An Assessment of the European Union’s Indo-Pacific Strategy
The new Indo-Pacific strategy by the European Union (EU) follows previous measures to increase engagement with the region in the economic, security and connectivity domains. The plan indicates a clear intent to position the EU in the emerging global and regional governance structures, focusing on strategic autonomy, inclusivity, the rules-based order, and common public goods. Implementing the action plan based on the strategy is likely to face numerous challenges, including evolving and sustaining consensus on it within the EU. Nevertheless, it holds promise in contributing to the stability and development of the Indo-Pacific.
Attribution:
Girish Luthra, “An Assessment of the European Union’s Indo-Pacific Strategy,” ORF Issue Brief No. 504, November 2021, Observer Research Foundation.
Introduction
In April 2021, the European Union (EU) released the ‘EU Strategy for Cooperation in the Indo-Pacific,’ a document outlining a cooperation plan with the Indo-Pacific.[1]The strategy defines the region as extending from the east coast of Africa to the Pacific Island States. This differs from the American and Australian conceptualisation of the Indo-Pacific as stretching from the west coast of the US to the western shores of India, and the Japanese, French and the Indian interpretations that see it as extending from the shores of Africa to that of the Americas.[2]Notwithstanding such interpretations, the EU’s strategy has signalled a clear intent to reorient the grouping’s geopolitical outlook and provide guidance for enhanced engagement with the Indo-Pacific. The European Commission and the EU High Representative/Vice President were requested to present a final communication for approval based on the proposed strategy, which was subsequently released on 16 September 2021 through a joint communication to the European Parliament and the European Council that outlined the rationale for a deeper engagement with the Indo-Pacific and the key principles that will guide it.[3]A broad action plan to implement the strategy was also included in the joint communication.
While France, Germany and the Netherlands already had guidelines and strategy documents for the Indo-Pacific,[4]the EU-wide umbrella strategy is a major development. It emphasises that European economic prosperity—and the EU’s vision of its role in a multipolar world—is strongly linked to the Indo-Pacific region. It is an acknowledgement by Brussels of the evolving geopolitical realities, and marks a rebalance from the previous focus on Eastern Europe, the Caucasus, the Levant and North Africa.[5]The guidance document explicitly outlines a wide spectrum of potential engagement with countries in the Indo-Pacific, with a move away from an exclusive focus on trade and investment-based partnerships.
Nevertheless, the new strategy document for the Indo-Pacific must be seen in the context of the EU’s foreign and security policy evolution. Within this broad framework, this paper will outline the distinctive features of the EU’s Indo-Pacific strategy, key imperatives driving the approach, and the potential challenges in its implementation.
The EU’s Global Strategies
The EU’s external policies have evolved gradually since the grouping’s formation in 1993, bringing in increased internal cohesion. In 2016, the EU promulgated the European Union Global Strategy (EUGS), which replaced the European Security Strategy (adopted in 2003). The EUGS highlighted the importance of strategic autonomy for the EU and stressed the need to enhance its credibility as a global player. Key aspects covered were to improve internal and external security; stabilise fragile states on the EU’s perimeter; develop an integrated approach to conflict and crises; promote peace and integration; display a commitment to multilateral systems; and promote sustainable development and respect for human rights.[6]In addition, the strategy explicitly highlighted the direct connection between European prosperity and Asian security since European trade and investment in Asia depended on stability in the region. The progress of the EUGS has been reviewed through annual implementation reports, and there have been calls to develop and promulgate a new strategy aligned more with the changing environment and challenges.[7]
Around 80 percent of the goods entering the EU transit through the Indian Ocean, and hence the security of transit routes, freedom of navigation and the rule of law are critical for the grouping.[8]The European Union Maritime Security Strategy (EUMSS) was adopted in June 2014 after much deliberation, with an action plan agreed upon in December 2014 under five key areas: maritime awareness; capability development; risk management, protection of critical maritime infrastructure, and crisis response; research and innovation; and education and training.[9]The action plan was revised in June 2018 to include regional responses to global challenges in the maritime domain. The EUMSS and its attendant action plans had a significant role in mainstreaming maritime aspects, with maritime security accorded high priority, in EU policies and engagement with other regions, particularly the western Indian Ocean.
