Delhi-Canberra axis.

Finally, there was the ghost of Nassau. The French felt, once again in their history, slighted by the Anglo-Saxons. In December 1962, it was the Kennedy administration that tried to appease the Macmillan government over the cancellation of the Skybolt missile project that was supposed to provide the basis of the UK’s independent nuclear deterrence. In order to appease the British, the Kennedy administration conceded to provide them with the Polaris missiles that represented a much more technologically advanced missile system. De Gaulle became outraged over the special treatment of the British by the Americans and the fact that a similar deal wasn’t extended to the French. He castigated this “Anglo-Saxon collusion” and, months later, blocked Britain’s entry into the EEC. It would be the beginning of de Gaulle’s independent foreign policy. The force de frappe, the “all azimuth strategy”, and the eventual French withdrawal from NATO’s military structure would become de Gaulle’s heretical actions within the Western camp during the apex of the Cold War.

The AUKUS agreement felt like déjà vu to the French political elite. It was no accident that the French opposition revived the Gaullist rhetoric, while the official French communiqué talked about “the need to raise loud and clear the issue of European strategic autonomy”.

If the French felt betrayed by AUKUS, the Europeans felt that the honeymoon between the European Union and the Biden administration came to an abrupt end. First, it was America’s hasty withdrawal from Afghanistan that did not give the Europeans enough time to withdraw their own people. Second, it was the troubling aspect of AUKUS that included Britain at the expense of a European member state, giving Brexiters the pretext to boast that they have delivered on their promises on a post-Brexit “Global Britain”.

AUKUS reminded Europeans that Europe’s geopolitical significance to American policymakers has declined after the dissolution of the Soviet Union and the rise of China. More importantly, it was a sad reminder that Europe is not viewed by the US as a global power with whom America needs to deepen cooperation to face common challenges.

Suddenly, Europeans realised that Trump might be gone, but his policies remain, and Biden’s comforting words on the value of transatlantic ties did not amount to much more than words. It is no coincidence that besides the offended French, the Germans, the staunchest transatlanticists of the continent, argued that AUKUS “ought to be a wake-up call for all Europeans”.

No one in Europe would argue against America’s urgent priority to focus on China’s rise and the need to deal with the challenges of China’s global agenda. The “Pivot to Asia”, however, together with the American withdrawal from other regions, send the wrong signals to other revisionist authoritarian powers such as Russia. They signal that America is receding from its role as a global hegemon, abdicating its global responsibilities. Furthermore, while America may be pivoting to Asia, China is pivoting everywhere, as its globally ambitious “Belt and Road” strategy suggests. Whereas China is emerging as a global power, America is perceived to be posturing as a regional Pacific power.

The United States needs to address the rising Chinese challenge across the globe and in every relevant policy area. In this effort, “Pivoting to Asia” will not suffice. To effectively meet the Chinese challenge, America will need to resume its global reach. Doing so will require the cooperation of the European Union, and the unity of the Transatlantic Alliance. A united West “Pivoting to Eurasia” is a much more geopolitically sensible strategy to effectively counter China’s growing challenge.