Insight and Analysis from Foreign Affairs Practitioners and Scholars

Established 1996 • Beatrice Camp, Editor

by Mikael Barfod

Donald Trump has regularly chipped away at multilateralism during his three years in power: climate change, trade wars, immigration, withdrawal from international conflicts, ambiguity about defence alliances, and even suspension of the US budget for the World Health Organization, to mention a few. EU policy, on the other hand, has always supported the UN and the multilateral approach. A traditionally open and liberal EU has a clear self-interest in preserving multilateralism. Could the EU (as I have previously argued[1]) still take the lead in forming effective international alliances to reactivate and possibly even reform multilateral structures? How can Europe take “its destiny into its own hands” as Angela Merkel suggested recently? Well said, but she is retiring in a year and a half. And meanwhile, what has the coronavirus done to Europe’s destiny? Let’s look at today’s main challenges and opportunities.

Relations with the US

Arguably, Trump’s gradual dismantling of multilateralism will accelerate if he is re-elected in 2020. This time, unlike 2016, Europe should be prepared. Even if a Democrat did win, the damage done by Trump would not necessarily be undone. Populism will affect US policies for years to come. Protectionism is rife in the Democratic party, not least with the left-wing of the party. Even a liberal Democratic President would be wary of undoing Trump’s policies on trade and immigration and his withdrawal of military commitments abroad, for fear of mid-term elections and fuelling the next “Donald Trump”. Left-leaning parties in Europe have embraced similar tactics, e.g. on immigration. The EU must rally around a liberal world agenda without waiting for the US elections. Action must cover climate and free trade, including a restructured World Trade Organization (WTO) capable of handling state-capitalist countries. Europe gradually must forge independence of the US in defence, starting with procurement (even within NATO). In matters of intelligence, the US fuss about Huawei should be countered by concerns about US government access to European secrets through its own tech giants, practices revealed by the whistle-blower Snowdon.

Relations with the UK

With Brexit, the EU loses an important fighter for multilateralism and liberalism. Or does it? The UK will soon realise how small it is as a maker of trade deals, not just with the EU but with the rest of the world. If there is one thing a UK outside the EU will continue to support, it is multilateralism – the outer layer of protection of British economic relations with the rest of the world, not least if a trade deal fails with the EU. British liberal and democratic values will also discover that they match mainstream European values. The UK really risks losing control if it does not team up with European initiatives to preserve and reform multilateralism. Working with France and the non-permanent European members of the UN Security Council would be a wise place for the UK to start. Reactivating the WTO and fighting for the climate would be another. The UK has already shown that it is closer to Europe than the US over the nuclear deal with Iran (where it has investment opportunities), and on allowing Huawei to supply 5G network equipment to the UK.

Relations with China & Russia

As major powers, China and Russia want revised standards for human rights, democracy and control – both for their citizens and within their respective spheres of influence. They try to affect elections through cyber-attacks and social media. The EU should use its economic power and soft approach to contain this aggression.

Trade remains key to both Chinese and Russian economies. The EU should continue to resolutely discourage tariff wars and, indeed, try joining forces with the US in negotiating a more balanced trade relationship with China encompassing services, ownership of technology and investments. If the EU succeeds in signing a trade deal with the US, and the latter eventually decides that its interests are best served by re-joining the Trans Pacific Partnership (TPP) agreement, the combined negotiating power of these trade deals would be 70% against China’s mere 20% of the world’s GDP[2]. Such negotiating power could persuade China to enter serious multilateral agreements rather than their preferred bilateral trade deals (such as those within the Belt and Road Initiative). The EU should persistently highlight and reward green approaches in its economic relations with China and Russia.

Rallying potential allies

Countries with a strong interest in free trade and sharing liberal values, e.g. Japan, ASEAN, Canada, Mexico are obvious allies. But to be effective the EU should also attempt to attract loyal allies to the EU agenda when it comes to supporting single issues, not least regarding the climate.