Security Cooperation
In the post-Cold War period, the EU drew comfort from a repurposed North Atlantic Treaty Organization (NATO) and limited its security cooperation in distant regions. It saw principal threats from a revanchist Russia, Islamist terrorism, civil wars and insurgencies in its periphery, West Asia and North Africa, and migration.[10]However, in the last decade, there has been an increased recognition that security and stability in the Indo-Pacific region directly impact European security.[11]Diplomatic engagement with Asia was stepped up through multilateral and bilateral mechanisms, including the Asia-Europe Meeting (ASEM). The EU also participates in the Association of Southeast Asian Nations (ASEAN) Regional Forum and East Asia Summit, is an observer at the South Asian Association for Regional Cooperation, and collaborates extensively with the African Union and the Indian Ocean Rim Association. The EU also has strong bilateral partnerships with Japan, South Korea, China, and India. The EU has participated in military operations in West Asia and North Africa under the NATO umbrella or coordinated under the Common Security and Defence Policy, with voluntary participation by the national militaries.[12]
The EU has provided the bulk of funding to the Indian Ocean Commission (IOC), which was created in 1982 and institutionalised in 1984, and currently comprises five island-nations (Comoros, Réunion Island, Madagascar, Mauritius, and Seychelles) and seven observers, including the EU. Since 2005, maritime security is a key part of the IOC-EU partnership, with a special focus on Eastern and Southern Africa and the Western Indian Ocean.[13]In 2018, the EU launched the Maritime Security programme to strengthen capacity-building and information sharing with countries in eastern and southern Africa and the Indian Ocean.[14]This was followed by a comprehensive declaration on maritime security in the western and southern Indian Ocean in June 2019.[15]The EU also funds several regional programmes in the field of sustainable fisheries, port security and maritime infrastructure in the western Indian Ocean region.
Under the EUMSS, member countries were encouraged to deploy their naval assets to strengthen maritime security against increasing threats. Although high-level dialogues on maritime security were instituted with ASEAN, India and China, the western Indian Ocean was the primary area for EU naval presence and deployments. The EU launched its first naval operation under the EU Naval Force (EUNAVFOR) in Somalia in 2008 (Op Atlanta) to protect shipping heading to and from that country.[16]The scope of the mission was later expanded to include counterpiracy. In Somalia, the EU has also sustained capacity building and training missions. European naval ships also participate in US and NATO-led task forces in the western Indian Ocean. The EU’s approach to security in the last decade or so focused on threats such as terrorism, piracy and armed robbery, organised crime and unlawful acts, illicit trafficking of arms, narcotics and humans, illegal financial flows, illegal and unreported fishing, and maritime militia. Other challenges like marine ecology, biodiversity, climate and environment were also often included in discussions on security.
Economic Imperatives
In conjunction with the US, Europe played a major role in shaping the post-1945 trading system and in the promulgation of the General Agreement on Tariffs and Trade in 1947. Numerous rules and norms related to trade were progressively made binding for EU member states through legislation. The normative roots of a rules-based system can also be seen in the EU’s economic integration and single-market principles. Due to the nature of its structural and legal provisions, the EU cannot follow power and threat-based trade policies like the US, nor can it undertake large-scale strategic investments like China.[17]Any major structural change in the current trading system based on US or Chinese approaches can jeopardise Europe’s economic stature and interests. Accordingly, in 2021, Brussels updated its trade policy to emphasise “open strategic autonomy,”[18]which aligns well with the free and open Indo-Pacific construct as it continues to focus on preferential trade agreements with developed and middle-income economies and economic partnership agreements with developing countries. The EU’s Market Access Strategy[19]is meant to create the best possible conditions for European firms, intellectual property rights protection, and dispute settlement. It tracks trade and investment barriers through annual reports and supports the reform and strengthening of the World Trade Organization (WTO).
As a block, the EU is the world’s largest trader of manufactured goods and services (see Figure 1) and ranks first in inbound and outbound investments.[20]
Figure 1: Global Trade in Goods and Services (2009-2019)
Source:Adapted from the European Commission’s DG Trade Statistical Guide, August 2020
However, the EU’s share in global trade declined from 18.1 percent in 2009 to 16.4 percent in 2019 (see figure 2) despite an average growth of 6 percent over the same period.
