What You Need to Know About the I2U2

Daniel Markey, Ph.D.; Ambassador Hesham Youssef

Source Link

As part of his visit earlier this month to the Middle East, President Biden participated in the first leaders summit of a new grouping made up of Israel, India, the United Arab Emirates and the United States. Known as the I2U2, the countries’ foreign ministers formed the bloc in the fall of 2021 to deepen technological and private sector collaboration in the region and tackle transnational challenges in six focus areas: water, energy, transportation, space, health and food security. Beyond the announcement of a food security initiative and a hybrid renewable generation facility for India, little was revealed about what’s next for I2U2.

USIP’s Ambassador Hesham Youssef and Daniel Markey look at the vision animating I2U2, what each country aims to achieve and the potential areas of cooperation.

Is there any sort of normative or principled vision behind the I2U2?

Markey: Each of I2U2’s leaders stressed the group’s desire to mobilize private sector capital and technologies to solve practical, shared challenges. Trade and transit infrastructure, clean energy, waste treatment and critical and emerging technologies were all identified as priorities. Largely missing, however, was any overarching, principled vision of what unites these four states in partnership. The omission is noteworthy in part because the I2U2 often draws comparisons with the Indo-Pacific’s “Quad,” whose members — Japan, the United States, Australia and India — often stress the unifying force of their democratic practices.

Practical cooperation may prove sufficient to sustain I2U2. That said, an aspirational vision for the group’s core identity would not be all that difficult to find, given the striking religious diversity of its members. By highlighting their shared commitment to pluralism and cooperation across faiths, I2U2 could become a venue for cooperation on a variety of other initiatives. It could pair pragmatic, development-oriented problem-solving with peacebuilding across religious and communal divides. In addition, the shift would offer the Biden administration a means to broaden its vision of world order from one that is primarily defined by “democracy versus authoritarianism” to one that considers other important features of national identity and helps to build different sorts of bridges with strategic but undemocratic partners like the UAE. Third, an I2U2 that advances pluralism across its member states could also encourage the practice of related values — including protections for minority, religious and human rights — within them as well.

What do these countries aim to achieve with the I2U2?

Markey: India sees clear and tangible benefits from the I2U2, starting with the group’s first two announcements: a $2 billion investment and technological assistance for agricultural initiatives in two Indian states, Gujarat and Madhya Pradesh; and support for a hybrid renewable energy project in Gujarat. I2U2 thus offers a model and platform for sustained mobilization of capital from the UAE that is supported by Israeli and American technologies and championed by Washington.

In addition, given India’s close ties with both Israel and the UAE, New Delhi has much to like about the I2U2 as a diplomatic device to accelerate, deepen and guarantee the ongoing normalization of relations between Jerusalem and Abu Dhabi. Israel supplies critical military technologies to India, but prior generations of Indian leaders tended to downplay those defense ties, in part for domestic political reasons and in part to placate their Arab neighbors. Nowadays, Prime Minister Narendra Modi has the luxury of being unapologetic in his outreach to his Israeli counterparts. To be sure, the Abraham Accords and I2U2 don’t entirely solve India’s balancing act in West Asia, given New Delhi’s continued wish to retain good ties with Tehran, but they do help.

Finally, I2U2 offers India an opportunity to cooperate with the United States on its own terms: not as a junior associate or a formal ally, but as a self-confident and “strategically autonomous” partner. I2U2’s emphasis on voluntary economic initiatives rather than binding multilateral trade deals (like the Regional Comprehensive Economic Partnership) that India has repeatedly rejected is also attractive. In that narrow respect, I2U2 resembles Washington’s new Indo-Pacific Economic Framework, which India has also joined.

Youssef: The UAE is working to become one of the most globally connected players in the region. One of the pillars of this strategy is to pivot to Asia. But in contrast to the U.S. pivot to Asia aiming at confronting China, the UAE considers China one of its main partners in achieving this objective. I2U2 is also one of the ways the UAE is balancing its relations with its two main Asian partners: China and India.

The rapid advancement in UAE-India relations started around 2015. The UAE is India’s third-largest trading partner, and earlier this month they signed a free-trade agreement that is expected to increase their bilateral trade from $59 billion to over $100 billion in five years. The UAE also recently signed a free-trade agreement with Israel, and they are planning to increase annual bilateral trade to over $10 billion in the next five years. One year after establishing relations, trade reached $885 million, according to Israel’s economy minister. It remains to be seen whether this target would be exceeded because of I2U2 engagement and projects.

Since its establishment, the UAE has had strong relations with the United States. The I2U2 summit and a bilateral meeting on the margin of the summit with the Gulf Cooperation Council countries and Egypt, Jordan and Iraq helped to overcome some tensions with the Biden administration and table others.

The UAE and India are focused on pursuing economic cooperation through I2U2, and it seems that the United States and Israel are willing to go along with this approach. However, it is not clear whether any of them will introduce geopolitical objectives to I2U2 in the future. This would be problematic as the countries in the group have conflicting positions on how to deal with China, Russia and Iran that may affect the future of the group and its prospects of success. The UAE in particular will strive to avoid this risk. Israel's ambassador to India stressed that the group is "not against anyone,” adding that “it's for our people and for making the world a better place," an important message that was not echoed widely enough.

The Jerusalem Declaration signed during the Biden reflects the strength of Israeli relations with the United States. I2U2 is also a demonstration of the extent to which the United States is committed to advancing Israel’s integration in the region particularly since the Abraham Accords laid the ground for establishing this group and the Biden administration vowed to support this process.

Israel’s newly established relations with the UAE have been quite warm and are advancing at a rapid, perhaps even surprising, pace. Other than the East Mediterranean Gas Forum, and the more recent Negev Forum, I2U2 is the most visible platform that Israel shares with an Arab country.

Israel has significantly advanced its relations with India since the 1990s. Negotiations surrounding a free trade agreement have made substantial progress, amid a backdrop of intensifying Israel-India economic cooperation. First, Israel-India bilateral trade increased from $200 million in 1992 — when India formally established its embassy in Tel Aviv — to $6.35 billion in 2021. Second, the Haifa Port project that was initially awarded to China and which the Pentagon repeatedly warned Israel to cancel, was reportedly awarded to a joint Indian-Israeli bid that will operate the port until 2054. Third, Israel is India’s major defense supplier: India makes up 42% of Israeli arms exports at an estimated annual value of $1 billion. Between 2015-2019, Indian arms imports from Israel increased by 175%. I2U2 and the projects agreed in the summit are likely to substantially increase India-Israel bilateral trade.

What are the current and future areas of cooperation and potential risks for the group?

Youssef: Cooperation among I2U2 members represents key areas in the 21st century global economy. The group should avoid entering into geopolitical issues that could derail its principal objective. For example, a number of experts fear that the UAE’s current foreign labor force may be replaced with Indian workers. Another danger is that I2U2 falls victim to mission creep. Although the group should not spread itself too thin, I2U2 can expand by advancing cooperation in new areas in the future or by pursuing cooperation with other partners in both the Middle East and South Asia.

I2U2 has huge potential, and its composition provides ample opportunities for win-win cooperation. The United States has vast capabilities in every conceivable area; India has massive human resources and talents; Israel has advanced technology in a number of important fields; and the UAE is advancing innovative policies, attracting start-ups and willing to invest substantial resources. However, the burden of its sustainability will mainly lie with the UAE and Israel — the main beneficiaries — to maintain the interest of the United States and India and justify its continuation.