Trade Wars

Why connectivity can strengthen European sovereignty – European Council on Foreign Relations

The covid-19 pandemic, the global semiconductor shortage and the recent rise in energy prices show just how interconnected and vulnerable international trade has become. Germany has benefited enormously from this form of globalization. However, in a world where industrial finished products often contain components from hundreds of suppliers on different continents, a problem at one point in the global supply network – whether caused by technical difficulties, human error or simple sabotage – can have serious consequences.

The arteries that carry goods, finance and data across the world, as well as technical norms and standards, have long been hot spots for geo-economic rivalry and the exercise of political influence. China is ready for this kind of world, thanks to its large-scale investments in transport projects in Asia and Africa, and its acquisition of transport infrastructure in Europe, as part of the Belt and Road Initiative (BRI ).

The Trump administration was not the first government to use trade policy, sanctions, and punitive tariffs as a means of geo-economic confrontation. This, however, took trade wars to a new level with not only China, but also its close partners and allies. China responded by re-emphasizing the internal market in its economic policy; it now follows a “dual circulation” strategy which aims to strengthen the country’s resilience in the face of geo-economic risks.

The EU should signal that the smart, green and sustainable connectivity it advocates will not only strengthen economic ties, but will also strengthen peace and stability

As the effects of the rivalry between the United States and China clearly show, a smart connectivity policy is essential to strengthen the geostrategic competitiveness, sovereignty and capacity for action of the European Union. Economic considerations are by no means all that is at stake. Basically, it is about standing up for our values, working to improve sustainability and tackling climate change around the world. And just as important as the physical infrastructure, if not more, are technical norms and standards in areas such as mobile networks, Internet connections, container sizes and rail gauge. The EU will need to establish these norms and standards if it is to make its businesses competitive around the world and for imported goods to be safe and in line with European values ​​related to environmental sustainability and human rights in the manufacturing process. .

The EU’s Global Gateway

In her State of the Union address in September 2021, European Commission President Ursula von der Leyen announced the Global Gateway as a counterweight to the BIS. The European Commission unveiled its plans for the initiative on December 1, 2021, providing for the mobilization of up to € 300 billion by 2027. The initiative builds on several important measures taken by the Union in recent years years. For example, with its 2018 Strategy on Connecting Europe and Asia, the EU has demonstrated its willingness to cooperate with other regions to promote global, sustainable and rules-based connectivity. Partly thanks to Germany’s efforts, the EU has broadened this regional strategy into a global policy tailored to the opportunities and challenges of connectivity. But the bloc still has work to do to move towards smart, green and sustainable connectivity in Europe and beyond. In addition to a global perspective, we need cooperation and funding opportunities that are attractive to our partners and that strengthen Europe’s sovereignty.

To support this effort, the EU should signal that the smart, green and sustainable connectivity it advocates will not only strengthen economic ties, but also improve peace and stability in the world, and contribute to efforts to combat change. climate. All of these factors are essential to create a strategic environment that benefits Europe.

How to implement the Global Gateway

The following core principles should guide the development and implementation of Europe’s global connectivity strategy and the projects it selects and supports in this context.

Connectivity as a partnership

Due to its dependence on trade, the EU has an inherent interest in open, inexpensive and efficient connectivity. Such connectivity is only sustainable when investment projects and cooperation agreements are designed in a spirit of partnership and serve the interests of all parties.

The EU should apply its internal infrastructure financing rules and its covid-19 stimulus program to global connectivity projects. These rules – which cover areas such as transparency in public procurement, equal opportunities, anti-corruption and human rights – could help the union create a model to counter BRI in close cooperation. with like-minded partners, such as BRI members. G7. In some countries, BIS investments have been significantly lower than expected; in others, it has left governments with heavy debts and excluded national companies from important markets.

Indeed, many parts of the world still require large-scale investments in roads and connectivity hubs such as roads, railways and ports. In this regard, the EU should implement equitable connectivity projects that take into account the priorities of its partners. Such projects would help these partners access global markets for goods and services, improve mobility and stimulate economic activity. To maintain a spirit of partnership, the EU should combine traditional infrastructure policy with support for innovative technologies.

Connectivity as an opportunity

Smart, green and sustainable connectivity is essential to protect the climate and reduce greenhouse gas emissions, especially in transport and logistics, energy production and supply, urban planning and infrastructure. The EU is already engaged in major efforts in these areas, in particular within the framework of its regional policy. Germany is also helping a number of countries tackle the effects of climate change through projects such as its Central Asia and Green Central Asia Water Initiative, which have provided around 40 million euros. funding for the cooperative management of water, biodiversity and sustainable agriculture in the region since 2008. The EU and Germany are working internationally to develop climate-neutral energy production, as well as to build infrastructure that can bring green energy to consumers. It requires strategies and structures that involve local businesses, private capital and development banks.

If the EU aligns its connectivity initiatives with the principles of green recovery, it will extend the reach of its ambitious climate policy well beyond its own borders. This could be particularly beneficial in developing countries, where flagship projects could show how economic growth does not have to lead to increased harmful emissions.

Connectivity as European sovereignty

As we have seen, the EU will only retain its influence if it retains the ability to shape technical and product standards essential to the global interoperability of systems in areas such as mobile communications and supply chains. integrated. Other players – including China – have announced their goal of setting these norms and standards. A sovereign Europe cannot afford to be sidelined in this area.

Sovereignty does not mean the ability to do everything alone. Rather, it means the ability to achieve political goals alongside like-minded partners. This in turn implies support for these partners in the modernization of their infrastructure. To harness the potential of young and innovative populations in Africa and Asia, the EU should generate creative ideas for online education and promote access to fast and free data feeds, which allow participation in the global digital economy. This will require improvements to digital infrastructure such as mobile networks, satellite communications and server capacity. However, it also requires an attractive proposition for regulatory connectivity – a set of standards that govern the protection of personal information and the transmission and storage of large volumes of data.

Thanks to the size of its internal market, the EU has been able to set benchmarks and show leadership in this area. In the competition to develop the best connectivity strategies in the 21st century, the union benefits from the influence it wields as a major regulatory power as much as the amount of funds it deploys for the expansion of physical infrastructure.

Given the enormous global importance of the problem, Germany is now pushing for smart, green and sustainable connectivity within other international institutions as well. These include the Organization for Security and Cooperation in Europe, which made connectivity a priority for the first time under the German Presidency, in 2016. The effort also involves German and European policy in l ‘Indo-Pacific and Southeast Asia. Germany put the issue of maritime trade and connectivity on the agenda in 2017 with a conference of regional ambassadors in Sri Lanka.

The ability to maintain a competitive position in this area will not only depend on the number of kilometers of road built or the gigawatt hours of electricity produced. It will also depend on the vision behind these investments, the norms and standards with which they are aligned, and the political ambition with which they are made.


Miguel Berger is State Secretary at the German Foreign Ministry.

The European Council on Foreign Relations does not take collective positions. ECFR publications represent the opinions of its individual authors only.