Revamped EU-India link could re-balance China ties, Portuguese FM says

Portuguese Minister for Foreign Affairs Augusto Santos Silva in Brussels, Belgium, 26 January 2021. [EPA-EFE/OLIVIER HOSLET]

Improved relations between the EU and India, both seeking to end dependence on China, could serve as a vehicle to rebalance the bloc’s arduous ties with Beijing, Portugal’s Foreign Minister Augusto Santos Silva told EURACTIV in an exclusive interview.

Asked whether he hopes for a closer EU relationship with India to counterweight the bloc’s relations with China, Santos Silva said he would rather speak of a “rebalance” of ties.

“This is our aim, we don’t hide it, and it is why we proposed a high-level meeting with India following the high-level meeting with China,” Santos Silva said, which will be the central point of the Portuguese EU presidency.

“If you talk with China, and you have to talk with China as the second economy of the world and the world’s most populated country, you have also to talk with India,” Santos Silva said.

“And it will be absurd that the two largest democracies of the world, India and the European Union do not have regular political, regular political dialogue,” he added.

According to the Portuguese foreign minister, the EU should not only be interested in a trade but have a multi-dimensional approach also including a political dimension and bilateral cooperation on technology and climate action.

Although the EU and India have often expressed an interest in closer trade relations, they have been discussing a free trade agreement (FTA) since 2007, with no visible progress, while hopes have been expressed for an EU-India summit this year.

Back in 2013, trade talks between the EU and India stalled over India’s agricultural protectionism and pharmaceuticals. And while the EU is already India’s largest trading partner, accounting for 11% of total Indian trade, India remains only the EU’s tenth largest trading partner.

Asked how realistic he thinks a potential EU-India trade deal this year would be, Santos Silva said that “the expectation is that we can de-block the current impasse, at least on investment issues”.

“We don’t want to conclude negotiations, but we want to relaunch negotiations in a better atmosphere,” he added.

China and the Indo-Pacific

In December, the EU and China agreed ‘in principle’ on the controversial Comprehensive Agreement on Investment (CAI), their first bilateral investment treaty, after seven years of negotiations, that is meant give European companies greater access to Chinese markets and help redress what Europe sees as unbalanced economic ties.

Asked whether the deal was struck prematurely, Santos Silva said that “a step forward was done, we achieved an agreement in principle, we now have to look carefully to the text and proceed with our work with European Parliament”.

The European Parliament has voiced its objections to the deal amid China’s continuing crackdowns in Xinjiang against Uighur minorities and Hong Kong.

According to him, the “wisest understanding” of a common Western position towards China was the one currently assumed by NATO.

NATO leaders had signed in 2019 a common declaration agreeing to focus more on the challenge of China’s “growing international influence” and military might.

“They stated that the emergence of China constitutes a new reality that we have to understand better – and of course, we, the Europeans, together with the Americans, we have to understand this matter better,” Santos Silva said.

“Meanwhile, we shall reach a common understanding of what is going on in Asia and in the Indo-Pacific region, together with our American friends,” Santos Silva said.

In December, after six years of talks, the EU and the ASEAN group of ten Southeast Asian countries had upgraded their relations from “dialogue” to “strategic partnership”, shortly after  15 countries in the Indo-Pacific region signed a common economic and trade agreement, representing one-third of the world population and about one-third of the world’s GDP.

“The question is, can the US, can the Europeans, can India ignore this fact? I don’t think we can,” Santos Silva said.

US-ties and ‘strategic autonomy’

Biden’s inauguration has been greeted with enthusiasm in Europe, but his election has not fully assuaged doubts about US democracy and global leadership.

Santos Silva said he “expects a change in both method and language and also in content”, largely due to the promise of Biden to come back to the multilateral agenda of the United Nations framework, rejoining the Paris Agreement, and “considering the possibilities of facing together with Europe some of the global challenges”.

However, asked whether he believes the EU will assert its newly found ‘strategic autonomy’, developed in response to Trump, now that Biden is in office, he said strategic autonomy “does not mean to put into question solid traditional alliances like the transatlantic one”.

“It is very important to use the concepts of strategic autonomy, but we cannot have any kind of ambiguity,” Santos Silva stressed, adding that concerning the contradictions and the conflicts between the US and Russia or between the US and China “we are not neutral and belong, like the US, to the Western world”.

“We were considered by Mr Trump as enemies or at least as adversaries. But we are allies and very close friends. And of course, Mr Biden, and his administration will put again in the right tone the conversations between Europeans and Americans,” he added.

“Speaking of strategic autonomy, in regards to the economy, means realising Europe, and the needs that Europe becomes less dependent on other countries with very different normative and institutional context – and I’m referring to China here,” he said.

At the same time, the Biden administration had recently signed an executive order aimed at promoting the “Buy American” agenda he campaigned on last year, which seeks to bolster US manufacturing through the federal procurement process.

Asked whether this could have a negative impact on future EU-US trade ties, Santos Silva said that the EU “cannot ignore the issues we have with Americans in trade, in investment agreements and in taxation”, but would now “have an interlocutor that can approach these difficulties in a friendly way”.

[Edited by Zoran Radosavljevic]

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