Do you think the EU is not acting on China? To look closer. – The diplomat



The European Union (EU) tends to get a bad rap in political commentary in English (and not just there). In an increasingly conflict-prone international system that is disrupted by the resurgence of China and the United States defending their global primacy, the EU appears uncomfortable and receives criticism on issues ranging from inefficiency at disunity at poor strategic judgment. It would appear that the EU is woefully under-equipped for the return of history.

Criticisms of this type are sometimes justified, but at other times they miss part of what is happening on the ground and indicate a misunderstanding of what the EU is and how it works. First of all, it is important to remember what the EU is do not: It is not a federal state, but an international organization of sovereign states. It was created first and foremost to ensure peace among its members, and secondly to increase prosperity by liberalizing trade. For these purposes he has succeeded admirably. The exercise of geopolitical power was only part of his job description. very recently, and it takes time to adjust to such a role.

Beyond that, the EU can be more effective than one might think because the effects of its activities often escape the headlines or are attributed to the national governments of its member states. The filtering of investments is a good example. Until 2019, the EU did not have a regional mechanism for reviewing incoming FDI proposals. Some Member States had national mechanisms with different screening criteria and procedures, while others, such as Belgium or Greece, did not have procedures in place. A wave of inbound Chinese investment between 2013 and 2016 sparked a debate on the risks of foreign investments, especially those of an authoritarian state. Chinese acquisitions of high-tech companies and critical infrastructure have raised concerns in some political influence and threats to long-term competitiveness. Germany, France and Italy said the EU as a whole should do more to coordinate investment screening and called on the European Commission to design a regulation on investment screening through a open letter in 2017.

the resulting regulation entered into force in April 2019 and became fully operational on 11 October 2020 after a grace period allowing Member States to meet their reporting obligations. The most notable feature is that it leaves the decision to accept or reject a particular investment proposal in an EU country entirely to its national government. The EU can only give an opinion on whether or not to accept a proposal in certain cases. The only obligation imposed by the mechanism is to share information: governments are invited to inform the Commission of the screening regulations they have in force and to inform other member states if they decide to screen an investment proposal. Stronger regulation was not politically feasible at the time, as member states simply did not want to relinquish national control over investments and the EU, not being a federal state, could not impose such a decision. .

Considering the lightness of the regulations, it is quite easy to conclude, because Ted Bromund of the Heritage Foundation made, that the framework is “unlikely to be effective in its current form”. But the story does not end there. While the EU cannot do much in terms of filtering yet, its Member States can and increasingly do. Since 2017, new investment screening mechanisms have been introduced or are being designed in Czechia, Hungary, the Netherlands, Romania, Slovakia and Malta (see the UNCTAD website for an overview). Meanwhile, Germany has reinforced its existing regulations on the screening of foreign investments. As the EU intends to remain open to foreign investment, it is becoming more selective, a trend the EU’s Chinese Chamber of Commerce has noted with concern. a 2020 report.

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The increasing filtering of investments by national governments in Europe is not prima facie linked to the EU. After all, EU investment screening regulations do not force any member state to adopt its own regulations. But ongoing discussions at all levels between EU member states are sensitizing governments to issues they would not have paid much attention to otherwise. This example illustrates the essence of the EU’s role in foreign affairs: coordinating and sharing information, and facilitating policy convergence on issues of common interest.

When that fails, for example when a small member state opposes a shared position, it generates negative press. The model often works, but its successes are not always easy to pinpoint. Important decisions are in many cases taken by national governments and can follow months or even years after an EU policy enters into force. Of course, the EU does not act as quickly and decisively as a national government can, but it does not stand still either.

In addition, the current EU investment screening regime may well be tightened up in the future when it comes up against its own limits, such as Princeton academics Sophie Meunier and Zenobia Chan report. Under the current EU mechanism, a Member State may, under certain circumstances, issue an opinion to another Member State if it considers that its national security (in the broad sense, including economic security) is threatened by an investment proposal in the other Member State. However, this opinion does not need to be followed by the second Member State. A hypothetical example: let’s say a dubious investor from outside the EU aims to acquire the sole producer of a key component for the German, French and Italian automotive industries, located in Slovakia. These three governments can express the opinion that Slovakia should block the acquisition. Slovakia could choose to ignore this opinion and still allow the acquisition. If a sufficiently large national interest is at stake, this would undoubtedly lead to conflict and possibly pressure for a more integrated mechanism that leaves less room for national governments to do what they want. Meunier calls this dynamic “Fail forward. The EU has often worked like this: a half measure today leads to a (more) comprehensive measure in the future. It may seem far from ideal, but then for 27 countries coordinating policies on important issues is not a trivial challenge and it is not clear that there is a better model available.

The Indo-Pacific strategy of the largest member of the EU Germany, as well as the Chinese policy documents of the small members Sweden and the Netherlands all stress the importance of working across the EU to achieve national goals for developments in Asia. This is quite a change from the days of previous competition, the Cold War, when the EU’s predecessor, the EEC, was barely active in foreign policy and the countries of Western Europe considered l NATO led by the United States as the main vehicle of protection against the Soviet regime. Union. In the new geopolitical era, the EU is called to occupy a central place in the foreign policies of its member states. The adaptation of the organization to the role will depend mainly on the choices made by its member states. However, there are good reasons to be optimistic about the EU’s ability to adapt to the challenges ahead, and it would be a mistake to view it as irrelevant.



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