Contrasting trajectories of Indo-EU and Sino-EU ties

 On 8^th May, the Prime Minister, Modi held a summit meeting with EU and its 27 Member States in hybrid format in Porto after worsening Covid pandemic led to cancellation of his visit for the summit. Referred to as EU+27 Summit, it was significant for two reasons. Aside the strategic importance of it being the India-EU Leaders Meeting encompassing the leaders of all the 27 EU Members, this kind of format was convened only once earlier to meet the US President Joe Biden in February of this year.

Last year, a similar kind of Summit in hybrid format was supposed to be held with President Xi. But the Wuhan virus onslaught created new tensions and the summit was reduced to a smaller version.

The historic summit on 8^th May, which garnered international attention, came days after a precipitous down-turn in EU-China relations over the human rights issue and growing fears of buyout of European firms by the Chinese companies. On 6^th May, the European Commission’s Vice President, Valdis Dombrovskis in a press interview stated, “It’s clear in the current situation with the EU sanctions in place against China and the Chinese counter-sanctions in place .. (that) the environment is not conducive for ratification of the agreement”¹.

Pending the necessary endorsement from the European Parliament, the EU has suspended all efforts to ratify the EU-China Comprehensive Agreement on Investment (CAI) signed on 30^th December, 2020. The EU-China relations appeared to be firm-footed following the signing of the investment treaty; now seeped with ambiguity. Despite fair amount of objections from certain corners, driven by France and Germany, the EU signed investment agreement. Since then, much water has flowed and the European countries which believed in using the CAI as a leverage to change China’s behaviour became highly vocal about Beijing’s human rights policy.

In March, the EU sanctioned four Chinese officials over alleged ‘genocide’ of the Uighurs in Xinjiang province. Beijing immediately responded with retaliatory sanctions on ten European nationals, five MEP (Members of the European Parliament) and four academic institutions. Beijing’s act miffed the European legislators which came at a time the caustic war of words between the US-China delegation meetings at Alaska startled the World.

Making no effort to hide his discomfort, Josep Borrell wrote in his blog,” We may not always agree on everything in the EU, but there has been a firm, principled and unanimous rejection of these Chinese sanctions, which indeed are both disproportionate and unjustified. Clearly, this move makes our relations and cooperation more difficult”. 

Amid the environment of trust deficit, France, Germany and the Netherlands announced their Indo-Pacific strategies prompting the EU, which was adamant till last year to have EU-Indo Pacific strategy to draw its own policy. Instructively, the Council of the European Union released Council Conclusions on an EU Strategy for cooperation in the Indo-Pacific in April. With Germany, UK, the Netherlands set to deploy vessels to the South China Sea later this year, the trust deficit is going to widen further.

Together, a legislation by the EU anti-trust Chief to prevent foreign take over of European assets whose values have taken a hit by pandemic, especially by the Chinese companies, and similar legislations by other European countries have also exacerbated the burgeoning ambiguity. Trump’s cantankerous attitude created ripples in the trans-Atlantic relationship which analysts believe has driven EU to sign investment treaty with China. Increasingly, now European countries are desirous of putting a united stance under the leadership of Biden’s administration against China.

Last week, at the G7 Foreign and Development Ministers meeting, France and Germany signed a joint statement endorsing Taiwan’s membership to WHO and the World Health Assembly (WHA). Taiwan thanked the G7 for the support and expectedly, China condemned the G7 for “gross interference in China’s internal affairs”².

An undercurrent of China scepticism is steadily building up in the EU. The three main political parties of the European Parliament- S&D, Renew Europe and the Greens which together account for 45% of the seats refused to debate the ratification as along as Chinese sanctions are in place³. With this the EU has put the pathbreaking China Pact on the backburner.

Though the Chinese media agencies were quick to jump in to counter the narrative stating that the EU Spokeswoman reportedly saying that EU Trade Chief Dombrovskis’s comment “has been taken out of the context”. A Chinese analyst believed that Beijing’s sanctions have stone-walled the investment deal which he believed wouldn’t pass. “China brilliantly succeeded in doing what is feared the most: to make China an object of a European political debate and above all to unite the different political sensitivities among themselves”, he said⁴.

Aside, China’s new found enthusiasm for retaliatory sanctions that have immediately irrevocably miffed the relations and brought the relations to a precipice, even its cheque-book diplomacy through the so called 17+1 platform is witnessing new frictions. Started in 2012 and believed to be a spin-off of “divide and conquer” tactics, the Eastern Summit is now showing all signs of erosion. The Eastern European nations are reportedly growing wary of China. Two Baltic nations-Estonia, Latvia, have openly snubbed the Eastern Summit and President Xi by sending low level officers to the meeting in February.