Figure 2: Percentage Share in Global Trade (2009-2019)
Source:Adapted from the European Commission’s DG Trade Statistical Guide, August 2020,
EU-China trade has seen a significant increase since China joined the WTO in December 2001, with the EU’s exports in goods increasing by over 10 percent and in services by over 15 percent per year. Imports also grew rapidly, with the EU’s trade deficit rising to US$200 billion.[21]The EU is now China’s largest trading partner, and China is the EU’s second-largest. Rising concerns about China’s trade and investment policies and its disregard for human and labour rights changed European perceptions of the Belt and Road Initiative. A broader hardening of political stances has contributed to the delay in ratifying the EU-China Comprehensive Agreement on Investment (CAI). However, an in-principle agreement was inked in December 2020 between the two sides with the incorporation of several safeguards.[22]Nevertheless, the EU must continue cooperation with China, particularly in trade, investment and climate change.
The EU also has high trade volumes with Japan, South Korea, India, Singapore and Australia (see Figure 3 for a comparison of the EU’s total trade with these five countries, and China and the US).
Figure 3: Total EU Trade in 2019
Source:Adapted from European Commission’s Trade Statistics
The EU has signed regional trade agreements with Indo-Pacific countries like South Korea (2011), Singapore (2019), Japan (2019) and Vietnam (2020), and economic partnership agreements with the Pacific states (Fiji, Papua New Guinea, Samoa, and the Solomon Islands). The EU will reap significant economic benefits from the existing pacts, and potential trade deals with ASEAN and South Asian countries and the four Quad states (India, Australia, Japan, and the US).[23]
Connectivity
In 2014, the EU gave fresh impetus to its approach to connectivity through discussions with China and in the ASEM. In October 2018, the European Council adopted the ‘Connecting Europe and Asia – Building Blocks for an EU Strategy,’ which was developed around four pillars—energy, transport, digital, and people-to-people links—and aimed for sustainable, secure and smart connectivity.[24]The strategy also aimed to enhance trade and investment under the existing and evolving rules- and norms-based framework.[25]The EU’s value proposition on connectivity focuses on trade, business and finance flows that are sustainable, comprehensive and rules-based. In September 2019, the EU’s first partnership on connectivity was finalised with Japan.[26]In the joint ministerial statement issued in December 2020, the EU and ASEAN outlined the objective to promote connectivity between the two regions.[27]This was followed by the EU-India Comprehensive Connectivity Partnership in May 2021 to support “resilient and sustainable connectivity projects” in India and other regions such as Africa, Central Asia, and the Indo-Pacific.[28]
The EU’s Indo-Pacific Plan
In many ways, the EU’s new Indo-Pacific strategy is a progression of the EUGS, EUMSS, and other region-, country-, and sector-specific strategy documents.
The new Indo-Pacific strategy emphasises that the EU will reinforce its strategic focus, presence, and actions in that region. It stresses the need for a long-term perspective while retaining adequate flexibility, and highlights seven priority areas: sustainable and inclusive prosperity; green transitions; ocean governance; digital governance and partnerships; connectivity; security and defence; and human security.
The joint communication states that “intense competition, military build-up and increasing tensions in hotspots such as the South China Sea, the East China Sea, and the Taiwan Strait, directly impact European security and prosperity.”[29]Notably, France is the only EU member country with a regular naval presence in the wider Indo-Pacific region. As a resident power with island territories in the Indian Ocean and the Pacific Ocean, France has been deepening its maritime security cooperation with countries in the region, and maintains a military presence in the UAE, Djibouti, Réunion Island, Mayotte, New Caledonia, and French Polynesia.[30]It has also delineated joint regional commands and maritime zones in both oceans and has conducted regular naval deployments and exercises in the region. Furthermore, France was the first EU country to outline a vision for the Indo-Pacific in 2018,[31]and a strategy in 2019.[32]It has long urged for a comprehensive European approach to the Indo-Pacific,[33]and will likely be a torchbearer of the EU’s military presence and deployments in the region in the near to medium term.
The new strategy document also refers to an increase in hybrid threats, and stresses that the Indo-Pacific region is vital for mitigating climate change and protecting the delicate ecological balance.
