Totally under the radar of a news cycle consumed by the Pulp Fiction in Istanbul saga and the ever-mutating US-China trade war, leaders from no less than 51 Asian and European nations met in Brussels on Friday to talk about developing some measure of global stability.
The day before in Brussels had been lost on yet another unresolved soap opera – Brexit, with no credible deal in sight.
The Asia-Europe Meeting (ASEM), established in 1996, lists 53 partners – 30 European nations, 21 Asian nations, the EU and the ASEAN Secretariat. Members, apart from the whole EU, include three BRICS nations (China, Russia, India), Japan, Australia and New Zealand – attesting to its importance.
Even though ASEM’s decisions are not binding, the 12th summit could not have happened at a more crucial juncture, according to diplomats, in terms of the pressing need for some sanity in international law and relations.
Even with the EU focused on Brexit, the fallout of migration and Italy’s open defiance of Brussels in raising its budget deficit; and Asia worried about inter-Korean dialogue, US bombers flying over the South China Sea ahead of an ASEAN summit, and the Rohingya crisis, they still managed to conduct meaningful discussions.
After all, Eurasia-wide trade already tops trans-Pacific trade, and the gap will continue to grow.
They discussed connectivity and trade and investment, but also sustainable development policies, climate change, terrorism, nuclear non-proliferation, cyber-security and, last but not least, the theme that galvanizes right-wing populism: migration.
Arguably the key consensus point of the Asia-Europe entente cordiale is the need to preserve the WTO – for all its faults still hailed as the only rules-based mechanism capable of arbitrating the proliferation of trade wars.
In parallel, the EU is advancing business as usual, signing a free-trade agreement with Singapore and another one with Vietnam and finalizing the terms of a trade deal with Japan.
So what’s the deal with BRI?
Then there’s the heart of the matter: how the EU as a whole plans to position itself towards the New Silk Roads, or Belt and Road Initiative (BRI).
Last month, the European Commission (EC) came up with its own Asia-Europe connectivity strategy ranging from transport and energy to digital economy developments.
The EU motto is “sustainable connectivity” – privileging “sound regulatory frameworks”, “fiscal responsibility”, and with everything operating under “open-market” rules.
For the moment, that’s still quite vague – and not substantially different from BRI’s goals. Diplomats in Brussels constantly refer to the EU’s External Investment Plan, focusing mostly on Africa and the “EU neighborhood”, and theoretically able to draw investments up to 44 billion euros.
This map shows a few examples – but that’s really a drop in the Atlantic compared to the reach, breadth and vast funding of BRI. Yet there’s no question that a few European nations would like the EU mechanism to rival China’s New Silk Roads.
EU divided, but talking about it
For the moment, the EU is – as usual – a divided house, pitting the pro-BRI Eastern Europeans and Italy, with a paralyzed France and Germany not exactly sure how to calibrate its strategy.
Arguably the top Brussels headache concerns Chinese investments in high-tech European businesses. Diplomatic corridors are abuzz with worries of technological transfers boosting the Made in China 2025 strategy. Berlin is now heavily regulating Chinese acquisitions in strategic sectors – but the EU as a whole still has not come up with a consensus strategy.
German industrialists know that for an export powerhouse the markets of the future are all in Asia – and especially China. Duisburg happens to be the key BRI terminal in Europe, as it hosts the Logport, one of the largest container ports in the continent. Twenty-five cargo trains arrive each week at Terminal DIT – the “China Terminal”, coming from Chongqing and crossing Kazakhstan, Russia, Belarus and Poland. In a not too distant future, this cargo will all move via high-speed rail.
The Mercator Institute for China Studies, a top think-tank in Berlin, has been releasing consistent reports on how Made in China 2025 is replicating the Germany: Industrie 4.0 technological leap, and how China will soon be building those ultra high-tech machines that for the moment shine worldwide as a symbol of German know-how.
Well, instead of becoming hostages in a sanctions crossfire, at least Asia and Europe are talking about it.