Leading the way, the Lithuanian parliament is readying to exit 17+1 with politicians advocating for closer links with Taiwan. Three Baltics- Estonia, Latvia, Lithuania signed a bilateral declaration with the US to block operation of Huawei from their territories. These nations aren’t kindly to the boorish public diplomacy of China and sanctions on Baltic diplomats for their references to China’s human rights⁵. Clearly, Beijing’s economic inducements are unable to create lasting relationships. Clearly, Democratic values and human rights issues are now emerging as the major roadblock hindering the trajectory of China-EU ties.

In sharp contrast, democratic values, freedom, rule of law and respect for human rights have bolstered engagement between India and EU providing fresh impetus for the revival of the trade talks stalled in 2013. Exuding optimism over the chance to expand the cooperation to support “effective multilateralism and a rules-based order”, ahead of the summit, Prime Minister Modi and Prime Minister Antonio Costa of Portugal which currently holds the rotating presidency of the Council of the European Union jointly penned an editorial in Politico titled- “Trade and beyond: A new impetus to India-EU partnership”⁶.

Both leaders noted that, “India’s role as a major regional and global player is set to continue to expand over the coming years, and a strengthened partnership would offer Europe an opportunity to diversify relations in a strategic region of the World”. Clearly, India’s

Building on the architecture of the 1994 Strategic Partnership, the World’s two largest democratic spaces have initiated a dialogue to ‘rebalance relations between the EU and the Indo-Pacific’. Owing to burgeoning strategic importance of Indo-Pacific region in geopolitics and geoeconomics, India has emerged as a major pillar for partnership in the region.

EU besides being a leading foreign investor in India is also the biggest trading partner and second largest destination of Indian exports. Trade between India and the EU has increased 72% in the last decade. European investments have generated 1.7 million direct and 5 million indirect jobs⁶.

With multilateralism and the Indo-Pacific region dominating the agenda, building on convergences and fostering new synergies, India and EU agreed to jointly contribute “to a safer, greener, cleaner and more digital, resilient and stable world in line with the 2030 Agenda for sustainable development and the Paris Agreement”⁷.

Through the India-EU Clean Energy and Climate Partnership both sides are deepening cooperation and collaboration on renewable energy, climate change, encourage sustainable finance and investment on climate action, tackling air and water pollution, smart and sustainable urbanisation.

Badly affected by the pandemic, both sides agreed to cooperate on resilient medical supply chains, vaccines and the Active Pharmaceutical Ingredients (APIs) and adherence to international good manufacturing standards to ensure high quality and safety of products. Despite the consensus building on the pandemic management and preparedness, both sides failed to arrive on common ground on the issue of waiver of IPR related to Covid vaccines.

To boost economic cooperation India and EU plan to hold two meeting on High-Level Dialogue on Trade and Investment and launch negotiations on stand-alone investment protection agreement and geographical indication. Determined to pursue digital transformation, India and EU agreed on deep technological cooperation on global digital standards and network security, Quantum and High- Performance computing.

The most important outcome is the announcement of sustainable and comprehensive connectivity partnership which is transparent, viable affirms to shared values of democracy, freedom and that upholds international law and aims at enhancing cooperation between India and EU through projects in Africa, Central Asia and Indo-Pacific to build digital, energy, transport and people to people connectivity. As a precursor to connectivity agenda, comprehensive cooperation on Mobility and Migration is mooted. In line with the EU’s Indo-Pacific Agenda, India and EU besides holding inaugural dialogue on maritime security, welcomed cooperation between the Indian Navy and EUNAVFOR Atalanta in the Indo-Pacific region.

In tune with changing strategic global contours, the EU is swiftly recognising the prominence of India as a responsible power in the Indo-Pacific region. Responding to these developments, CCP’s propaganda machinery, the Global Times published an article, “India put on table by EU as ‘backup plan’ for trade; side-lining China only ‘wishful thinking’” expressing its derision. It read, “however, it is becoming crystal clear to Western media and experts that such interaction between India and Europe shares another goal: to side-line or confront China, particularly when the China-Europe relationship has been souring due to growing tensions after the EU took a harsh stance on China’s Xinjiang-related issues, which also apparently weighed on ratifying the China-EU investment deal”⁸.

The historic India-EU summit is significant in many ways, not for the high-sounding moral epitaphs’ in the Joint Statement. But this event reflected the change in tenor and posture of the EU towards India, which in part can be attributed to New Delhi’s sustained diplomatic efforts but also to EU’s increasing tensions with China. EU’s Indo-Pacific strategy is thus an effort to balance the polarising power in the region. India, on the other hand in response to China’s challenge is investing on building alternate resilient supply chains, increasing domestic capacities and strengthening partnerships for a multipolar world.  

India’s political and diplomatic investments are now yielding fruits. Thanks to India’s health diplomacy, European countries have rallied around and supplied much needed supplies as the country battled the second wave. French President Emmanuel Macron’s statement, India doesn’t need to be “lectured from anyone” on vaccine supplies, sums up the kind of good will India has accumulated.

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