The US-China relationship is one that both sides have historically been very reluctant to let others break into. For the United States, this is motivated by a sense that as the world’s most powerful military and economic player it does not need to work in concert with others, except in areas where it has a leadership role, or where multilateralism works for it. In recent years, meanwhile, China has been seeking the appropriate status for a country now risen to the world’s second largest economy, and one that seems to be poised to rank beside the US as the principle global power of the century. As a result, China is very insistent that it has the right to talk directly to the US, as an equal, with no one else involved.
The European Union differs from both countries in terms of its identity—currently 27 member states rather than a single unified one—and its lack of any substantial hard power (there is no EU standing army for instance). So even though as a market, and in terms of per capita GDP, it is ranked as the largest in the world, this merely gives it an economic relevance to the other two. That, so far, has failed to translate into a powerful enough reason to allow it to break into Sino-US relations and create anything resembling trilateralism.
However, a number of factors have started to change this, making US-EU collaboration on China more likely. This is most clearly shown by the establishment, to Beijing’s irritation, of a US-EU Dialogue on China in October 2020—the first move to formalize a specifically China-related discussion between the European External Action Service (EEAS), the diplomatic arm of the EU, and the US State Department. In some sense, it mirrors the High Level Economic and Trade Dialogue between the EU and China, the eighth of which was held in July 2020, and the US-China Strategic and Economic Dialogue, established under President Barack Obama in 2009, and renamed the “US-China Comprehensive Economic Dialogue” in 2017. The US-EU Dialogue finally provides what had, until 2020, been a missing link in relations between the world’s most important economic players.
The Pandemic Effect
The most powerful contributing cause of this newfound willingness of the US to start to speak to the EU more about China was the COVID-19 pandemic, and the growing sense, even in the anti-multilateral administration of Trump, that China was posing questions that were now large and significant enough for Washington to need to start working in concert with others. Even so, the announcement of the Dialogue was still a surprise. As the US-China trade war gathered pace over 2018 and into 2019, there were times when Washington was the one posing common problems for both Brussels and Beijing, and seemed to be bringing these two closer to each other. The imposition of tariffs on European steel in 2018 was one case—something that continued with various other tariffs applied through 2020.
However, the brief opportunity this offered to China, which was also suffering a raft of punitive measures from the US, to perhaps insert itself as a potentially less problematic partner for Europe came and went. Then president of the European Commission, Jean-Claude Juncker, undertook at visit to Trump in July 2018 and managed to secure a deal calling off the most serious of the US measures proposed. In Beijing’s eyes, the Europeans once more fell pliantly back into the US’ arms.
China proved a less biddable opponent than the EU for the US. While America achieved a first stage agreement on some issues—access to the Chinese market in services, for instance, and greater protection for Intellectual Property Rights—in January 2020, the pandemic, as it spread across the world over the rest of that year, placed immense strains on what was already a fraught bilateral relationship. When it comes to this issue, the US has been willing to talk to others and bring them into the conversation. That most definitely includes the EU, which was viewed by Trump’s final Secretary of State Mike Pompeo as an ally against the greatest enemy his country was facing—Communist-led China.
With the arrival of Joe Biden as 46th president in January 2021, the question is how deep and enduring this dialogue about a common problem actually is. European countries have certainly hardened their attitude toward issues like whether or not to accept Chinese telecoms company Huawei, and there are significant constituencies in Germany, Italy, and France, and in the smaller members like the Czech Republic and Poland, that are profoundly worried about China’s newfound geopolitical power, and its behavior toward Xinjiang, Hong Kong and, eventually, Taiwan. But what hasn’t changed is the simple fact that for all its talk about values and the importance of representing democratic principles, most of the EU’s leverage is in the economic realm. And there, the impact of the pandemic has left it severely weakened, with the likelihood that it will need to look with renewed urgency at the opportunities for job creation and growth that engagement with China offers.
A Political Price Tag?
That will create tension with the US, which is in a slightly different position. Its options economically are perhaps broader—in 2020 it was able to achieve at least some measure of a recovery toward the end of the year, though the situation in 2021 still looks troubling. The drafting of a bilateral Comprehensive Agreement on Investment (CAI) between Brussels and Beijing after seven years of negotiations on the final day of 2020 drew criticism from Washington. This deal still requires ratification by the European Parliament. But in many ways, it shows how the EU’s interests can all too easily diverge from the US when it comes to China.
Most of the objectives of the draft deal were to finally open up the very sectors of the Chinese economy—services in particular—that served the EU’s interests best, and looked to be finally becoming more available for its companies. Giving up a route to getting into these sectors after so much effort looked perverse and self-defeating. The question, unanswerable until the deal is agreed and then implemented, is whether in fact it will carry an unstated political price tag—China will allow greater access to itself and more benefits for the EU, only if the EU does not seek to pick political fights with it. That would be an immediate cause of argument with the US.
The China Challenge
The new posture between the US and EU however is a pragmatic, and therefore welcome, acknowledgement that China poses questions that neither can answer on their own, and that there is a need for a much more in-depth discussions between them about this issue. Effort needs to be put into working out much more clearly the areas where the two agree, and accepting areas where there might be divergence, and then finding ways to manage this.
This will be made easier by the fact that Brussels is now more likely to move closer to the US’ hardline stance. In 2019, it named China a “systemic rival,” a phrase that recurred throughout 2020. The European Commission paper on China issued in March 2019, in which the phrase above was first deployed, contained a long list of areas of concern, from security-related ones like access by Chinese companies to critical infrastructure through investment, to unfair trade practices and a general lack of economic reciprocity. This was very similar in tone and content to the State Department’s “The Elements of the China Challenge” issued in November 2020. Despite occurring after years of Trumpist disruption to the global rules-based order, this paper contained a key recommendation to work with like-minded allies:
“The United States must strengthen its alliance system by more effectively sharing responsibilities with friends and partners and by forming a variety of groupings and coalitions to address specific threats to freedom while, in cooperation with the world’s democracies and other like-minded partners, reforming international organizations where possible and, where necessary, building new ones rooted in freedom, democracy, national sovereignty, human rights, and the rule of law.”
The necessity of the EU and China working together is simply due to a shared sense that it is in their self-interest to do so. Even with the CAI agreement, Brussels is more likely to get the things it wants from China—better and more reciprocal trade and investment arrangements, more protection for intellectual property, more willingness to observe a rules-based global system—if the US is standing beside it. The US, too, is clearly now in the business of recruiting like-minded political and security allies to its side.
There is, therefore, congruence as never before. The question is whether the depth of US ideological opposition to China is something that the EU will feel equally committed to. The EU, after all, contains countries like Greece with a far more favorable view of China than any current party in the US. This is the most likely direction from which a disruption to the new partnership on China is most likely to come between the world’s two most important supporters of democratic values.
Kerry Brown is a Professor of Chinese Studies at King’s College London and Director of the Lau China Institute.
