China's EU deal betrays insecurity; not a wedge between US & EU

In our first edition of The Red Pen for 2021, we take a look at an editorial by the FT's Gideon Rachman, who argues that the recent EU-China treaty will complicate President-elect Biden's ability to handle China and rebuild the US-EU relationship. Ian Bremmer and Eurasia Group's Michael Hirson point out the deal actually demonstrates how much Beijing fears being out-maneuvered by Biden.

There's a lot going on in the world, and obviously plenty to discuss right here in the United States where our democracy is getting tested like nobody's business. But that doesn't mean that good op-eds out there don't deserve to be sparred with. And, I don't want to just neglect all those perfectly important writers, so we have one this week.

Turning our attention abroad to how China factors in as President-elect Joe Biden takes office in a short period of time … and what role Europe will play in how the United States approaches the second biggest economy, soon to be first, on the planet.


The op-ed we're marking up is by Gideon Rachman. He's the chief foreign affairs commentator at the Financial Times. And the piece is entitled, "Europe Has Handed China A Strategic Victory." He argues against a recent investment treaty between Europe and China championed by European Commission President Ursula von der Leyen, also heavily supported by German Chancellor Angela Merkel. And it's viewed overall as a deepening of financial ties and commerce between Europe and China.

Now as a little bit of background, the deal, which was several years in the making, boosts market access in China for European firms in sectors such as autos and finance.

Now Gideon argues that the European Union has just handed China a big win despite all of that nation's diplomatic and humanitarian transgressions…and that this is going to further complicate things for incoming President Joe Biden as he tries to figure out how to deal with China.

Now, agree with Gideon, it's a significant development. And also, it's true that Europe does appear to be flexing its muscles a bit here: The US can do a unilateral trade deal with China (Phase One) and so can Europe. But is this going to change the geopolitical landscape? No, and the argument goes too far on that point.

First, Gideon writes, "Ms. Von der Leyen concluded 2020 by sending a truly awful geopolitical message — as her commission signed off on an investment treaty between the EU and China."

Well, the EU also has said it agrees with the United States "on the strategic challenge presented by China's growing international assertiveness." And there are many humanitarian and diplomatic issues Europe as a whole has strongly condemned—from China's attack on democracy in Hong Kong to its treatment of Muslim minorities. This is a fairly narrow deal, not a white flag on the relationship.

"But Ms. Von der Leyen concluded 2020 by sending a truly awful geopolitical message - "  Don't overdo it. This is a narrow deal, not a white flag.

Number two, Gideon describes the timing of the deal as "exquisite" for China, driving a wedge between Europe and the US on the eve of Biden's inauguration.

Now you can make that argument, but let's be clear, Beijing was clearly intent on rushing to get the deal done before Biden took office and ended up giving a lot of benefits to the Europeans accordingly. Does that sound like a confident superpower? Or, rather, like an insecure country worried about being out maneuvered by Biden and preparing to face a lot more coordinated and multilateral pressure? In other words, China might have grabbed what it could at a fire sale before Biden comes in to remove the wedge that has existed between Europe and the United States under the Trump administration.

"We've allowed China to drive a huge wedge between the US and Europe." China rushed to seal the deal before Biden took office.

Now on that, Gideon describes this deal as a "kick in the teeth" to Biden, who wants to restore ties to some of our strongest global allies in Europe.

Now, it's a wake-up call. But Beijing keeps digging its own diplomatic hole, from turning away WHO inspectors to conducting mass arrests in Hong Kong. And that's just this week. The new Biden team's commitment to transatlantic cooperation is going to go a long way to repairing the US-Europe relationship.

"It's also a considerable kick in the teeth for Joe Biden." Wake-up call? Yes. But Beijing keeps digging its own hole.

Finally, Gideon writes that Europe "is naive to believe that China will respect the agreement it has signed…And it is naive to think that the darkening political climate in Beijing will never affect life in Brussels or Berlin."

Now sure, you can point to plenty of examples of China not holding up its end of the bargain. Gideon mentions the WTO agreement in 2001. He's right. Also, in the terms of this EU/China deal, Beijing is expected to deliver on things like climate action, reducing favoritism to state-owned businesses, and improving labor practices. All kind of red lines for the Chinese state capitalist system. Good luck with that. But let's be clear, when China fails to meet those terms, that ends up working in America's favor and makes any EU/China agreement short-lived at best. It gets weaker as a consequence of that.

"It's naive to believe that China will respect the agreement it has signed." Maybe. But the deal's weaknesses mean it could be short-lived.

So, is it the end of the world order as we know it? No. But is China, and how its growing economic influence and power impacts every nation, going to be a big issue for Biden…and beyond? Yes. We just don't think Ursula von der Leyen or the EU did something "truly awful," as Gideon states.

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Ian Bremmer's Quick Take:

Hi, everybody. Ian Bremmer here from sunny Nantucket and going to be here for a little bit. Thought we would talk about the latest on COVID. Certainly, we had hoped we'd be talking less about it at this point, at least in terms of the developed world. A combination of the transmissibility of Delta variant and the extraordinary misinformation around vaccines and COVID treatment means that we are not in the position that many certainly had hoped we would be today.

The United States is the biggest problem on this front. We are awash in vaccines. Operation Warp Speed was an enormous success. The best vaccines in the world, the most effective mRNA, the United States doing everything it can to get secure doses for the entire country quick, more quickly than any other major economy in the world, and now we're having a hard time convincing people to take them. The politics around this are nasty and as divided as the country, absolutely not what you want to see in response to a health crisis.

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