Internal unity

European unity remains our biggest challenge – both amongst EU governments and within their populations – exemplified by Brexit. Ours is still the existentialist question of what Europe really wants. Disunity amongst EU-27 affects important areas of EU’s external policies from Libya, enlargement in the Balkans, and relations with Russia, to Turkey and China, migration, and European defence. Unlike his predecessor, new EU Foreign Policy Chief Joseph Borell and his colleagues in the Commission should focus their energy much more on a few key issues in EU foreign policy where the EU can make a real difference e.g. relations with US, China, Russia and hotspots in the Middle East. In another source of disunity, the next EU budget framework, discussion should be first about goals before determining the size of the budget. Finally, defending liberal values, democracy and multilateralism is part of the European raison d’être. The EU must find the strength to maintain these principles internally, if necessary, by withholding structural funds from offenders within the union, like Hungary and Poland.

Visions

Macron is dynamic and has daring visions. They will not bear fruit within the EU without the moderating force of a strong German Chancellor. Many issues regarding internal unity and perception of the EU’s external strength will fall in place with the right successor to Merkel. Let’s hope CDU/CSU decision-makers see it thus.

COVID-19

Almost out of nowhere, this virus now affects all of Europe’s relations. US and post-Brexit UK have become even more introverted as the virus progresses and demands the full attention of political leaders. China probably contributed to the spreading of the disease by not being sufficiently open about the initial infections on its own territory, but has nevertheless tried to profit internationally as the first country that successfully curbed infections. Countries such as Italy, Spain, the United States, and, to a lesser extent, France and the UK, have been too slow to react to advice from the World Health Organisation and quickly suffered the consequences with high death tolls in April 2020. Consequences for poor and weak countries without functioning health systems could be even worse and deserve international attention and help. And internally, the coherence of the EU is already suffering at two levels: solidarity and mutual help between the member states at the onset of the crisis were not worthy of a “union”.

Eventually a large economic rescue loan package was agreed by the EU at the end of April 2020. However, discussions on a long-term EU recovery fond have already revealed a distinct north-south division amongst EU member states: southern countries demand grants and cheap EU loans whilst northern, richer countries such as Germany, Netherlands, Finland and Austria hesitate to allocate major grants and in particular to use common EU “corona bonds” to “underwrite” poorer member states in the south. This division is potentially dangerous as it could affect the stability of the Euro (as it did after 2008 financial crisis) and indeed the EU itself.

To conclude

Strengthening multilateralism starts at home. EU institutions and leaders must now not only grasp what went wrong with public misperceptions about Brexit. They must also deal effectively with the fallout of the corona crisis. If anything, the COVID-19 crisis has reinforced the need for common EU monetary and fiscal initiatives to help the weaker countries in the Euro. And beyond Europe, aggressive coordination of economic measures to safeguard international trade and investments will be necessary to avoid the COVID-19 attack doing irreparable economic damage to the world economy.

The EU narrative is important in this context: trade and multilateralism were not the cause of the pandemic but are an inseparable part of the solution to fight the consequences of COVID-19 and to be better prepared for a future pandemic. More than ever, the EU needs to focus and to take chances beyond the current pandemic and beyond the electoral cycles of its member states. Once the Franco-German engine is up and running again with its proclaimed “Alliance for Multilateralism”, the EU must find the strength to defend, head on, international rules vis-a-vis the US, China and Russia.

“Soft” European trading and economic power still matters in deal-making and updating WTO structures, even if we are entering a period of “Westlessness”. The evolution of “fair” multilateral trade should gradually include more elements of rule-of-law to make trade more transparent and less conflictual. As defence priorities shift from numbers of tanks, fighters and missiles to data security, Europe should gradually prepare to take responsibility for its own defence, including digital investments and research as well as defence procurement, albeit initially within NATO. Successful economic and defence endeavours can gradually give Europe a larger say on human rights and democracy issues, just as the US once did. First, however, the EU needs to make itself fit to take on a world with less Western influence and unforeseen events, like pandemics —what I would call a new age of uncertainty.End.


Mikael Barfod is a former EU Ambassador and current Visiting Professor at the University of Huddersfield.

 

 

Notes

[1] E.g. in ”Can the European Union save Multilateralism?” in Europe’s World, Friends of Europe, 28 February 2019, https://www.friendsofeurope.org/insights/can-the-eu-save-multilateralism/

[2] Graham Allison: “TTP trade agreement could contain China”, Foreign Policy Magazine, Feb-Mar 2020

Comments are closed.