There’s been a good deal of talk lately about EU Strategic Autonomy, in trade, tech, data and, indeed, vaccines. If anything, Biden’s arrival raised new questions. What is all the fuss about?
Strategic Autonomy isn’t a new idea; the EU has been talking about it for seven or eight years. Initially, the focus was on security and defence: how could the EU become a better partner through developing defence capabilities? There are various definitions; perhaps the clearest is “the capacity [for the EU] to act autonomously when and where necessary and with partners wherever possible.” So, it’s not something von der Leyen’s Commission just came up with. But the international backdrop has changed, and that’s given the debate around Strategic Autonomy increased prominence.
A more assertive China has seen EU attitudes to engagement harden, while not buying into the clean break advocated by some around Trump. Four years of Trump have left scars that will take time to heal. The welcome for Biden still leaves questions around the longer-term predictability of the US. The UK has left the EU and is carving out its own role. Meanwhile, the EU’s relative weight, its share of global GDP for example, has declined. Something Jean Claude Juncker spoke about in 2017, underlining the importance of the EU building its resilience and being ready to step up to its responsibilities in a changing world. A world in which geopolitics is ever more intertwined with economics; with trade, tech, data seen, and used, as instruments of international influence and power.
Juncker highlighted two different challenges for the EU: on one hand, to use the still considerable heft of its internal market, of 450 million people, to seek to shape the world; and, on the other, to protect that market from “unfair” competition and build the EU’s resilience. To a large extent, this debate still underpins the renewed push around Strategic Autonomy: how far does the EU go for open engagement, seeking to shape and spread norms and standards; and how far should it prioritise protecting the internal market, reducing external exposure? To oversimplify, does the EU bet on confidence or defensiveness; the “Brussels effect” or protectionism?
Over recent weeks, two EU moves attracted a lot of attention and comment. The Commission set out an ambitious agenda for the European economic and financial system, aka “economic sovereignty”. And the EU concluded the Comprehensive Agreement on Investment with China. What do they tell us about the approach to Strategic Autonomy? In different ways, both show the EU taking a mixed approach, in some respects seeking to set the terms of the debate, while in other respects looking defensive.
The Commission argues for boosting the international role of the Euro, including through Euro debt and green bond issuance; and makes the case for a robust approach on sanctions, both resisting others’ (i.e. US) extraterritorial sanctions, and for the effectiveness of EU sanctions as a policy tool. At the same time, it talks of fostering the resilience of EU financial infrastructure, including through reducing “exposure” to non-EU clearance, and “over reliance” on non-EU investment banks. On China, the EU justified pressing ahead with the Investment agreement by pointing to its offensive interests and noting that the US hadn’t consulted before reaching its separate agreement with China. But, at the same time, the EU underlined the importance of other recent defensive initiatives, on scrutinising foreign subsidies and FDI screening.
Again, there’s a whole raft of EU proposals on tech policy and regulation under discussion – on regulation of content and “gatekeepers”, data governance and privacy – which seek in some areas effectively to set the agenda for new international norms, building on the model of the GDPR, and in others focus on protecting the internal market, restricting non-EU business’ participation in projects around innovative tech like blockchain, for example.
So, the jury is out on the direction and delivery of Strategic Autonomy. But the debate shows no sign of slackening. It’s unlikely there will be one single answer; more likely the answer will vary, issue by issue, and internationally, relationship by relationship. Understanding how the debate is moving will be key to a range of business decisions, from risk management to investment.
The UK government and business were, of course, traditionally active in arguing for the benefits of Europe remaining open to innovation, investment, services and products from elsewhere. The UK is no longer at the EU table, but there’s a clear continuing interest in engaging, and in encouraging other international voices, to make that case, pushing back against protectionist temptations. And recalling the second part of the original objective of Strategic Autonomy: for the EU to work with partners wherever possible.
Julian advises Flint’s clients on political, policy and regulatory issues in the UK and across Europe.
Julian was the UK’s EU Commissioner 2016-19, responsible for EU policy on security, cyber and important aspects of tech and data. He was previously UK Ambassador to Paris and Dublin, headed the Northern Ireland Office, and has 30 years of experience working on international and multilateral issues in the UK, the US and Brussels