On China, the document states that a multifaceted engagement and the CAI will be mutually beneficial but adds that the EU will continue to “push back” where required. The EU’s overall China strategy seeks to address some trade challenges through defensive measures and suitable balancing with transatlantic cooperation with the US.[34]
Within the Indo-Pacific, the EU has major trade and investment relations with many countries. According to the September 2021 joint communication, Europe and the Indo-Pacific account for over 70 percent of global trade in goods and services, and over 60 percent of global foreign direct investment flows. The strategy also indicates plans to conclude trade agreements with Australia and New Zealand and make progress on trade talks with Indonesia, India, Malaysia, the Philippines, and Thailand and the economic partnership agreement with the East African Community.
The new strategy considers connectivity as a key driving force in its outreach to the Indo-Pacific region, and a key tool for cooperation in the 21stcentury, and identifies Japan, India, and the ASEAN as “core Indo-Pacific partners”.
When seen in comparison with the Indo-Pacific strategies and outlooks of other countries, the EU’s strategy has several distinct features:
Wide Scope:While the focus is on the Indo-Pacific, the EU’s new strategy seeks to position the EU at the global stage, emphasising strategic autonomy. Different sections of the plan cover a vast space, with the priority areas necessitating initiatives and actions over a very broad range. These are sought to be progressed by building upon the existing partnerships and mechanisms and through new partnerships and arrangements.
Multilateralism:The new strategy is predicated on strengthening the existing multilateral rules-based order to address threats and challenges from intense geopolitical rivalry and competition in the Indo-Pacific. It stresses that the EU’s engagement with the region will be principled and long term. Key principles include rules-based international order, inclusive and effective multilateral cooperation, and respect for democracy, human rights, and the rule of law. Another principle underlined is the promotion of a level-playing field and an open and fair environment for trade and investment. Many partners in the region, including the ASEAN and India, are likely to welcome this approach.[35]
Geographical Area:In another variation, the interpretation of the geographical expanse of the Indo-Pacific region is indicated as the area from the east coast of Africa to the Pacific Island States. The overall geographical focus is balanced on the Indian and Pacific Oceans. Africa and the western Indian Ocean find prominence.
Inclusivity:The strategy aims to deepen regional engagements, particularly with “partners that have already announced Indo-Pacific approaches of their own”.[36]This includes the ASEAN, Australia, India, Japan, New Zealand, South Korea, the UK and the US. This could prompt other countries to issue their outlooks/strategies for the region, and keeps the door open for those opposed to the Indo-Pacific construct, including China. The inclusion of the word ‘cooperation’ in the title, the emphasis on flexibility and inclusiveness,[37]and the suggestion of further dialogue on the EU-China CAI indicate a keenness to involve—and not exclude—China.
Sustainability and Green Transitions:Sustainable and inclusive prosperity and green transitions have been accorded a high priority. Partnerships with countries in the Indo-Pacific to combat climate change and environmental and biodiversity degradation have been emphasised as key objectives. This is likely to significantly enhance interactions at the levels of governments, the private sector, technology, and financial institutions.
Leveraging the EU’s Strengths: The strategy seeks to build on existing EU strengths, including consistent support for multilateralism, current and potential trade levels, investment and connectivity, and alignment with global issues like climate action, health and gender equality.
Maritime Domain:The strategy includes a strong maritime focus under the security and defence priority area. Like other strategies and outlooks on the region (such as those of Australia, India, Japan, the US, France, Germany, the Netherlands and the ASEAN), it stresses free and open maritime supply routes in compliance with international law and the need for capacity building. However, it attempts to distinguish between the Indian Ocean and the Pacific Ocean from the governance and partnership perspectives and underlines the EU’s priorities in the western Indian Ocean and Africa. The joint communication mentions that major waterways in the region, including the Malacca Straits, the South China Sea, and the Bab-el-Mandeb Strait, are vital to the EU. The strategy emphasises engagement with the Small Island States in both oceans and acknowledges the need for a meaningful European naval presence in the Indo-Pacific region. It also seeks to enhance cooperation on ocean governance, including marine conservation and sustainable fishery partnerships.
Implementation Challenges
The joint communication outlines a key action plan to implement its agenda. A more detailed, pillar-specific action plan may be expected in the coming months. However, the implementation of such an elaborate action plan could face some challenges, such as:
Resource Allocation:Given the scope, the action plan will require an alignment between the material and discursive dimensions of the strategy. A broad-based mobilisation of finance, including from Global Europe’s Neighbourhood, Development and International Cooperation Instrument and the public and the private sector, has been indicated. The finalisation and allocation of financial and other resources for the agenda will need to be processed through deliberations with diverse institutions and stakeholders within and outside the EU. Financial institutions, both public and private, could face roadblocks due to competing priorities.
