Judah Grunstein
The recently concluded investment agreement between the European Union and China highlights how the concept of European strategic autonomy has moved beyond the security realm from which it emerged. This broader approach applies a geopolitical lens to how the EU should wield its already considerable geo-economic power. But the rush to finalize the deal in the weeks before Joe Biden’s incoming administration took office also suggests that, in demonstrating a greater willingness to pursue and defend its interests uninhibitedly, the EU is still clumsily growing into its newly adopted posture.
The irony of the debate over Europe’s ability to act alone when necessary is that it has always been framed by its relationship with the United States, and often driven by the state of trans-Atlantic ties at any given moment. For obvious reasons, that debate took on added significance, and urgency, during the four years of Donald Trump’s presidency. Trump’s hostility to NATO resurfaced longstanding debates about European defense spending and preparedness, while highlighting for many observers—particularly French President Emmanuel Macron—the need for an autonomous European defense capability, whether as a European pillar within NATO or under EU auspices.
Most recently, French President Emmanuel Macron engaged in a high-profile and very public war of words with German Defense Minister Annegret Kramp-Karrenbauer over strategic autonomy as it pertains to European defense capabilities. As Ulrike Franke observed, both argued for increased defense spending and preparedness. But the crux of their disagreement, as usual, hinged on how to situate Europe with regard to the U.S.: Whereas Macron wants to improve European military capabilities so that Europe needs America less, Kramp-Karrenbauer wants to improve them so that America needs Europe more.
In any event, despite some embryonic advances over the past few years on collectivizing defense-industrial investment, European strategic autonomy in security and defense remains more aspirational than realistic—and will for the foreseeable future.
The real game-changer for trans-Atlantic relations during Trump’s presidency was what he did economically. The tariffs he slapped on European aluminum exports and threatened on automobiles, and the secondary sanctions he applied on trade with Iran, served as even more of a wake-up call for the need to expand the conceptual framing of European strategic autonomy.
Periodic trade tensions between Europe and the U.S. are nothing new, even if it was a shock to see unilateral and arbitrary tariffs threatened and applied against allies. But because trade is at the heart of the EU’s competence, the bloc defended itself well against those tariffs. More infuriating to European leaders was Brussels’ impotence in countering unilateral U.S. sanctions against Iran to save the multilateral nuclear deal that the bloc had invested significant diplomatic capital to negotiate.
The irony of the debate over Europe’s ability to act alone when necessary is that it has always been framed by its relationship with the United States.
This explains why, just this week, EU foreign policy chief Josep Borrell explicitly included the strengthening of the international role of the euro in his definition of European strategic autonomy—a priority that Nathalie Tocci, Borrell’s special adviser, also mentioned last month in an interview for WPR’s Trend Lines podcast. However, achieving “dollar autonomy” will be a long-term effort, especially given the structural flaws that still undermine confidence in the euro as a global reserve currency.
In the meantime, the EU will continue to have more cards to play when it comes to trade disputes, as with Trump, and trade negotiations, as with the investment deal with China. The manner in which that deal was finalized signals the EU’s increased willingness to act autonomously. Whether it demonstrates good judgment is up for debate.
Negotiations for the agreement, intended to increase access and level the playing field for European firms operating in China, have dragged on for eight years. As recently as June, it seemed like both sides had given up on trying to narrow the gaps in their respective positions. That changed quickly in late December, when China abruptly made a number of concessions and the EU just as abruptly agreed to finalize the agreement.
That China might have felt some urgency to conclude such a deal before Biden entered office was understandable. Biden has promised to work with America’s European allies to formulate a coordinated approach to China’s unfair trade practices, something Trump never did.
More surprising was the EU’s willingness to forge ahead with the deal, even after Biden’s incoming national security adviser, Jake Sullivan, took to Twitter in late December to express the administration’s strong desire to talk things over first. After four years of lamenting the state of trans-Atlantic ties under Trump, Europe seemed curiously eager to snub a new administration in Washington promising to repair them.
In fairness, Trump had not hesitated to sign the “phase one” trade deal with China in January 2020, which in addition to guaranteeing Chinese purchases of a range of U.S. goods also locked in similar concessions on market access and level playing field for American firms operating in China. And even according to critics of the EU-China deal, like Theresa Fallon and Francois Godemont, it did result in real gains for European firms’ ability to access and operate in the Chinese market, even if those conditions remain asymmetric compared to Chinese firms operating in Europe.
Where they and others fault the deal is in its failure to secure tougher guarantees against the use of forced labor in China, particularly in Xinjiang. They also argue that it will be hard in practice to hold China to the concessions it has made on paper, although others, like Shiro Armstrong and Evgeniia Shannon, are more sanguine.
But above all, critics of the deal have pointed to the signal it sends both to Beijing and Washington: to Beijing, that the EU can be peeled away from alignment with the U.S.; and to Washington, that the EU, despite its security dependence on the U.S., is an unreliable partner in what American policymakers see as the defining strategic competition of the 21st century.
It’s impossible to say whether the EU might have gained greater concessions from China by engaging in multilateral talks based on a coordinated position with the Biden administration. But Brussels’ insistence on closing the deal without even hearing Biden’s proposals makes it seem like strategic autonomy, or at least a demonstration of it in practice, was an end in this case, rather than a means to an end.
It could be the EU was wary of another pitfall. If Trump made clear the danger of depending too much on America for its security, the arrival of Biden’s more conventional administration poses the opposite risk for proponents of European strategic autonomy: that of complacency and the temptation of once again using the trans-Atlantic partnership to avoid hard questions over Europe’s place and role in the world. Those questions are more relevant than ever for advocates of European strategic autonomy, on both sides of the Atlantic.
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