The European Union (EU) is seeking closer ties with Australia to build its $470 billion Global Gateway investment programme as an alternative to China’s Belt and Road Initiative (BRI), much like the United States’ (US) Build Back Better World (B3W) initiative.
The EU’s initiative was unveiled last month as an investment programme “to establish links, not dependencies.” The bloc calls the programme an upgraded version of BRI that focuses on investments in clean energy, digital sectors, education, health, and research. It is designed to attain two crucial objectives: boost the security of supply chains and rival China’s influence and finance in developing countries.
⬇️ To deepen trade links
— EU International Partnerships 🇪🇺 (@EU_Partnerships) December 31, 2021
⬇️ To strengthen global supply chains
⬇️ To invest together in green and digital technologies
⬇️ To keep our people safe
The #GlobalGateway is our new strategy to connect the world in a way that works for people and the planet. #2021InReview pic.twitter.com/vegLcp02fR
In an exclusive interview with The Age and The Sydney Morning Herald, EU foreign policy chief Josep Borrell and the European Commission’s commissioner in charge of international partnerships, Jutta Urpilainen, reaffirmed the strength of the bloc’s relationship with Canberra. The diplomats added that the Initiative would attract countries with the promise of no debt traps, saying that the focus will be on sustainable projects and serving the needs of local populations.
Amid shrinking supply lines due to escalating tensions between the United States and China, Borrell and Urpilainen pointed out that energy supplies, data flow, rare earths, vaccines, and semiconductors are power tools in the contemporary world. “Which is why we need to ensure that global connectivity and access to these flows is based on rules and international standards. While flows in goods may be ideologically neutral, the rules which govern them are intertwined with political values,” the diplomats argued. They added: “Europe wants to reduce excessive dependencies and be more autonomous in areas like the production of computer chips. Our autonomy is reinforced if all our partners have alternatives when making their investment decisions.”
Furthermore, Borrell and Urpilainen said the Union has already discussed several flagship events for Global Gateway, including the extension of BELLA submarine cable connecting Europe and Latin America and aid worth $1.5 billion to North Africa for renewable energy projects.
Meanwhile, Australian Minister for Trade, Tourism, and Investment Dan Tehan said his country could be a capable and reliable provider of critical minerals to the EU, including rare earth and battery minerals. He added that Australia and the EU share common values and an unwavering commitment to a global rules-based order. “The EU’s Global Gateway initiative is welcome and will help identify projects that we could partner together on in the Indo Pacific,” he asserted.
Despite ambitious projects and support from the Indo-Pacific countries, there are factors that could work against the bloc. For instance, China doesn’t see the Union as a single entity but a series of relationships that can be broken. Furthermore, the Union is physically distant from the Indo-Pacific; moreover, most nations in the region don’t have a strong relationship with the EU, despite the bloc accounting for 14% of global trade.
To this end, Tehan said he’s looking forward to resuming negotiations in February. Negotiations were suspended after Australia abandoned a multi-billion submarine deal with France for the AUKUS military partnership with the US and the United Kingdom to counter China’s growing influence in the Indo-Pacific.