Consensus-Based Political Will:The EU’s adoption of the Indo-Pacific strategy is significant as it represents a commonly accepted position. The implementation plan includes developing relevant standards and regulations, progressing on trade negotiations, and concluding new agreements and partnerships. The EU member countries need to have a united approach and consensus while building on the action agenda, but a recent survey by the European Council on Foreign Relations (ECFR) indicates that 27 member states are not in complete agreement on some crucial issues.[38]For instance, while Germany and Spain are keen to bolster the EU military presence in the Indo-Pacific, Ireland and Greece are not motivated by it, and Hungary wants no security presence.
The China Factor:The EU’s Indo-Pacific strategy may have a significant constraining influence in its dealings with China. Eighteen EU countries are members of the Belt and Road Initiative, and in 2016, Greece, Hungary and Croatia had opposed the EU’s firm declaration against China’s maritime claims.[39]The inclusion of China in the EU’s conceptualisation of the Indo-Pacific has been debated in Europe,[40]and the challenge is compounded by China’s opposition to the Indo-Pacific framework.
The joint communication states that the EU seeks a multifaceted engagement with China while pushing back where required. Efforts to maintain a fine balance between standing up to China and promoting cooperation—particularly economic—will continue to be a key challenge. As per the ECFR survey, 13 member states, notably Ireland and Slovenia, see China as a key partner, and 41% of EU countries will support a free trade pact with China or a regional one that includes it. On the other hand, five countries, notably Latvia and Belgium, see the Indo-Pacific as an anti-China strategy, while 48% do not want any free trade deal that includes China.[41]
Naval Presence:Given the limited capacity of all EU countries’ naval forces (barring France), enhancing and sustaining a naval presence and deployments beyond the western Indian Ocean will be difficult. While France can be supported in increasing its basing and deployments in the region, visibility under the EU flag and command—much like the EUNAVFOR—will be an uphill task.
Enhancing Appeal of the European Narrative:The EU is keen to push forward a narrative that is distinctly different in economic, political, security, connectivity, and environmental domains. It emphasises strategic autonomy while dealing with the present and emerging challenges. Enhancing the appeal of this new narrative will require sustained efforts in light of other key narratives in areas like global governance, limitations of multilateralism, infrastructure and connectivity, and deterrence and counter-coercion strategies related to China.
Conclusion
The EU’s adoption of a comprehensive strategy on the Indo-Pacific, driven by its long-term strategic and economic interests, is a major development that can have significant geopolitical impacts. It reflects the EU’s efforts to promote a rules-based order and a transparent trading and investment architecture that favours European economic and political imperatives. A connectivity strategy integrated with the EU’s broader geoeconomic outlook and partnerships could see wider acceptance as a viable alternative. The plans for green partnerships, new trade agreements, reconfiguring value chains and addressing human security cooperation (including health) seek to leverage the EU’s strengths and multilateral approach.
The EU’s defence and security deployments remain restricted to participation under the NATO umbrella and the sustained presence in the western Indian Ocean region. The capacity to extend this to the wider Indo-Pacific region is limited, and the bulk of naval deployments to the region may be taken up only by France. Maritime security, with an equal emphasis on traditional and non-traditional threats, is a dominant theme, and the strategy seeks to align the imperatives in the maritime domain with EUMSS.
The EU’s Indo-Pacific strategy has a wide scope, covers a range of areas, and has many distinctive features. It emphasises inclusivity with a non-confrontational approach. It indicates an intent to cooperate with China in some key areas on mutually acceptable terms. The implementation of the strategy will likely face significant challenges due to the extensive agenda, the need for building and sustaining consensus at each step, and maintaining a balance in engagements. Nevertheless, if elements of the strategy are acted upon as outlined, the EU’s partnerships and active role in the Indo-Pacific could be a key contributor to stability, the rules-based order, addressing common challenges, and promoting security and development in the region and beyond.
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Vice Admiral Girish Luthra is Distinguished Fellow at Observer Research Foundation, Mumbai. He is Former Commander-in-Chief of Western Naval Command, and Southern Naval Command, Indian ...
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